Malal Bhat vs State Bank Of India
1992 Latest Caselaw 332 Del

JUDGMENT

Balakrishna Eradi, J.

(1) The challenge in this Revision Petition is directed against the order dated September 30, 1991 passed by the Stale Commission, Bangalore allowing in part Appeal No. 70 of 1991 tiled before it by the respondent herein (State Bank of India) and reducing the compensation allowed to the revision petitioner by the District Forum from Rs. 35,000.00 to Rs. 25,000.00 The revision petitioner is the complainant in Complaint No.CPA/159/90-91 on the file of the District Forum. Mysore, She had approached the District Forum with the grievance that on account of the negligence and deficiency in the service rendered to her by the Branch of the State Bank of India at Kuvempunagar (Mysore) in issuing an unsigned demand draft, irreparable loss, hardship, mental agony and anguish had been caused to her and she sought to recover a compensation of Rs. 90,000.00 from the Opposite Party.

(2) At the relevant point of time the complainant was a student preparing for the A.M.I.E. Diploma and .she had registered her name with the Institution of Engineers (India), Calcutta, for appearing for the preliminary Section 'A' examination leading to the award of the A.M.I.E. Diploma. The last date for the submission of applications for the said examination scheduled to be held on June 8, 1990 was April 15, 1990. As per the requirements of the Institution of Engineers (India) every application for appearing for the examination had to be accompanied by a Bank draft for Rs. 200.00 Accordingly the complainant made an application to the respondent bank at its Branch in Kuvempunagar, Mysore on March 22,1990 for the Issuance of a demand draft for Rs. 200.00 and remitted Rs. 202.00 into the bank inclusive of the charges for issuing the demand draft. A draft bearing No. 601409 was issued to her by the said Branch of the respondent Bank on the same dale and a copy of the same was produced as Annexure-I before the District Forum. The complainant forwarded the said draft along with her application for appearance in the examination to the Director.

(3) Institution of Engineers (India), Calcutta, but the latter returned the Bank draft to the complainant along with a letter dated April 23, 1990 staling that her application for appearing in the examination was not acceptable because the Bank draft was not signed by the Manager of the Bank. Thereafter, the complainant got the draft signed by the Bank Manager and sent it by Speed Post to the Director of the Institution of Engineers (India) on may 2, 1990 hoping that she would be permitted to take the examination scheduled to be held on June 8,1990. But the said request was turned down by the Director of the Institution of Engineers (India) on the ground that the last date for receipt of the application had long ago expired. According to the complainant, since the next examination was to be held only after a further period of six months, the rejection of her application which was solely due to the fault of the bank in negligently issuing an unsigned demand draft had resulted in loss of her career by six months, waste of her hard work. great mental agony and anguish.

(4) The Opposite Party namely, the State Bank of India put forward the defense that the complainant on being handed over the Demand Draft by its Branch had a duty to verify whether the draft had been duly signed and inasmuch as she forwarded the draft to Calcutta without such verification, she was guilty of negligence and the Bank alone could not be blamed for what had happened. In support of this contention the Bank sought to invoke the principle of 'Caveat Emptor'. Another objection taken by the Bank was that since the Institution of Engineers (India) had returned the demand draft without presenting it for payment to the State Bank's Branch at Calcutta, the remedy, if any, open to the complainant was only against the said Institution.

(5) The District. Forum elaborately went into the evidence and came to the conclusion that negligence and deficiency had been clearly established against the Opposite Party in having issued a demand draft to the complainant without its having been signed by the Branch Manager of the Bank. It rightly rejected the plea based on principle of 'Caveat Emplor' and held that the said principle had no application at all in the present case. It was further held that since the negotiable Instrument issued to the complainant was patently defective, the Institution of Engineers (India) could not he found fault with for not presenting such an instrument to the Branch of the Bank at Calcutta on whom it was drawn. It also held that the Institution of Engineers (India) acted properly in returning the said draft to the complainant on its being noticed that the demand draft did not bear the signature of the Manager of the issuing Branch of the Bank.

(6) On the question of compensation, the District Forum found that there was substance in the plea of the complainant that had she appeared for the examination in the month of June, 1990 and had passed it, she could have secured employment within a reasonable time thereafter and that she had suffered loss due to the postponement of such prospect of employment cumulatively since the next examination was to be conducted by the Institution of Engineers (India) only in the month of December, 1990. The District Forum felt that it would be reasonable to estimate the loss suffered by the complainant on this account at Rs. 15,000.00 . Further amounts of Rs. 200.00 and Rs. 12,000.00 were awarded to her by the District Forum for the extra expenditure that she had incurred on undergoing some other courses consequent on her inability to appear for A.M.I.E. in the month of June, 1990 and for the mental agony and suffering that she had to undergo. Another amount of Rs. 6000.00 was also awarded to the complainant by the District Forum as compensation for the loss of six academic months. In the result, the District Forum had awarded a total compensation of Rs. 35,000.00 to the complainant besides a sum of Rs. 500.00 by way of costs.

(7) On the matter being taken up in appeal before the State Commission by the State Bank of India, the State Commission substantially confirmed the findings of the District Forum on the question of deficiency and negligence on the part of the Bank. However, it reduced the compensation payable to the complainant from Rs. 35,000.00 that was awarded by the District Forum to Rs. 25,000.00

(8) After hearing arguments advanced by Sri H.D.Shourie who presented the case on behalf of the revision Petitioner and by Shri A.V. Rangam, learned counsel appearing on behalf of the State Bank of India (respondent), we are of opinion that the State Commission had acted rather arbitrarily in interfering with the quantum of compensation fixed by the District Forum without giving any valid or convincing reasons. It is certainly competent for an appellate authority to re-determine what would be the proper quantum of compensation to be awarded in a particular case but such exercise has to be undertaken on a careful appraisal of the evidence on record and all the relevant facts and circumstances having a bearing on the quantification of the loss etc. As has been repeatedly pointed out by the Supreme Court, any arbitrary exercise of power by a judicial or quasi-judicial authority would be an improper exercise of jurisdiction vested in such authority by law. In our opinion the interference by the appellate authority in the present case with the quantification of compensation made by the District Forum without proper application of mind to the relevant aspects was not warranted by law and connote be regarded as a proper or regular exercise of its jurisdiction.

(9) Hence we allow this Revision Petition, set aside the order of the Stale Commission and restore the order passed by the District Forum. The revision petitioner shall be entitled to recover Rs. 1,000.00 by way of costs from the respondent.