1993 (8) TMI 238 - Commission - Companies Law

Summary

Issues: Jurisdiction of the District Consumer Disputes Redressal Forum, Responsibility of Bank of Baroda regarding the draft, Proper handling of application and draft instructions, Return of draft to the complainant, Applicability of Consumer Protection Act, 1986.

Jurisdiction of the District Consumer Disputes Redressal Forum:
The judgment revolves around the jurisdiction of the District Consumer Disputes Redressal Forum in Junagarh to hear a complaint regarding a financial dispute. The appellant, Bank of Baroda, challenged the jurisdiction, arguing that the cause of action arose in Rajkot, not Junagarh. The court agreed with the appellant, stating that as the branch office of the appellant was in Rajkot and the cause of action occurred there, the complaint should have been filed in the jurisdiction of the Rajkot Forum as per the Consumer Protection Act, 1986.

Responsibility of Bank of Baroda regarding the draft:
The respondents had applied for equity shares and submitted a draft in favor of Canara Bank to Bank of Baroda. The issue arose when Bank of Baroda did not forward the application to the intended recipient, Tata Elxsi (India) Ltd. The court held that Bank of Baroda was not at fault as the draft was not in their favor, and they could not collect the amount. The court emphasized that the mistake was on the part of the complainants for not following the specific instructions on the application form. Therefore, Bank of Baroda was not liable for any compensation or interest for the delayed return of the draft.

Proper handling of application and draft instructions:
The court highlighted that the application form clearly instructed that the draft should be made payable to Canara Bank, the collecting bank for the public issue. Since the draft was not in favor of Bank of Baroda, they could not collect the amount. The court ruled that the complainants' failure to adhere to the instructions led to the rejection of their application, and Bank of Baroda was not obligated to forward the draft to Canara Bank.

Return of draft to the complainant:
Bank of Baroda attempted to return the draft to the complainant through a courier service, but it was unsuccessful. Despite doubts raised by the District Forum about the delivery, the court found that the appellant should not be held responsible for the failed delivery as the courier service could not locate the intended recipient, who was serving at the District Court in Junagarh.

Applicability of Consumer Protection Act, 1986:
The judgment underscores the importance of complying with the provisions of the Consumer Protection Act, 1986, regarding jurisdiction and the obligations of financial institutions in handling customer transactions. It clarifies that complaints should be filed in the appropriate forum based on the location of the cause of action and that banks are not liable for customer errors in following transaction instructions.

In conclusion, the judgment allowed the appeal, set aside the order of the District Consumer Disputes Redressal Forum in Junagarh, and directed each party to bear their own costs.