Bangalore District Court
Canara Bank vs M.N.Manohar on 25 August, 2015
IN THE COURT OF I ADDL.CITY CIVIL & SESSIONS
JUDGE,BANGALORE CITY.
(CCH.NO.2)
Dated, this the 25th day of August 2015.
PRESENT:Sri. RAVI M. NAIK,B.Com,LL.M.,
I Addl.City Civil & Sessions Judge, Bangalore.
O.S. NO.5550/1987
PLAINTIFFS CANARA BANK,
A Body corporate having its
Head Office at No.112,
J.C.Road, Bangalore-560 002,
represented herein by one of
its Principal Officers, Viz., the
Senior Manager, Exeutor &
Trustee Section,
Sri. P.Aravinda Rao.
(By Sri. S.G.R.,Advocate)
- VERSUS-
DEFENDANT 1. M.N.Manohar, Aged about
48 years, S/o M.S.Narayan,
Residing at No.87, 6th 'A'
Main, Tata Silk Farm,
Basavanagudi,
Bangalore-560 004.
2. Y.K.Raghavendra Rao,
Aged about 54 years,
S/o Y. Krishnamurthy Rao,
Residing at 'Bharathi',
11, 28th Cross, 7th Block,
Jayanagar, Bangalore-82.
D.1: by K.T.D.,D.2: by G.K.M.-
Advocates)
Date of institution of the 15-12-1987
suit :
2 O.S.No.5550/1987
Nature of the suit (suit on Suit for recovery of money
pronote, suit for declaration and
possession suit for
injunction,etc) :
Date of the commencement of 1.10.2002
recording of the evidence :
Date on which the Judgment 25.8.2015
was pronounced :
Total duration Year/s Month/s Day/s
27 08 10
RAVI M. NAIK),
I Addl.City Civil & Sessions Judge,Bangalore.
J U D G M E N T
Plaintiff Bank has filed a suit against the defendants with a prayer to pass judgment and decree directing the defendants 1 and 2 jointly and severally to pay a sum of Rs.13,52,285.99 together with interest at the rate of 16½ per annum from the date of suit till realization and such other reliefs.
2. The brief averments of the plaint are that plaintiff-Bank previously had a separate section called as "Executor Trustee and Taxation Section-shortly called "E.T.T Section". The plaintiff-Bank as a part of this banking business used to accepting the Executor and 3 O.S.No.5550/1987 Trusteeship of the Estate left by their constituents and administering the same for them and their heirs and successors and the plaintiff also assists its clients in the matter of preparation of returns of income and wealth and representing them in assessment proceedings and to meet the tax liabilities from out of the funds provided by the clients. The said activity is carried out by a separate section called as ETT Section.
3. On account of the work load, the said section has been bifurcated into two sections i.e., (1) Executor and Trustee Section( E & T Section) and (2) Taxation and Gratuity Section(T & G Section). The second defendant was the Superintendent of the E.T.T Section from 1/12/1970 to 24/6/1981 and as Senior manger from 25/6/1981 to 10/9/1981 and the first defendant was the person functioning next below superintendent between 1/12/1971 and 31/8/1977. After 1979, the designation of the superintendent was changed as senior manager, E.T.T Section and that of the officer was changed as 4 O.S.No.5550/1987 Manager, E.T.T Section and he was promoted as Superintendent and functioned as such between 1/09/1977 and 24/06/1981. Thereafter, between 25/6/1981 and 11/09/1981 he has functioned as the Manager of E.T.T section.
4. It is further stated that during that period, the defendants No.1 and 2 were managing a large number of estates of the clients of the bank and dealing with their funds in the course of such management. During that period, the first defendant committed various acts of misappropriation and fraud. The second defendant being officer immediately above first defendant with the connivance of first defendant participated in the acts of misappropriation and fraud with regard to few accounts. In para-5 of the plaint it is stated that, defendant No.1 and 2 were dismissed from service and dismissal of defendant No.1 and 2 were preceded by a Departmental enquiry. In para-7 of the plaint, the plaintiff-Bank has in detail stated regarding one of the constituents of Bank 5 O.S.No.5550/1987 Mrs. A.S.Kantamani Ammal and further stated that said Kanthamani created a Trust by name "Suryakantamani Ammal Trust" and the defendants misappropriated the amount pertaining to the said Trust. In para-8, the plaintiff-Bank has stated regarding another constituent of the Bank by name Smt.Rukminiamma and in detail stated regarding the misappropriation of the amount by the defendants in respect of the said constituent. In para-9 of the plaint, the plaintiff-bank has stated regarding the amount which has not been accounted by the first defendant and in para-10 of the plaint, the plaintiff-bank has stated regarding withdrawal of Rs.6,250/- by defendant No.1. In para-11 of the plaint, it is further stated that, first defendant has withdrawn a sum of Rs.2,000/- by cheque drawn in favour of Vedavyasachar and said amount has been encashed through one Cheluvaiah and said cheque also remained unaccounted. It is further stated that, no probate or duty or other expenses were involved in connection with 6 O.S.No.5550/1987 this will as the bank was advised that no probate was necessary. Therefore, no legal expenses were incurred. It is further stated that on 12/11/1979 a sum of Rs.450/- has been debited to the said account showing it as payment made to Smt.Vimala Pai. She is not a beneficiary under the Will of the deceased. The said payment appears to have been made for some transaction between defendant No.1 and the said claim with which the estate of Smt.Rukmniamma is in no way concerned. In para-13 to 16 of the plaint, the plaintiff- bank has narrated regarding misappropriation of Rs.17,000/-, Rs.2,800/-, Rs.2,350/- and Rs.9,032/- on 13/11/1979, 15/11/1979, 10/01/1980 and 20/11/1979. In para-17 to 20 of the plaint, the plaintiff- bank has stated about the misappropriation of Rs.500/-, Rs.17,986/-, Rs.300 and Rs.22-04p by defendant No.1,
5. It is further contended that, one T.L.Ramachar was the constituent of the plaintiff-bank, he died leaving a Will dated: 9/10/1971 under which he appointed 7 O.S.No.5550/1987 plaintiff-Bank as Executor. Probate of the said Will was obtained on 2/8/1976. During the course of administration of the said estate, defendants No.1 and 2 have made various drawings out of funds of the said Estate. In para-22 of the plaint, the plaintiff-bank has narrated the date of drawings by 1st and 2nd defendants and the quantum of amount. It is further contended that, the said drawings of amount are evidenced by debit slips and cheques issued by respective defendants and out of these drawings, first defendant has accounted for Rs.5,067.13 and 2nd defendant accounted for Rs.13,387.50 and the remaining amount is unaccounted and has been misappropriated by the defendants and it is further stated that first defendant has failed to account for Rs.14,793.77 and 2nd defendant has failed to account for Rs.20,294.50. As a result of these drawings and misappropriation, the beneficiaries were paid less than their entitlements. In para-22, the plaintiff bank has stated the names of beneficiaries, amount entitled and 8 O.S.No.5550/1987 amount paid to them and it is further contended that, out of the monies drawn by defendant No.1, a sum of Rs.50/- drawn on 4/11/1976 is shown to have been paid to M/s.L.K.S Murthy and Company, the stock and share brokers on 9/11/1976. There was no reason to pay the same. Similarly a sum of Rs.300/- drawn by defendant No.2 on 22/4/1976 mentioned in the chart is shown to have been paid to M.N.Vasantha Rao on account of Estate Duty handling charges. This is unauthorized debit as the records do not bear out that service of any such person was availed for handling the Estate Duty matters. Thus, the total amount misappropriated by defendants from out of the Estate is Rs.35,088-27. In para-23 of the plaint, the plaintiff-Bank has stated regarding another constituent of plaintiff bank Mr.K.R.K.Bhat executed a Will on 19/8/1972 appointing the plaintiff bank as executor. It is further stated that there are 9 beneficiaries under the said will. The amount realized was Rs.1,01,957-58 and estate duty, Bank 9 O.S.No.5550/1987 charges etc., accounted to Rs.17,285-33 and made some payments to the beneficiaries and in para-24 to 27 of the plaint, the plaintiff bank in detail has stated that out of the funds of the Estate amount, misappropriated by first defendant. In Para-28 of the plaint, the plaintiff bank has stated regarding another constituent Sri.K.Bhajandas and further stated that in the account of said Bhajandas at D.V.G Road Branch, Bangalore, there was a credit balance of Rs.35,875/- and further stated that, said amount was closed by defendant No.1 on 3/6/1980 and the total amount was remitted to S.L. Suspense account, from which Rs.35,000/- was subsequently invested in Yediyur Branch and the balance of Rs.875/- has been withdrawn on two occasions i.e., Rs.375/- on 4/6/1980 and Rs.500/- on 31/5/1980. Thus, the total misappropriation in the amount comes to Rs.875/-.
