MOHD.IBRAHIM vs CANARA BANK THROUGH ITS CMD

THE complainant has approached the Commission under Section 12-B of the Monopolies and Restrictive Trade Practices Act, 1969 (the MRTP Act in brief) for grant of compensation for the loss suffered by him due to adoption of and indulgence in the alleged unfair trade practices by the respondent. THE respondent, namely the Canara Bank is a Nationalised Bank and the complainant is an account holder in the said Bank. THE complainant has alleged that without exercising due care and caution, the respondent issued a cheque book to an impostor bearing the name and account number of the complainant. THE said impostor forged signatures of the complainant on the cheques and withdrew an amount of Rs. 68,000/ through four different cheques. It has been further alleged that the fraudulent act of issuing the cheque book to an impostor and later honouring the cheques with forged signatures are instances of gross deficiency in service rendered by the respondent-Bank amounting to unfair trade practices as defined in the MRTP Act.

IN its reply, the respondent raised the issue of maintainability on certain grounds. Keeping this in view a preliminary legal issue as to the maintainability of the present proceeding was framed for decision at the threshold stage. The issue reads as follows : "Whether the present proceeding is maintainable in view of the preliminary objections taken by the respondent in its reply ?"

Learned Advocate for the respondent Mr. Atul Sharma contended that the respondent being a Nationalised Bank falls within the definition of a ''financial institution'' as given in Section 2(da) of the MRTP Act and, therefore, the respondent-Bank is entitled to exemption provisded under Section 3(g) of the MRTP Act. The legislative history of Section 3 of the MRTP Act reveals that although the MRTP (Amendment) Act, 1984 had exempted the financial institutions from the purview of the MRTP Act, a subsequent amendment made in the Act in 1991 completely altered the situation. Learned Advocate for the respondent, however, seemed to be unaware of these changes. By the Notification G.S.R. No. 605(E) dated September 27,1991 the exempt status granted to the financial institutions under Section 3(g) of the MRTP Act, has been withdrawn and by virtue of the said Notification, they have been brought within the fold of the MRTP Act. The Notification reads as follows : "In exercise of the powers conferred by Section 3 of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969), the Central Government hereby directs that the said Act shall apply to the undertakings specified in Clauses (a), (b), (c), (e) and (f) and financial institutions under Clause (g) thereof, except the undertakings owned or controlled by a Government Company, or the Government, as the case may be, engaged in the production of arms and ammunition and allied items of defence equipment, defence aircraft and warships, atomic energy, minerals specified in the Schedule to the Atomic Energy (Control of Production and Use) Order, 1953 and industrial units under the Currency and Coinage Division, Ministry of Finance, Department of Economic Affairs."

In view of the above Notification, we are unable to accept the plea of the Counsel for the respondent that since the respondent-Bank is a financial institution in terms of the definition contained in Section-2(da), it is beyond the purview of the MRTP Act. In its reply, the respondent has also challenged maintainability of this complaint on the ground that the saving provision in Section 4(2) of the MRTP Act is available to the respondent. Section 4(2) of the MRTP Act reads as follows : "Notwithstanding anything contained in Section 3 or elsewhere in this Act, so much of the provisions of this Act, as relate to matters in respect of which specific provisions exist in the- (i) Reserve Bank of India Act, 1934 (2 of 1934) or the Banking Regulation Act, 1949 (10 of 1949), or (ii) State Bank of India Act, 1955 (23 of 1955), or the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or (iii) Insurance Act, 1938 (4 of 1938) shall not apply to a banking Company...."

The exemption contemplated in the above provisions of the MRTP Act is available to a banking Company and that too only in such matters in respect of which specific provisions exist in the Reserve Bank of India Act, 1934 (2 of 1934), or the Banking Regulation Act, 1949 (10 of 1949). Under the Banking Regulation Act, 1949, a ''banking Company'' is a Company which transacts the business of banking in India. Section 3 of the Companies Act, 1956 defines a Company as any Company incorporated under the Companies Act. Since the Nationalised Banks '' including the respondent-Bank are not Companies incorporated under the Companies Act, the exemption provided under Section 4(2) of the MRTP Act is also not available to the respondent-Bank. Further, the Counsel for the respondent also failed to demonstrate whether specific provisions exist in the Acts referred to in Sub-clause (i) of Section 4(2) of the MRTP Act, to deal with the unfair trade practices of the kind alleged in the complaint application. In view of the aforesaid analysis of the relevant provisions of law, we are of the view that the present petition is maintainable and it is well within the ambit of the MRTP Act. Complaint maintainable.