District Consumer Forum, Bokaro.
Consumer Case No. 98 of 2008
M/s Hans Regency, A unit of Limcas Hotel Industries Pvt. Ltd. Sector-1, Bokaro Steel City-827001.
Versus
The Branch Manager, HDFC Bank Ltd. City Centre, Sector-IV, Bokaro Steel City-827001.
Before-
S.M.Alam, President
Vijay Bahadur Singh, Member
Shabnam Praveen, Member
Date of Judgment-: 13 April, 2009
Date of case filing-: 12 December, 2008
-: Judgment:-
The complainant has filed this Consumer case against the opposite party to allow operation of the Current Account No.02672560000877 as per operation mandate vide annexure P1 and consequently honour all cheques, Drafts transfer of amount as per Banking norms till there is balance in the said account, to pay damage and compensation for an amount of Rs. 50000/-, to pay litigation cost of Rs. 10000/- and pass such other order or Orders as your Honour may deem fit and proper.
2 The case of the complainant in brief is that it is renowned Hotel at Bokaro Steel City and is having a current account no. 02672560000877 with the opposite party Bank. The operation of the said current account is done as per the Board resolution of the complainant dated 07.10.2005, a copy of which is enclosed marked as annexure P1. The operation was continuing smoothly till January/February, 2008. But all of sudden, on and from 25.04.2008 the opposite party stopped operation in the said account in spite of clear credit balance on flimsy ground and contrary to operation mandate. As per operation mandate at annexure P1 any of the directors can operate the account singly. Sri Hira Lal Gupta, the Managing Director was operating the account so far. Even the opposite party Bank allowed the five withdrawals detailed at annexure P2 on single signature of other director to which the Managing Director sent a notice of protest on 18.03.2008. The complainant through its Managing Director Shri Hira Lala Gupta sent a letter dated 09.05.2008 along with a cheque No. 171675 dated 09.05.2008 for Rs. 853328/- for payment towards disbursement of employees salary of the complainant. Copy of the said letter and the cheque is enclosed marked as annexure P3. The said cheque was not honored in spite of clear credit balance in the account. This tantamount to deficiency of service. The opposite party Bank sent a letter dated 02.04.2008 advising that it had marked the account on Stop payment category, copy of the letter enclosed marked as annexure P4. This omission and commission of the opposite party is contrary to the operation mandate. Such decision of the stop payment by the opposite party is illegal and arbitrary and tantamount to deficiency of service. No director has the mandate to issue instructions of the stop payment or stop operation in the account.
3 The further case of the complainant is that then Hon’ble Chief Minister sent a letter on 19.05.2008 to the opposite party Bank requesting for release of payment of the cheque issued by the complainant as the same involved payment of salary of the complainant’s employees. A copy of the letter is enclosed marked as annexure P5. The Deputy Commissioner, Bokaro sent similar letter dated 07.07.2008 to the opposite party, copy of which is enclosed marked as annexure P6. The opposite party did not attach any importance to those two letters. Rather on 30.06.2008 it sent a letter informing the three directors of the complainant that the operation in the account cannot be allowed for reason stated therein, copy of letter is enclosed marked as annexure P7. This letter conveying the decision is illegal and arbitrary tantamounting to deficiency in service. Surprisingly the opposite party Bank allowed payment of Income Tax on the basis of letter dated 04.10.2008 of the complainant and informed the same to the complainant vide its letter 07.10.2008, copies of which are enclosed marked as annexure P8 and P9. Thus the opposite party bank has taken self contradictory stand and blows hot and cold at its illegal discretion which tantamount to gross deficiency of service. Finding no other alternative, the complainant decided to take legal remedial step by filing this complaint under Consumer Protection Act.1986 after serving legal demand notice dated 21.10.2008 on the opposite party. A copy of notice is enclosed marked as annexure P10 which was received by the opposite party as reflected from its reply dated 25.10.2008, a copy of which is enclosed marked as annexure P11. On account of its gross deficiency of service the opposite party Bank is liable to redress the grievance of the complainant and is also liable to pay damage, compensation and cost of litigation, for which the complainant has prayed this Forum to pass appropriate order in respect of its reliefs sought in the complaint petition.
4 Upon issuance of notice the opposite party appeared and filed its written statement, in which it has been submitted that the operation mandate of the current account No. 02672560000877 vide resolution dated 07.10.2005 was superseded by the letter dated 25.04.2008 issued by two Directors namely S.P.Gupta and M.P. Bansal. The letter categorically stated, “Please also mark no debit in the said account till further notice from our side with the Board resolution and signatures of all three directors”. The copy of the letter mentioned above has been filed as annexure 1. The wording of the letter at annexure 1is categorical on the point that the resolution dated 07.10.2005 of the Board of Directors had been terminated in view of the letter dated 25.04.2008. This petitioner on the instructions of the letter dated 25.04.2008 had got no other option but to adhere to the same according to the Banking norms and also the Company Law. Adherence on its parts is legal and on such basis the stoppage of payment of cheque no. 171675 dated 09.05.2008 issued by the Complainant is legal and within ambit of law. Hence no deficiency in service done on the part of this petitioner.