6. In para-30 to 33 of the plaint, plaintiff bank has stated regarding its constituent Sri.M.N.Bhandarkar and 10 O.S.No.5550/1987 the misappropriation made by 1st defendant from the Estate of said Bhandarkar. In para-34 to 39, the plaintiff bank has stated regarding its constituent Sri. K.P.Kini and further stated that first defendant has misappropriated a sum of Rs.60,165.63 from the said account and in para-40, the plaintiff-bank has stated regarding its another constituent by name Sri.K.S.Shanbhogue and in para-41 to 43 plaintiff- bank has stated regarding the estate of late Sri.Poornashashi Choudry and further stated the amount misappropriated by the said account. In para-44 to 48 the plaintiff-bank has stated regarding its another constituent Sri.Batilboi and further stated regarding the misappropriation of Rs.84,422-16 and In para-49 to 52 the plaintiff bank has stated regarding its another constituent Sri. Fredrick Johnson and further stated regarding the misappropriation of Rs.8,029-02 and para-53 , plaintiff- bank has stated regarding its another constituent Sri.Diwakar Amrit and also stated that the amount of 11 O.S.No.5550/1987 Rs.4,200 has been misappropriated. In para-54 to 60, the plaintiff-bank has stated regarding its constituent Sri. V.S.Rathna and further stated regarding the misappropriation of Rs.1,913-14ps and para-61and 62, the plaintiff-bank has stated regarding its another constituent Sri.K.K.Kamath and also stated regarding the misappropriation of Rs.4,130-85ps from the estate account. In para-63 of the plaint, the plaintiff bank has narrated regarding its another constituent Smt.Kalyani @ Sundari Bai. In para-64, the plaintiff bank has stated that the defendant No.1 has misappropriated the amount of Rs.88,274.90ps and out of that, only Rs.14,193.50ps has been accounted for. In para-65 of the plaint, the plaintiff bank has narrated the amount withdrawn by the first defendant and in para-66, the plaintiff bank has stated regarding its another constituent Dr.A.S.Venkatachalam and also stated the amount misappropriated by the first defendant pertaining to the said constituent to the tune of Rs.1,44,535.29. In para- 12 O.S.No.5550/1987 67 of the plaint, the plaintiff bank has stated regarding its another constituent Sri.C.S.Shah and stated regarding the manipulation made by the first defendant. In para-68, the plaintiff bank has stated that the first defendant has withdrawn a sum of Rs.75,000/- initially from the S.B.Account No.21992 on 15.4.1980 authorized by defendant No.2 and further stated that both the defendant nos.1 & 2 misappropriated Rs.75,000/-. In para-69 of the plaint, the plaintiff bank has stated withdrawal of Rs.25,000/- by way of cheque bearing No.780164 in the S.B.A/c No.21992. In para-70 of the plaint, the plaintiff bank has stated the unauthorized withdrawal by the defendant nos.1 & 2 and misappropriation of Rs.1,10,000/-. In para-72, the plaintiff bank has stated regarding the failure on the part of the first defendant to account for sum of Rs.557.40 pertaining to the constituent Smt.Ratnabai. In para-72 of the plaint, the plaintiff bank has stated that the first defendant received four cheques from P.K.Shenoy-stock 13 O.S.No.5550/1987 and share broker and credited the same to his own account to the tune of Rs.46,848.90 and it is further stated that the defendant no.1 misappropriated Rs.5,589/- and Rs.355/- and in para-76 to 92, it is stated that the first defendant has misappropriated Rs.6,987.50, Rs.8,700/-, Rs.13,000/-, Rs.4,000/-, Rs.2137/-, Rs.2,756/- Rs.53,750/-, Rs.12,500/-, Rs.1,580.70, Rs.10,920/- Rs.150/-, Rs.1,530/-, Rs.5,275/-, Rs.8,180/-, Rs.2,816/-, Rs.16,280.90, Rs.450/-, Rs.1,670/-, Rs.40/-, Rs.2,01,790.46.
7. It is further stated that the defendants have also misappropriated and committed fraud in respect of the Canara Bank Employees gratuity fund to the tune of Rs.5,86,503.15. In para-93 of the plaint, the plaintiff bank has stated the said details. In para-100 of the plaint, the plaintiff bank has stated that the act of misappropriation and fraud occurred over several years commencing from the year 1975 onwards. They could not be detected and they could be restored only after the 14 O.S.No.5550/1987 elaborate investigation conducted by the Special Officers and it is only when the said Officers submitted their reports from April 1986 to February 1987 and it was possible for the bank to unearth the fraud. For above all reasons, the plaintiff bank has prayed to pass judgment and decree directing the defendants to pay jointly and severally a sum of Rs.13,052,285.99 together with the cost of the suit and interest at the rate of 16.50% p.a., from the date of the suit till realization.
8. In pursuance of the suit summons, the defendant nos.1 & 2 have appeared through their counsel and filed separate written statements.
9. The sum and substance of the contention of the first defendant in his written statement is that he has denied that he was managing the assets of the clients of the bank. He has also denied that he has committed the acts of misappropriation and fraud as alleged by the plaintiff bank. He has admitted that he was dismissed from service. He has contended that he challenged the 15 O.S.No.5550/1987 said dismissal in a writ petition. He has denied the other averments made in the plaint.
10. It is contended that sundry liabilities account branch adjustment reconciliation account are maintained by separate sections called the accounts sections. Said accounts can be operated strictly in terms of manual of instructions. The amounts in the said accounts cannot be withdrawn by the first defendant without the clearance from the Officers in charge of these accounts. In the absence of others who were in charge of said sundry liability account and branch adjustment reconciliation account, and cash accounts and gratuity fund accounts during the relevant period, the suit cannot proceed. It is further contended that he does not remember and does not admit whether Sri.K.P.Kini was one of the constituents or that he died on 21.6.1979 leaving behind a Will dated 17.10.1978 appointing the plaintiff as Executor. It is further contended that there is a glaring contradiction in the statements made by the 16 O.S.No.5550/1987 plaintiff in the plaint. It is contended that P.K.Thyagarajan is one of the esteemed customer of the plaintiff bank to safeguard him and to make the first defendant a scapegoat, he has been made as a fictitious person. It is further contended that the first defendant does not know one Smt.Rajalakshmi. The first defendant has also denied regarding the estate account of Sri.K.P.Shanbhogue, Smt.Roopavathi Chowdhuri, Sri.S.R.Batliboi, Frederick Johnson, Diwakar Amrit, V.S.Ratna, K.K.Kamath, Kalyani Sundari Bai, Dr.A.S.Venkatachalam, C.S.Shan. It is admitted that the plaintiff bank initiated disciplinary proceedings, but contended that subsequently the same was dismissed.
11. It is contended that this suit is bad for non- joinder of necessary parties and also bad for misjoinder of parties and the suit is barred by Law of limitation. It is further contended that the first defendant was a clerk till 1969. He was an accountant from 1970 to 1977. He was Manager from 1978 to 1981. In August 1981 he was 17 O.S.No.5550/1987 given independent charge as Manager. The first defendant has denied his signature on the cheque as alleged by the plaintiff. It is further denied that the defendant gave instructions for issue of two demand drafts by debiting the amounts required in favour of LIC and in favour of Smt.Sudha Pandith It is also denied that the first defendant received a demand draft by debiting the estate of the deceased for a sum of Rs.12,500/- in favour of S.B.I. A/c. Indian Rayon Debenture Account. It is also denied that the first defendant issued a cheque in favour of L.K.S.Murthy for a sum of Rs.1,58,070/- and also denied the payment of Rs.10,920/- by way of cheque in favour of K.K.Shenoy as an unauthorized payment for his own benefit. The first defendant has denied the averments made in para-85 to 102 of the plaint.
