The Supreme Court today issued notice to IndusInd Bank Ltd in an appeal moved by the Calcutta Stock Exchange (CSE) alleging deficiency in service in not notifying the exchange on dishonour of some high-value cheques issued by certain brokers.
The stock exchange had earlier moved the National Consumer Commission, which maintained that it was not the appropriate forum to grant relief as the complaint involved complicated issues of facts and law.
The stock exchange argued before a bench consisting of Justice D P Mohapatra and Justice P Venkatarama Reddi that the Consumer Commission had the power to deal with the issue as it involved deficiency in service of the bank.
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Cheques worth more than Rs 15 crore were drawn by four brokers in favour of the stock exchange. They were deposited in the bank branch in the stock exchange. They were dishonoured, but the stock exchange was not told about it immediately. Therefore, the stock exchange suffered losses.
This was deficiency in the service of the bank which was covered by the Consumer Protection Act, it was argued.
Further, the stock exchange complained that, as a result of the delay, the brokers continued to trade on credit basis though they were in default of payment. It led to a crisis in the market and the stock exchange had to resort to the settlement guarantee fund to meet the liabilities of the defaulting members.
The estimated loss was Rs 33 crore and the compensation claim was Rs 49 crore. The bank maintained that it had informed the stock exchange authorities orally. This has been denied by the stock exchange.