5 The further case of the opposite party is that the withdrawal which has been allowed as per annexure P2 of the complainant was before the letter dated 25.04.2008, and the same was duly issued by the one of the Director hence the petition intention is legal and unquestionable. The letter issued by Deputy Commissioner and Sri Sibu Soren was not in accordance with the provisions of law hence the petitioner stand off not allowing the transaction of the account No. 02672560000877 is legal and does not amount to deficient in service. Besides, letter dated 30.06.2008 at annexure P7 has been distorted and the true facts has been suppressed. The letter had been issued in the back drop of letter dated 21.06.2008 of the complainant. The letter dated 21.06.2008 and Panchnama regarding settlement of dispute between the Directors have been annexed as 2 and 3 respectively. The fact of existence of dispute between them has been suppressed by the complainant. The withdrawal allowed by this petitioner as alleged in the Para 8 of the complaint petition was on account of Income Tax which is a statutory authority and had demanded the same only on the instruction of the complainant vide their letter no. DCIT/C-3/B.S.City/ 08-09/2395 dated 06.10.2008. Thus there is no deficiency in service on the part of this petitioner and the action of this petition is nothing but legal and accordance with provision of law and circulars of the RBI. In view of the above the complaint is vague and sketchy and there is no cause of action to initiate the instant proceeding and the complaint is liable to dismissed with cost against the complainant for filing such vexatious complaint. It has therefore, been prayed to dismiss the complaint with cost in favour of this petitioner.
6 Both the parties have been heard and the entire case records and documents filed on behalf of the parties have been perused. It is observed that the complainant’s current account no. 02672560000877 with the opposite party Bank was to be operated as per its Board resolution dated 07.10.2005 signed by all three directors. It is found that the operation of the said current account was being done as per the Board resolution till 25.04.2008 when there was stoppage of payment to the complainant by the opposite party Bank as per the instructions contained in the letter dated 25.04.2008 signed by two directors namely H.P. Gupta and M.P. Bansal. It transpires that the complainant’s cheque no. 171675 dated 09.05.2008 for Rs. 853722/- signed by the third director Hira Lal Gupta was not honoured for payment by the opposite party Bank. So far, Hira Lal Gupta was signing and presenting all the complaint’s cheques for payment to the opposite party Bank. The withdrawal against the above mentioned cheque dated 09.05.2008 was meant for disbursement of complainant employees salary, which is statutory under payment of wages Act.
7 It will not be out of place to emphasize here that the complainant’s Board resolution dated 07.10.2005 was signed by all its three directors whereas the letter dated 25.04.2008 was signed only two directors. The Board resolution dated 07.10.2005 contained the following-
“That any of the following directors/officials are hereby authorized to sign the documents singly for the purpose of opening the account and also for the purpose of operating the said account”.
The directors- Hira lal Gupta, Surinder Pal Gupta and Mahender Pal Bansal have signed the above Board resolution.
The letter dated 25.04.2008 issued to the Branch Manager, HDFC Bank, City Centre, Bokaro Steel City containing instructions for stoppage of payment in respect of current account no.02672560000877 of the complainant was singed by only two directors namely S.P. Gupta and M.P. Bansal.
8 It is Crystal clear that when the operation of the complainant’s current account No. 02672560000877 was to be operated as per the complainant’s Board resolution dated 07.10.2005 signed by all its three directors, the stoppage of the operation of the said account was effected by the opposite party Bank on the basis of letter dated 25.04.2008 signed and issued to it only by two directors. The Board resolution dated 07.10.2005 signed by all the three directors cannot be superseded by the letter dated 25.04.2008 signed and issued by only two directors, in anticipation of a future Board resolution. A Board resolution can be superseded only by a subsequent Board resolution, which is not the situation in this case.
9 In view of the above we have come to the conclusion that stoppage of operation of the complainant’s current account No. 02672560000877 by the opposite party Bank while refusing payment against its cheque no. 171675 dated 09.05.2008 for Rs. 853722/- signed and presented by Hira lal Gupta for disbursement of complainant’s employees salary on the basis of letter dated 25.04.2008 issued by only two directors is in contravention of the operation mandate contained in the Board resolution dated 07.10.2005 singed by all the thee directors and is an anuthorized act. We, therefore, hold that the above mentioned action of the opposite party Bank for payment stoppage to the complainant has been certainly an act of negligency and deficiency in service on its part towards the complainant. The opposite party Bank is as such held liable to pay reliefs to the complainant.
10. Under the facts and circumstances of the case, the opposite party Bank is directed to allow with immediate effect the operation of the complainant’s current account No. 02672560000877 as per operation mandate contained in its Board resolution dated 07.10.2005 and honour all cheques, Draft, transfer of amount as per Banking norms till there is balance in the said account. The opposite party Bank is further directed to pay Rs. 10000/-(Rupees ten thousand) only as compensation to the complainant within 30 days from the date of this order. The opposite party Bank is also directed to pay Rs. 5000/-(Rupees five thousand) only as cost of litigation to the complainant within 30 days from the date of this order.
Member (lady) Member President
Tags: Branch Manager, HDFC Bank