12. It is contended that E.T.T. section was controlled by Superintendent and it was the 2nd defendant and he was Superintendent from 1969 upto the date of which he was dismissed. It is further 18 O.S.No.5550/1987 contended that at no point of time prior to August 1981 this defendant had any say in any manner pertaining to the operation of accounts. It is further contended that the first defendant was not at all in independent charge of any transaction prior to August 1981. It is further contended that only to bring the suit within the period of limitation, show cause notice was issued to the first defendant in November, December 1981. It is further contended that the plaintiff bank deliberately suppressed the information as to when Special Officers were required to give their report. It is denied that Special Officers gave report in the month of April 1986. It is contended that in the month of September 1981 the plaintiff bank cancelled that was executed in favour of the first defendant and the same was advertised in news paper also. Therefore, it does not lie in the mouth of the plaintiff to say that it was blissfully ignorant on anything and everything till 1986. 19 O.S.No.5550/1987
13. It is further contended that the Canara Bank employees gratuity fund is a separate trust. In the circumstances, the plaintiff cannot file a suit with respect to the alleged loss to the gratuity fund. It is further contended that there was no contract for payment of interest, no equitable grounds are made out for payment of interest. It is further contended that the plaintiff is different from ETP section of the plaintiff and Canara Bank employees gratuity fund. Hence, the plaintiff bank has no locus standi to file this suit. Hence, prayed for dismissal of the suit.
14. The 2nd defendant has filed separate written statement denying the plaint averments. It is contended that there is no foundation in law for the interest claimed. The 2nd defendant has controverted the averments made in para-6 to 99 of the plaint. It is contended that Rs.25,000/- stated in para-22 of the plaint must have been drawn for a specific purpose connected with the affairs of the bank. The receipts for 20 O.S.No.5550/1987 the expenditure have also been kept. It is further contended that Ganesh Bhat was a clerk of the bank working directly under the defendant no.1. If the 2nd defendant had counter signed the debit to evidence Ganesh Bhat taking the amount, it cannot be lugged against the 2nd defendant. It is further contended that no other account is shown to have been handled by the 2nd defendant and he is sought to be made vicariously responsible for the acts of the first defendant. It is further contended that the statement made in para-100 of the plaint regarding limitation is false. No special officer was deputed from April 1986 to February 1987. The reports must have been secured for the purpose of this suit and it cannot bind the 2nd defendant. The bank had internal inspection department not only as regards administrative aspect of functions of ETT Section, it was also having a special eye on the estate accounts. Each account has been scrutinized, verified, and tallied with the vouchers 21 O.S.No.5550/1987 and no earlier reports and no earlier reports speak about the averments in the plaint.
15. It is further contended that some of the higher ups specially Sri.Eknath Kamath-the then Chairman and Sri.B.Ratnakar-Chairman in Office when the suit was filed were against this defendant from the beginning. It is further contended that the 2nd defendant was mainly shouldering the responsibility of the taxation department and had to do taxation account, compile figures, suggest tax planning, submit returns and appear before the various I.T.Authorities as and when occasion arose. It is further contended that the said responsibility was given because of his efficiency and earlier experience in I.T.Department and the 2nd defendant would not concede as a matter principle tax evasion either by the bank or by its Officers. His planning was not heeded to. It is further contended that this drew the wrath of the above Officers and their immediate subordinate officers. They wanted to observe the activities of the other erring Officers. 22 O.S.No.5550/1987 Mr.B.Murthy-brother of Sri.B.Ratnakar who has figured many misappropriation accounts along with the first defendant. It is further contended that the 2nd defendant was practically humiliated and tortured while in service. He was attempted to be transferred twice. Though entire investigation was done, there is not a pie of misappropriation in the taxation section.
16. It is further contended that when they could not do away with the defendant and when there was a major difference of opinion regarding taxation policy in August 1991, they intelligently arranged raid of 2nd defendant's house and office by CBI choosing the dates when the defendant had gone on leave for personal work at Delhi on 5.9.1991. In para-11 of the written statement, the 2nd defendant has further pleaded regarding the animosity with which the raid is done. In para-12 of the written statement, the 2nd defendant has contended that the investigation was completed. A charge sheet was also came to be filed by 10.8.1982. His further contention is 23 O.S.No.5550/1987 that no further investigation is done and reports are submitted from April 1986 to February 1987. It is further contended that in the year 1986, the CBI has filed 11cases against the first defendant for misappropriation and in one of the cases one B.P.Murthy and brother of Ratnakar are also accused. It is further contended that when the gravity of other irregularities in the bank came to the stage of explosive point, to divert the attention of the public at large and the Government of India, this suit is engineered which is hopelessly barred by limitation.
17. It is further contended that there is no cause of action to file this suit. The 2nd defendant is not due any amount to the plaintiff bank. The 2nd defendant was due his service benefits. His service benefits have been adjusted by one way or the other. Sum of Rs.62,187.60 is withheld. Bank was of the definite view and the departmental enquiry level his liability was fixed as representing the loan amount and amounts payable to the 2nd defendant were withheld. It is further contended 24 O.S.No.5550/1987 that the bank cannot approbate and reprobate. It is further contended that in a departmental enquiry, they have found the defendant no.2 not liable just to satisfy somebody else and divert the attention of somebody else and shield somebody else filed a false suit. It is further contended that more amounts are withheld than the amounts due from the 2nd defendant. It is further contended that the 2nd defendant had maintained all regular vouchers which have been inspected from time to time by the inspection staff and they are regularly kept in the files. Papers are removed in the absence of the 2nd defendant from the files. No opportunity was given to the 2nd defendant to handle the file subsequently. Hence, the 2nd defendant has prayed for dismissal of the suit.
18. On the basis of the above pleadings of the parties, this Court has framed the following issues :
1. Whether plaintiff proves that the suit is filed by authorized person ?
2. Whether plaintiff proves that "E.T.T" Section is part and parcel of plaintiff ?25 O.S.No.5550/1987
3. Whether plaintiff proves that defendants committed fraud and misappropriation in their section ?
4. Whether plaintiff proves that defendants have committed various misappropriation as per para 7 to 93 in various accounts as mentioned in detail ?
5. Whether plaintiff proves that defendants have misappropriated Rs.8,972.36 from the Bank as per para-93 of the plaint ?
6. Whether plaintiff proves that defendants have further misappropriated Rs.5,86,503.15 besides the above mentioned amount ?
7. Whether defendants are liable to pay Rs.13,52,285.99 with 16½ % interest p.a. ?
8. Whether the defendants prove that suit is not maintainable as "E.T.T." Section is an independent authority ?
9. Whether the defendants prove that his dismissal is illegal in view of pendency of suit ?
10. ( Note: Due to typographical error, this issue has been typed as Whether the defendants prove that his dismissal is legal in view of pendency of suit and the same is rectified.
10.Whether there is any cause of action to this suit ?
11.Whether plaintiff is entitled for suit relief as prayed for ?
12.If so, under what order or decree ?
Addl.Issue :
26 O.S.No.5550/1987
1. Whether defendant no.2 proves that the suit of the plaintiff is barred by the Law of limitation ?
19. The plaintiff bank in order to prove its case, got examined its Sr.Manager-N.Ramaswamy as PW.1 and the Director(Operations), Shivamoga steels- one Satyanarayana is examined as PW.2 and got marked Exs.P.1 to P.280 documents. The 2nd defendant is examined as DW.1 and got marked Ex.D.1 to D.34 documents.
20. Heard the learned Counsel appearing for the plaintiff and the defendants. In addition to the oral arguments, the learned Counsels appearing for the defendant nos.1 & 2 have submitted their written arguments.
21. My findings on the above issues are as follows:
Issue nos.1 to 4 : In the affirmative Issue no.5 : In the negative Issue no.6 & 7 : Partly in the affirmative Issue no.8 & 9 : In the negative Issue no.10 : In the affirmative Issue no.11 : partly in the affirmative Addl.Issue : In the negatiove Issue no.12 : As per final Order For the following:27 O.S.No.5550/1987
REASONS
22. Addl.Issue no.1 : Both the defendant nos.1 & 2 have contended that the present suit is barred by law of limitation as contemplated under Sec.17 of the Limitation Act. According to the defendants, the alleged investigation regarding misappropriation of money was concluded way back in the year 1982 itself. The learned Counsel appearing for the defendant nos.1 & 2 drew the attention of this court to Ex.D.9 and D.15 and argued that Ex.D.9 report is given by the higher ranking officials of the plaintiff bank pertaining to the transactions in the E.T.T.Section on 24.6.1982 and Ex.D.15 another report given by the Chartered Accountant with regard to the gratuity fund transaction dated 28.8.1982. It is further contended that in para-100 of the plaint, the plaintiff bank has falsely averred that it got knowledge of the alleged fraud during the year 1986-87. Thus, the bone of contention of the learned Counsel appearing for the defendant nos.1 & 2 is that since the suit is not filed 28 O.S.No.5550/1987 within three years from the date of the knowledge of the plaintiff bank, hence, the suit is barred by law of limitation. The learned Counsel appearing for the defendant no.2 further argued that Ex.D.2 to D.5 show that the existence of fraud was discovered way back in the year 1982. The plaintiff being a nationalized bank, could have easily discovered the fraud. But the plaintiff bank failed to file the suit within the prescribed period.
