E.P. SARASWATHI vs Branch Manager, Indian Overseas Bank

THE complainant appeals.

THE facts of the case are as follows : -THE complainant has deposited an amount of Rs. 50,000/- in the bank represented by the first and second opposite parties; that deposit was renewed twice by the third opposite party who is admittedly a relative of the first opposite party. After such renewals the third opposite party has taken a loan from the bank of Rs. 85,000/- on the basis of the deposits. THE complainant says that the third opposite party has acted without her instruction and fraudulently and therefore, approached the District Forum with the following prayers : - "to direct the respondents 1 to 3 to return the accrued fixed deposit amount in the name of the complainant in R.D.P. 87/94 a sum of Rs. 47,072/- with accrued interest as on data and in R.D.P. 88/94 a sum of Rs. 67,255 / - with accrued interest as on date to the complainant and award the costs of this complaint."

The District Forum found that there is no deficiency is service on the part of the bank in allowing the third opposite party who was in possession of the power of attorney and accordingly dismissed the complaint by order dated 17.1.1997.

Aggrieved by that order the complainant has preferred this appeal.

THE learned Counsel for the complainant would contend that the power of attorney was a forged one, that if the bank had taken care to verify the signature found in the power of attorney they would have found that it was a forged one and that therefore, the bank acted negligently in this matter. This contention cannot be accepted for two reasons. Firstly once a registered power of attorney deed is produced before the bank the bank does not have to make any further verification. It has to act upon the power of attorney deed unless there is a prima facie defect. If fraud is seriously suspected it may even have to alert the police. Otherwise the bank is not expected to sit on judgment over a deed which was properly registered. For the reason that in this case the bank has stated that they have verified me signature which it was not expected, to do, the bank cannot be held responsible of negligence, if ultimately there was some detect in the document. Failure in an act which does not form part of the service, by no stretch of imagination, be considered as a deficiency in service. Secondly, it is to be seen that in this case the deposits were renewed twice by the third opposite party. The complainant has not explained why she remained inactive and whether the renewal was also made without and against her will. Anyway since the third opposite party presented herself before the bank on those occasions on behalf of the complainant, when she applied for loan with a power of attorney deed which was prima facie good, the bank has committed no deficiency in service in allowing the loan.

THE learned Counsel for the appellant would contend that the power of attorney deed is in English, that the complainant doesnot know English, that the signatures are in fact in Tamil and that the complainant never purported to execute a power of attorney deed. As the case is not against the Registration Officer, we cannot go into the merits of this contention in this case. It is however to be observed that the Registration Officer has a statutory duty under Section 34 of the Act, to satisfy himself not only about the identity of the person executing the document but also about the knowledge of the nature and essential content of the document by the executant. This duty becomes all the more important when the document is in a language unknown to the executant. If the lapse is with intent to injure, the officer is criminally liable; if mere is no such intent but only negligence, he becomes civilly liable for damages. It is hoped that this case will be an eye-opener to the Registration Officer. With this observation the appeal is dismissed. No cost. Appeal dismissed.