23. As against the said argument, the learned Counsel appearing for the plaintiff bank contended that nothing had concluded in the year 1981-82. The defendants have fiduciary relation not only to the bank, but also to the customers, over a period of time several lakhs have been drawn. Investigations were conducted, departmental enquiry was held. In para-100 of the plaint, the plaintiff bank has clearly averred on the point of limitation. The ramification of misappropriation could be discovered only on an elaborated investigation conducted by the Special Officers and only when the Special Officers 29 O.S.No.5550/1987 submitted their reports from April 1986 to February 1987 the plaintiff bank could unearth the fraud and ascertain the amounts misappropriated. In support of his contention, he has relied on a decision reported in AIR 2001 SC 2763-Pallav Sheth Vs. custodian & others. At page-2778 para-47, the Hon'ble Apex Court has held as under:
"Section 17 of the Limitation Act, inter alia, provides that where, in the case of any suit or application for which a period of limitation is prescribed by the Act, the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of the defendant or his agent (section 17(1)(b)) or where any documents necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him (Section 17(1)(d)), the period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have discovered it; or in the case of a concealed documents, until the plaintiff or the applicant first had the means of producing the concealed documents or compelling its production. These provisions embody fundamental principles of justice and equity, viz., that a party should not be penalized for failing to adopt legal proceedings when the facts or material necessary form him to do so have been willfully concealed from him and also that a party who has acted fraudulently should not gain the benefit of 30 O.S.No.5550/1987 limitation running in his favour by virtue of such fraud."
Sec.17 of the Limitation Act reads as under:
"Effect of fraud or mistakes - (1) where, in the case of any suit or application for which a period of limitation is prescribed by this Act,-
(a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or
(b) the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or
(c) the suit or application is for relief from the consequences of a mistake; or
(d) where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him, the period of limitation shall not begin to run until plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have discovered it; or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production."
24. The version of PW.1 & 2 coupled with the averments made in para-100 of the plaint, clearly 31 O.S.No.5550/1987 discloses that the plaintiff bank could unearth the fraud on the basis of the Special Officers report from April 1986 to February 1987. Sec.17 sub-sec.(1)(d) contemplates that the period of limitation shall not begin to run until plaintiff or applicant has discovered the fraud. No doubt Ex.D.9 reveals that the Sr.Manager of Inspection department has submitted his report regarding the misappropriation on 24.6.1982. But, that report itself cannot be considered as exhaustive report regarding the misappropriation of the amount by the defendant nos.1 & 2. Ex.D.15 is another report pertaining to the misappropriation of Canara bank employees' gratuity fund. It came to be filed on 28.8.1982. Thus, Ex.D.9 is confined to misappropriation with respect to the E.T.T.Section and Ex.D.15 is confined to the misappropriation in respect of gratuity fund. The ramification of misappropriation was not put to an end in the year 1982. The wordings of Sec.17 sub-sec.1(d) is very clear that the limitation shall not begin to run until 32 O.S.No.5550/1987 the fraud is discovered. Discovery of fraud cannot be based on several incidents. It must be based on the overall verification of the reports. In the light of the ratio laid down in the aforesaid decision cited supra relied on by the learned Counsel appearing for the plaintiff, after verification of all the records and the reports, the plaintiff bank has filed the suit. The learned Counsel appearing for the defendant nos.1 & 2 drew the attention of this Court to proviso to Sec.17(1)(d) and emphasized the argument on the wordings used in proviso to Sec.17(d) "or could with reasonable diligence have discovered it". The word "or" used in Sec.17(d) is not conjunction. It is disjunctive. The word "and" is not used there. As rightly argued by the learned Counsel appearing for the plaintiff, it is not the one action of the defendants caused fraud but, they caused misappropriation in several transactions. Under these circumstances, in my opinion, the argument advanced by the learned Counsel appearing for defendant nos.1 & 2 that the suit is barred 33 O.S.No.5550/1987 by law of limitation holds no water. Accordingly I answer Addl.Issue no.1 in the negative.
25. Issue no.1: In the written statement, the defendants have contended that the suit is not filed by the authorized person. The cause title of the plaint discloses that the then Senior Manager of the plaintiff bank- one Mr.Arvind Rao filed a suit in the year 1987. PW.1 who was the Manager, Inspection, Regional Inspectorate, Bangalore, has deposed on behalf of the plaintiff bank. On oath he has stated that during the relevant period i.e., from 1982 to 1986 he was working as Manager, Inspection, Regional Inspectorate, and also stated that plaintiff bank acts as an agent and acts as a Power of attorney holder on behalf of the clients. PW.2 during the relevant period was working as Manager of Disciplinary Action Cell and he was entrusted with the work of investigation into various irregularities with executor, taxation and trustees section of the bank. He has stated the said aspect on oath. The Senior Manager 34 O.S.No.5550/1987 of the plaintiff bank as head of Executor, taxation and trust section of the bank, has filed the present suit. Ex.P.245 is the Deed of Trust & rules and regulations. The said document reveals the aim and object of constitution of Canara Bank Employees Gratuity Fund. Under Sec.3 of the Indian Trust Act, the word "Trust" is defined as :
"It is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner:
The person who reposes or declares the confidence is called "author of the trust". The person who accepts the confidence is called the "trustee". The person for whose benefit the confidence is accepted is called the "beneficiary. The subject matter of the trust is called the "trust property" or "trust money".
The beneficial interest or interest of the beneficiary is his right against the trustee as owner of the trust property; and the instrument, if any, by which the trust is declared is called the "instrument of trust".
26. In the instant case, the plaintiff bank in the plaint has clearly pleaded that the activities carried out by the plaintiff bank in addition to the banking business, 35 O.S.No.5550/1987 accepting Executor and Trusteeship of the Estates left by their constituents and administering the same for them and their heirs and successors and such other duties. Thus, the plaintiff bank was serving its customers by separate wings called "Executor and Trustee Section (E&T Section) and Taxation and gratuity section (T&G Section). The then Manager who had filed this suit being the Principal Officer of the plaintiff bank heading the aforesaid two sections has got every right to file the suit. Hence, I answer Issue no.1 in the affirmative.
27. Issue no.2 : The specific contention of the plaintiff bank is that the E.T.T.Section is part and parcel of the plaintiff bank. To substantiate the contention of the plaintiff bank, PW.1 on oath has stated that apart from the banking business, the plaintiff bank accepts the trusteeship of their clients, administer the estates left by them. The plaintiff bank also accepts the preparation of income tax returns, wealth tax matters and also represent them in assessment proceedings and also pay 36 O.S.No.5550/1987 tax from the amount paid by their clients and the plaintiff bank also acts as an agent, as a Power of Attorney holder on behalf of the clients to represent their clients in the above matters. It is further stated that the E.T.T.Section deals with the above said matter exclusively.
28. PW.2 on oath has stated that the plaintiff bank deals with the E.T.T.Section for meeting gratuity liability in the case of employees of the plaintiff bank becoming eligible for payment of gratuity out of the moneys at the credit of the gratuity fund. The correspondence made by the constituents of the plaintiff bank substantiates that the plaintiff bank in addition to its regular course of banking business, was also engaged in carrying the business of Executors, Trustee & Taxation Section pertaining to the to its constituents. Hence, this court is of the opinion that ETT Section IS PART AND PARCEL OF plaintiff Bank. Accordingly, I answer the Issue no.2 in the affirmative.
37 O.S.No.5550/1987
29. Issue no.3 to 6 : All these issues are interlinked with each other, in order to avoid repetition, I would like to answer them together.
30. According to the plaintiff bank, one Suryakanthamani Ammal was one of the constituents of the plaintiff bank. To substantiate the said contention, the plaintiff bank has got marked Exs.P.1 to P.4. Ex.P.1 is the letter dated 1.5.1975 written by Suryakanthamani Ammal to the Superintendent of ETT Section of the plaintiff bank. Ex.P.2 is the letter dated 13.12.1978 written by the Manager, plaintiff bank, ETT Section to remit Rs.75/- in the name of Smt.Yamunabai Ammal and Rs.10/- as handling charges. Ex.P.3 is the debit slip for Rs.450/-. Ex.P.3(a) is the signature of the first defendant. Ex.P.4 is the letter written by the Treasurer of Meenakshi Ammal Trust to the Sr.Manager, ETT Section of the plaintiff bank, stating that the said Trust has not received any remittance from the bank in the year 1979. 38 O.S.No.5550/1987
31. The learned Counsel appearing for defendant nos.1 & 2 drew the attention of this Court to Ex.D.9 Inspection report and argued that in the said report, there is no mention regarding the misappropriation of the amount pertaining to Smt.Suryakanthamani Ammal. It is pertinent to note that the first defendant except filing the written statement denying the plaint averments, has not entered into the witness box to controvert the averments of the plaint and evidence of PWs.1 & 2. Ex.P.3 is the debit slip for Rs.450/-. Said amount is the interest accrued on the trust fund in the name of Smt.Suryakanthamani Ammal. The specific case of the plaintiff is that the first defendant without remitting the said interest to the said trust withdrew the said amount, debited the said amount to the sundry account of the balance sheet and central account section raising branch advice requisition against the DVG road branch. The defendant no.1 in his written statement at para-4 & 5 has denied the said misappropriation in toto. But the 39 O.S.No.5550/1987 debit slip i.e., Ex.P.3 is clear that the first defendant drawn the money of Rs.450/-. Ex.P.3(a)& (b) are his signatures. Both on the front and hind side of Ex.P.3, the first defendant has signed and drawn the money. If really the said amount was credited to the Smt.Suryakanthamani Ammal trust, the beneficiary under the said trust i.e., Smt.Meenakshi Ammal trust would not written the Ex.P.4 letter regarding non- remittance of the said amount. Since the first defendant has withdrawn the said money and failed to offer any explanation regarding the utilization of the said money, it is clear that the said amount is misappropriated by the first defendant.
32. The recitals of Ex.P.5 to P.23 coupled with para- 8 of the plaint averments and the version of PW.1 at page-6 to 16 reveals that one late Smt.Rukmini ammal was the constituent of the plaintiff bank and during the investigation, it was revealed that an amount of Rs.62,484.04 was misappropriated by the defendant 40 O.S.No.5550/1987 no.1 in the account of said Smt.Rukmini ammal. Ex.P.5 is the Will dated 28.11.1974. Ex.P.6 is the branch advice for opening account amount Rs.1,10,115.82. Ex.P.7 and P.8 are the debit slips(self) for Rs.5,000/- and Rs.7,000/- withdrawn by the defendant no.1. Ex.P.9 to 19 are the cheques for Rs.12,253/-, Rs.6,250/-, 2,000/- (both wthdraw by defendant no.1), cheque for Rs.450/-, cheque for Rs.17,000/-, cheque for Rs.28,000/-, cheque for Rs.2,350/- (withdrawn by defendant no.10, cheque for Rs.9,032/-, cheque for Rs.500/-, cheque for Rs.17,986/- & cheque for Rs.300/-. All the above said cheques were withdrawn by defendant no.1. Ex.P.20 reveals that Rs.700/- recredited in cash by defendant no.1. Exs.P.21 & P.22 are the pay slips for Rs.12,059/- and debit slip for Rs.22.04 (withdrawn by defendant no.1) and Ex.P.23 is the letter by Lokur & Company, giving details of chques. PW.1 has identified the signature of the defendant no.1 on Ex.P.7 at Ex.P.7(a) &
(b). Ex.P.8 at Ex.P.8(a) & (b). Ex.P.9 at Ex.P.9(a), Ex.P.10 41 O.S.No.5550/1987 & P.11 at Ex.P.10(a) and P.11(a), Ex.P.15, Ex.P.17, Ex.P.18, Ex.P.19, Ex.P.20 and Ex.P.22 at Ex.P.15(a), P.17(a), P.18(a), P.19(a), P.20(a) and P.22(a). In page-16 of the chief examination, PW.1 has clearly stated the amount misappropriated by defendant no.1 at Rs.62,484.04. No doubt the defendant no.1 & 2 have denied the said allegation made against them, but the aforesaid documents Exs.P.5 to P.23 clearly reveals that the first defendant has misappropriated the amount to the tune of Rs.62,484.04.
33. The version of PW.1 at page-17 to 23 of his chief examination coupled with the averments made in para- 22 of the plaint and the recitals of Exs.P.23 to P.41 reveals that one T.L.Ramachar was the constituent of the plaintiff bank. He expired on 11.10.1975. He executed Ex.P.23 Will. Ex.P.24 is the cheque for Rs.1,750/-. Ex.P.25 is the cheque for Rs.11.25, Ex.p.26 is the cheque for Rs.758.73. Ex.P.27 is the cheque for Rs.4,406.75 and Ex.P.28 is the cheque for Rs.2,149.17. Ex.P.29 is the 42 O.S.No.5550/1987 cheque for Rs.1,110/-. Ex.P.30 is the cheque for Rs.1,000/- , Ex.P.31 is the cheque for Rs.150/-. Ex.P.32 is the cheque for Rs.250/-. Ex.P.33 is the cheque for rs.3,000/-. Ex.P.34 is the cheque for Rs.725/-. Ex.P.35 is the cheque for Rs.3,000/-. Ex.P.36 is the cheque for Rs.1,500/-, Ex.P.37 is the cheque for Rs.50/-. On oath PW.1 has stated that all the amounts stated in Ex.P.24 to P.37 were drawn by the first defendant and he identified the signature of first defendant at Ex.P.24(a), 25(a), 26(a), 27(a), 28(a), 29(a), 30(a), 31(a), 32(a), 33(a), 34(a), 35(a), 36(a) and 37(a). Ex.P.38 to P.41 are the cheques for Rs.1,000/-, debit slip for Rs.24,000/-, cheque for Rs.300/- and debt slip for Rs.8,382/- respectively. The amounts stated in the said documents were drawn by defendant no.2. Thus, the version of PW.1 coupled with the recitals of the said documents clearly disclose that the defendant nos.1 & 2 together misappropriated a sum of Rs.35,088.27.
43 O.S.No.5550/1987
34. The version of PW.1 coupled with the averments made in para 23 to 27 of the plaint and chief examination version of PW.1 at page 23 to 28 and the recitals of Exs.P.42 to P.49 disclose that one K.R.K.Bhat was the constituent of the plaintiff bank. He executed a Will on 19.8.1972 appointing the plaintiff as an executor. Ex.P.42 discloses that the first defendant drawn sum of Rs.1,100/- by way of debit slip and Ex.P.43 is the debit advice for Rs.25,685/-. Ex.P.44 is the letter from defendant no.1 to Smt.Nalini Gopinath dated 14.3.1973 wherein the first defendant promised to make payment to the beneficiaries under the Will. Ex.P.45 is the originating advice for Rs.600/-. The version of PW.1 discloses that the first defendant was acting Superintendent of ETT section at that time, failed to give account for the amount stated in Ex.P.45. Ex.P.46 is the credit slip for Rs.600/-. Ex.P.47 is the debit slip for Rs.600/-. It bears the signature of first defendant which is marked at Ex.P.47(a). Ex.P.48 is also the debit slip for 44 O.S.No.5550/1987 Rs.183.25. Ex.P.48(a) is the signature of defendant no.1. Ex.P.49 is the debit slip for Rs.70/-. The recitals of Ex.P.47 & 49 discloses that the amount stated in the said debit slips was drawn by the defendant no.1.
35. The version of PW.1 coupled with the averments made in para-28 & 29 of the plaint and the recitals of Exs.P.50 to 53 discloses that one K.Bhajandas was the constituent of the plaintiff bank. Ex.P.50 is the branch advice for Rs.35,875/-. Ex.P.51 is the credit slip for Rs.35,875/-. Ex.P.52 & 53 are the debit slips for Rs.375/- and Rs.500/- drawn by defendant no.1. The said documents bears the signatures of first defendant and the said account was closed by defendant no.1 and remitted to S.L.Suspense account, Head Office, amounting to Rs.35,000/-. Thus, the defendant no.1 has misappropriated balance amount of Rs.875/-.
36. The version of PW.1 in his chief examination para-31 to 33 coupled with the averments made in para- 30 to 33 of the plaint and the recitals of Exs.P.54 to 58 45 O.S.No.5550/1987 discloses that one M.N.Bhandarkar was the constituent of the plaintiff bank and he died leaving a Will dated 13.3.1960 making certain dispositions and in the course of administration of his estate, the defendant no.1 representing the plaintiff bank, drawn sum of Rs.4,000/- under Ex.P.54 debit slip. Ex.P.55 is the originating advice for Rs.336.50. Ex.P.56 is the credit slip for Rs.336.50. Ex.P.57 is the debit slip for Rs.336.50 drawn by defendant no.1 and Ex.P.58 is the debit slip for Rs.1,646/- drawn by the defendant no.1. Exs.P.54 to P.58 bears the signatures of first defendant. The version of PW.1 discloses that without paying the said amounts to the constituent, the first defendant has misappropriated the same.
37. The recitals of para-34 & 35 of the plaint averments coupled with the chief examination version of PW.1 at para-35 to 39 and the recitals of Ex.P.59 to P.82 discloses that one K.P.Kini was the constituent of the plaintiff bank. He died on 21.6.1979 leaving a Will dated 46 O.S.No.5550/1987 17.10.1978 appointing the plaintiff bank as executor. The recitals of Ex.P.59 to P.82 discloses that cheque for Rs.6870/-, cheque for Rs.170/-, Rs. 412/-, Rs.3800/, 8500/-, 3200/-, Rs.3000/-, Rs.1500/-, Rs.59.50, Rs.5,626/-, Rs.6,000/-, Rs.25/-, Rs.2,000/-, Rs.8600/-, Rs.1525/-, Rs.500/-, branch advice for Rs.4638.40, credit slip for Rs.4,638.40, branch advice for 4638.40, credit slip for Rs.4,638.13, cheque forRs.4,138.13, cheque for Rs.514/- and cheque for Rs.6,000/- have been drawn by the first defendant and misappropriated the sum Rs.60,165.63.
38. In para-40 of the plaint as well as page-1 of further chief examination of PW.1 dated 1.10.2002, the plaintiff bank has alleged that the defendant no.1 has misappropriated sum Rs.855/-, but no corroborating documents are produced to substantiate the same. The version of PW.1 in his further chief examination dated 1.12.2002 coupled with the averments made in para-41 to 43 of the plaint and the recitals of Exs.P.83, P.84, 47 O.S.No.5550/1987 180, 181, 183 to 193 discloses that the credit slip for Rs.6,323/- and debit slip for Rs.3,481/- and debit slip for Rs.2,000/- bank draft for Rs.6,231/- and demand draft for Rs.7,137.57, mail transfer advice for Rs.7,137.57, debit slip for Rs.10,251.60, credit slip for the same amount, bank advice for the same amount, another credit slip for the same amount, debit slip for Rs.6,481/-, credit slip for the same amount, bank advice for the same amount and credit slip for the same amount. The version of PW.1 clearly discloses that the first defendant withdrawn the sum of Rs.6,481/- on three occasions making it to appear that two of the payments have been made to Mrs.Roopavathi and one amount to Mr.Ponnappa and misappropriated the said estate account amounting to Rs.6,231/-. The version of PW.1 in his further chief examination at page-3 para-5 to 9 sub-para 44 to 48 coupled with the recitals of Ex.P.85 to 110 and 194 to 199 discloses that one Sorab R.Botliboi was one of the constituents of plaintiff bank, 48 O.S.No.5550/1987 the first defendant drawn the sum of Rs.1,116.50 and Rs.2,327.06, Rs.5607.36, Rs.4,000/-, Rs.9,000/- and Rs.12,000/- by way of debit slip and sum of Rs.10,095/- by means of originating advice and debit slip for Rs.5,000/-, Rs.603.25, Rs.1,600/-, Rs.3,000/-, Rs.100/- Rs.450/- cheque for Rs.6610/-, debit slip for Rs.2,000/- cheque for Rs.14,000/-, debt slip for Rs.5,000/-, Rs.421.50, Rs.98/-, Rs.500/-, Rs.328/-, Rs.72/-, Rs.100/-, Rs.266/-, Rs.38/-, Rs.2,000/-, Rs.10,000/-, by way of debit slips, Rs.5,000/-, Rs.5,403.25 by way of credit slip and branch advice. Ex.P.199 is the letter by the defendant no.1 to the Director, UNICEF, New Delhi, stating the remittance of Rs.10,000/- to the said institution. No doubt, in the cross-examination a suggestion is made to PW.1 that no amount was misappropriated pertaining to the S.R.Batliboi. But, he has denied the same. The aforesaid documentary evidence clearly discloses that the first defendant drawn the amounts stated in the aforesaid documents and 49 O.S.No.5550/1987 failed to furnish the account for the said amounts and thus he has misappropriated a sum Rs.84,422.16.
39. The further chief examination version of PW.1 at para-10 to 13 sub-para 49 to 52 coupled with the recitals of Ex.P.111 to 123 and para-49 to 52 of the plaint averments discloses that one deceased Fredrick Johnson was the constituent of the plaintiff bank. The defendant no.1 had drawn sum Rs.1,968/- , Rs.5,200/-, Rs.41.11, Rs.100/-, Rs.11.61, Rs.32/-, Rs.250/-, Rs.100/-, Rs.74.91, Rs.16.29, Rs.62.57, Rs.102.93, Rs.80.18, by way of debit slips. In the cross-examination of Pw.1, he has stated that he does not know whether there is any claim against the bank in respect of all other claims including the present constituent Fredrick Johnson. But, it is a fact that Fredrick Johnson was the constituent of the plaintiff bank. He had faith on the bank and the first defendant being the employee of the plaintiff bank, has failed to account for the amounts stated in Exs.P.111 to P.123. The version of PW.1 50 O.S.No.5550/1987 coupled with the recitals of the aforesaid documents disclose that the first defendant has misappropriated the amount pertaining to the constituent Fredrick Johnson to the tune of Rs.8,029.02.
40. The recitals of para-53 of the plaint coupled with the further chief examination of PW.1 at para-14 sub-para 53 and the recitals of Ex.P.124 discloses that the deceased Diwakar Amrit was the constituent of the plaintiff bank. The first defendant withdrew sum of Rs.4,200/- by way of a cheque from out of the funds in the said estate and failed to account for the same and misappropriated the said amount.
41. The recitals of Para-54 of the plaint averments coupled with the further chief examination of Para-15 to 21 sub para-54 to 60 coupled with the recitals of Exs.P.125 to P.127, P.204 to P.207 discloses that Smt.M.V.Ratna w/o late V.S.Ratna was one of the constituent of the plaintiff bank. On the death of her husband, she sought the assistance of the plaintiff bank 51 O.S.No.5550/1987 to obtain a Succession Certificate from the court in respect of her husband's life insurance policies and the plaintiff bank agreed to give such assistance and she provided funds on different occasions aggregating to Rs.1,350/- for meeting the expenses of obtaining Succession Certificate and said amounts were credited to the S.A.S.D. Account and out of the funds provided by her, and out of the insurance policy amounts realized in her account, defendant no.1 had withdrawn by way of debit slip for Rs.500/-, Rs.1,200/-, Rs.195.64, and by way of credit slips for Rs.350/-, Rs.500/-, H.O. advise slip for Rs.19,002.21 and credit slip for the same amount. "Thus, in all the first defendant misappropriated Rs.1,913.14.
42. The averments of the plaint at para-61 coupled with further chief examination of PW.1 at para-22 sub para 61 & 62 coupled with the recitals of Ex.P.128 to P.132 discloses that deceased K.K.Kamath was the constituent of the plaintiff bank and he had a Fixed 52 O.S.No.5550/1987 deposit in Banashankar II stage branch of plaintiff bank and it was closed before maturity on the instruction of the first defendant as per letter dated 10.5.1979 and sum of Rs.19,630.85 was remitted to the plaintiff bank's E.T.T. section and it was credited to the S.B.Account no.17055 of Town hall branch, Bangalore and said account did not pertain to the estate of K.K.Kamath, but related to one P.K.Thyagarajan and the first defendant out of the said amount so credited, withdrawn sum of Rs.4,000/- by way of Ex.P.131 cheque. Again Rs.10,130.85 by way of Ex.P.132 cheque and failed to account for the said amount and thus, misappropriated Rs.14,130.85.
43. The averments of the plaint at para-63 to 65 coupled with the further chief examination of PW.1 at para-24 to 26 sub para 63 to 65 coupled with the recitals of Ex.P.133 to P.151 disclose that one deceased Smt.Kalyani @ Sundari Bai was the constituent of the plaintiff bank. The defendant no.1 by way of cheque and 53 O.S.No.5550/1987 debit slips withdrew in all Rs.1,86,114/- from the said estate account and failed to account for the said amount and thus, misappropriated Rs.1,86,114/-.
44. The averments of the plaint at para-66 coupled with the further chief examination of PW.1 at para-27 and the recitals of Ex.P.152 to P.154, P.212 to P.224 further disclose that one deceased Dr.A.S.Venkatachalam was the constituent of the plaintiff bank. The first defendant withdrew Rs.93,184.69 by way of cheque and debit slips. No doubt, the plaintiff bank has alleged that the first defendant has misappropriated Rs.1,44,535.29. But, the recitals of Exs.P.153, 154, P.212 to 224 reveals that the first defendant withdrew Rs.93,184.69. Since no documents are produced for alleged misappropriation of Rs.1,44,535.29 by the first defendant, hence it is just and proper to hold that the first defendant has misappropriated Rs.93,184.69 from the estate account of deceased Dr.A.S.Venkatachalam.
54 O.S.No.5550/1987
45. The averments of the plaint at para-67 to 70 coupled with the further chief examination of PW.1 at para-28 to 31 sub para 67 to 70 and the recitals of Ex.P.156 to 158 and Ex.P.226 & P.227 further disclose that one deceased C.S.Shah was the constituent of the plaintiff bank. The recitals of the plaint averments coupled with the version of PW.1 discloses that out of the funds at the credit of the estate of deceased C.S.Shah, the first defendant withdrew a sum of Rs.10,000/- stated in Ex.P.156 and out of the proceeds of the said cheque, first defendant purchased Ex.P.157 DD in favour of one Smt.Ramani Kamath who is not a beneficiary under the Will of deceased C.S.Shah. Ex.P.227 i.e., letter written by the son of constituent deceased C.S.Shah discloses that he has not received any remittance from the subject estate of C.S.Shah. The plaint averments disclose that the first defendant drawn Rs.75,000/- on 15.4.1980 by way of cheque no.780165 drawn on S.B.Account bearing no.21992 and the proceeds of the said cheque were 55 O.S.No.5550/1987 credited to the Bank of Madhura in the name of the plaintiff's bank ETT section account, Bravo Plastics unauthorizedly and the defendant no.1 has withdrawn the said amount between 15.4.1980 and 24.10.1980, which is authorized by defendant no.2. No doubt, the bank has not produced any documents to substantiate the said contention. But, after thorough investigation by the competent auditors of the plaintiff bank, said lapses on the part of defendant nos.1 & 2 has been brought to light. Therefore, mere non-production of any books of accounts pertaining to the misappropriation of said sum of Rs.75,000/- is not a ground to disbelieve the contentions taken in the plaint.
46. The averments of plaint at para-71 to 89 coupled with the further chief examination of PW.1 at para-18 sub-para 71 & 72 coupled with the recitals of Exs.P.159 to 242 discloses that one Smt.Ratnabai was constituent of plaintiff bank. The defendant no.1 by way of cheques and debit slips misappropriated 56 O.S.No.5550/1987 Rs.1,93,090.26 and the 2nd defendant has misappropriated Rs.8,700/- pertaining to the said constituent Smt.Ratnabai.
47. The plaint averments at para-93 coupled with the recitals of Ex.P.245 to 280 further discloses that the defendant nos.1 & 2 withdrew the amount by way of debit slips and caused misappropriation to the tune of Rs.5,86,503.15- Rs.51,350.60=5,35,152.55.
48. The learned Counsel appearing for defendant no.1 contended that the alleged misappropriation were known to the plaintiff bank in the year 1982 and the plaintiff bank cannot file a suit in the year 1987 which is barred by limitation. While discussing the issue on limitation, this court has clearly held that the present suit is not barred by limitation. Hence, the said contention of defendant no.1 holds no water. The learned Counsel for the first defendant drew the attention of this court to the cross-examination of PW.1 at page-57 & 58 and argued that in his cross-examination in the 57 O.S.No.5550/1987 said pages, PW.1 stated that he cannot say whether there was any demand by any 3rd person and whether no liability is shown in the books of accounts of the plaintiff and it is the same regarding item nos.2 to 18. There are 18 items claimed in the plaint and further argued that the evidence does not show whether regarding those 18 separate claims are made and whether the plaintiff acknowledges the said liability. Further, it is not the case of the plaintiff that they have paid any amount to the third parties. Hence, the claim made by the plaintiff on behalf of third party and hence, has no locus standi and further argued that at page-58 & 59, the same thing is confirmed that no one has put forth any claim and further argued that regarding Exs.P.72 to P.75, those relates to cheques issued in favour of Vedavyasachar. The said Vedaavyasachar has not made any claim. In his cross-examination at page-69, 94 & 95, PW.1 has stated that the bank has not suffered any loss. It is pertinent to note that the misappropriation committed by defendant 58 O.S.No.5550/1987 nos.1 & 2 that amount belongs to the constituents of the plaintiff bank. It is clear that under the Indian Trust Act, the constituents reposed confidence on the bank and said amount misappropriated by the defendant nos.1 &
2. Therefore, the plaintiff bank is liable to pay the said amount to the said constituents. Under these circumstances, merely because the said constituents have not claimed amounts from the plaintiff bank, itself is not a ground to come to a conclusion that the defendant nos.1 & 2 are not liable for the misappropriation of the amounts.
49. The learned Counsel appearing for the 2nd defendant contended that mere marking of documents is not sufficient. The plaintiff bank has failed to examine the authors of various exhibits. Hence, said documents and the evidence of PW.1 have no evidentiary value. In support of his contention, he has relied on a decision reported in (1972)4 SCC 562 and (2003)8 SCC 745. It is 59 O.S.No.5550/1987 pertinent to note that PW.1 who worked as a Senior Manager of plaintiff bank - a responsible Officer. On oath he has stated regarding the misappropriation made by defendant nos.1 & 2 and produced several documents such as cheques, debit slips to substantiate the misappropriation made by defendant nos.1 & 2. Under these circumstances, the non-examination of the author of said documents is not fatal. More so, when the plaintiff bank is a nationalized bank which maintained all documents in its day to day course of business. Therefore, the ratios laid down in the aforesaid decisions of the Hon'ble Apex Court are not applicable to the facts of the case on hand. The learned Counsel appearing for the 2nd defendant contended that PW.1 & 2 have not conducted any enquiry and have not submitted any report and there is no allegation against the defendant nos.1 & 2 have taken away any documents and destroyed the documents. It is further contended that the plaintiff bank has not produced any books of accounts with 60 O.S.No.5550/1987 regard to every account in ETT section and the subsidy ledger maintained for each constituent and it was the duty of the plaintiff bank which is the custodian of the said account and ledger books without which it cannot be said that the withdrawals as alleged by the plaintiff bank were wrongly made. It is pertinent to note that PW.1 & 2 on oath have stated regarding the misappropriation made by defendant nos.1 & 2 by producing umpteen number of documents like debit slips, cheques etc. Under these circumstances, the non- production of ledge and account books by the plaintiff is not fatal to the case of the plaintiff bank. The learned Counsel appearing for the defendant no.2 has relied on a decision reported in AIR 1941 Privy Council 93, wherein the Hon'ble Apex Court has held as under:
"Fraud like any other charge of a criminal offence whether made in civil or criminal proceedings, must be established beyond reasonable doubt. A finding as to fraud cannot be based on suspicion and conjuncture."61 O.S.No.5550/1987
50. In the instant case, the plaintiff bank has produced umpteen number of documents got marked through its witness and the version of PW.1 & 2 clearly discloses the misappropriation made by defendant nos.1 & 2. Under these circumstances, the ratio laid down in the aforesaid decision of the Hon'ble Privy Council is not applicable to the facts of the case on hand.
51. The learned Counsel appearing for the plaintiff bank has relied on a decision reported in AIR 1986 SC 1099. At head note-B of the said decision, the Hon'ble Apex Court has held as under:
"Evidence Act - Sec.4, 114, 101 - presumption - what is - presumption rebuttable - Effect of -It indicates the person on whom the burden of proof lies. The presumption is not in itself evidence but only makes a prima facie case for a party in whose favour it exists. It is a rule concerning evidence. It indicates the person on whom the burden of proof lies. When presumption is conclusive, it obviates the production of any other evidence to dislodge the conclusion to be drawn on proof of certain facts. But when it is rebuttable it only points out the party on whom lies the duty of going forward with evidence on the fact presumed, and when that party has produced evidence fairly and reasonably tending to show that the real fact 62 O.S.No.5550/1987 is not as presumed the purpose of presumption is over. Then the evidence will determine the true nature of the fact to be established. The rules of presumption are deduced from enlightened human knowledge and experience and are drawn from the connection, relation and coincidence of facts and circumstances."
In the instant case, the defendant nos.1 & 2 being the employees of the plaintiff bank during their service have misappropriated the amount. That is clear from the documents produced by the plaintiff bank. Thus, the aforesaid ratio is fairly applicable to the facts of the case on hand.
52. The learned Counsel appearing for plaintiff has relied on another decision reported in AIR 2011 SC 1931 and argued that merely because the criminal court acquitted the defendant on the ground of benefit of doubt, it cannot be held that the defendant nos.1 & 2 have not misappropriated the amounts. The learned Counsel appearing for the defendant no.2 has got marked Ex.D.16 i.e., certified copy of the Judgment in CC no.425/1986 of the learned XVII Addl. Chief Metropolitan 63 O.S.No.5550/1987 Magistrate, Bangalore and also produced the certified copy of the Judgment dated 10.8.2010 in CC no.239/1986 of the very same court and certified copy of the order sheet in CC no.238/1986 and certified copy of the deposition of PW.4 & PW.27 in CC no.54/1990 and certified copy of the deposition of PW.1 to 14 in CC no.425/1986 at Ex.P.16 to 21. At para-9 of the Judgment relied by the learned Counsel appearing for the plaintiff, the Hon'ble Apex Court has held as under:
"The fact that the criminal court subsequently acquitted the respondent by giving him the benefit of doubt, will not in any way render a completed disciplinary proceedings invalid or affect the affect the validity of the finding of guilt or consequential punishment. The standard of proof required in criminal proceedings being different from the standard of proof required in departmental enquiries. The same charges and evidence may lead to different results in the two proceedings i.e., finding of guilt in departmental proceedings and acquittal by giving benefit of doubt in the criminal proceedings. This is more so, when the departmental proceedings are more proximate to the incident, in point of time, when compared to the criminal proceedings. A finding by the criminal court will have no effect on previously concluded domestic enquiry. An employee who allows the findings in the enquiry and the punishment by the Disciplinary Authority to attain finality 64 O.S.No.5550/1987 by non-challenge, cannot after several years challenge the decision on the ground that subsequently the criminal court has acquitted him. "
53. In the instant case, the documentary evidence produced by the plaintiff bank clearly discloses that the defendant nos.1 & 2 misappropriated the amount. Hence, the findings of the criminal court that the said accused are acquitted by giving benefit of doubt itself is not a ground to come to a conclusion that they have not misappropriated the amount.
54. The learned Counsel appearing for the plaintiff has relied on another decision reported in AIR 1971 SC 1244. At para-4 of the said decision Hon'ble Apex Court has held as under:
"It is a well settled principle of law that the decision of the civil courts are binding on the criminal courts. The converse is not true."
In the light of the aforesaid observation made by the Hon'ble Apex Court, the findings of the criminal court are not binding on this court.
65 O.S.No.5550/1987
55. The learned Counsel appearing for the plaintiff has relied on a decision reported in (1996) 9 SCC 69. At page 73 para-7, the Hon'ble Apex Court has held as under:
True, it is that in some cases, no loss has resulted from such acts. It is also true that in some other instances such acts have yielded profit to the bank. But, it is equally true that in some other instances, the funds of the Bank have been placed in jeopardy; the advances have become sticky and irrecoverable. It is not a single act; it is a course of action spreading over sufficiently long period and involving large number of transactions. In the case of a bank-for the matter, in the case of any other organization- every officer/employee is supposed to act within the limits of his authority. If each officer/employee is allowed to act beyond his authority, the discipline of the bank/organization will disappear; the functioning of the bank would become chaotic and unmanageable. Each officer of the bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organization, more particularly, a bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority- that too a course of conduct spread over a sufficiently long period and involving innumerable instances - is by itself a 66 O.S.No.5550/1987 misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of the banks which deal with public funds."
56. He has relied on another decision reported in AIR 2005 SC 3272 at page-3275, para-15, the Hon'ble Apex Court has held :
"A Bank Officer is required to exercise higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every Officer/employee of the Bank is required to take all possible steps to protect the interests of the Bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a Bank officer. Good conduct and discipline are inseparable from the functioning of every officer/employee of the Bank. As was observed by this Court in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik (1996)(9) SCC 69, it is no defence available to say that there was no loss or profit resulted in case, when the officer/employee acted without authority. The very discipline of an organization more particularly a Bank is dependent upon each of its officers and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and is misconduct. The charges against the employee were not casual in nature and were serious. That being so, the plea about absence of loss is also sans substance."67 O.S.No.5550/1987
57. He has relied on another decision reported in (2008)8 SCC 92, at page-115 para-41, the Hon'ble Apex Court has held as under:
"At the relevant point of time the respondent was functioning as a Branch Manager. A bank survives on the trust of its clientele and constituents. The position of the Manager of a bank is a matter of great trust. The employees of the bank in particular the Manager are expected of the absolute integrity and honesty in handling the funds of the customers/borrowers of the bank. Any misappropriation, even temporary, of the funds of the bank or its customers/borrowers constitutes a serious misconduct, inviting severe punishment. When a borrower makes any payment towards a loan, the Manager of the bank receiving such amount is required to credit it immediately to the borrower's account. If the matter is to be viewed lightly or leniently it will encourage other bank employees to indulge in such activities thereby undermining the entire banking system. The request for reducing the punishment is misconceived and rejected."
In the light of the aforesaid observation of the Hon'ble Apex Court in the aforesaid decisions, in my opinion, the defendant nos.1 & 2 being the responsible officers of the plaintiff bank during the relevant period, have 68 O.S.No.5550/1987 misappropriated the amounts of the constituents. That is clear from the documents produced by the plaintiff bank.
58. The first defendant has not entered into the witness box to controvert the averments made in the plaint and the recitals of the documents produced by the plaintiff bank. The 2nd defendant himself examined as DW.1 and through him Ex.D.2 to D.34 documents came to be marked. According to him, he was not having any supervisory authority over the first defendant. The first defendant acted independently and the 2nd defendant cannot be made liable. In his cross-examination, at page- 5 DW.1 has clearly admitted that he was the Superintendent of ETT Section during the relevant period. He has also admitted that during that period, he was looking after the files assigned to him and he was also assigned the duty to guide the other officers whenever they sought guidance in discharge of duties assigned to them and in his cross-examination at page-6 para-5 he has further stated that the first defendant was 69 O.S.No.5550/1987 serving his duties below the superintendent and he was discharging his duties. In his cross-examination at page- 8, para-6, he has further admitted that ETT section was separately ear marked. In his cross-examination at page- 10 para-8 he has further admitted that the plaintiff bank had noticed certain fraudulent transactions in respect of 18 accounts mentioned in the plaint and also gratuity account. In his cross-examination PW.1 has identified the signature of first defendant on several documents i.e., debit slips, cheques, credit slips which were marked at 'P' series. The 2nd defendant being responsible officer, cannot shirk the liability on the first defendant. He, at the relevant point of time, was supervising the functioning of the first defendant is equally liable for the misappropriation made to the constituents of the plaintiff bank and gratuity fund account. In view of my foregoing discussion, this court is of the opinion that the plaintiff bank has established that the defendants have committed fraud and misappropriation as stated in para- 70 O.S.No.5550/1987 7 to 93 of the plaint and also misappropriated Rs.5,35,152.55 i.e., after deducting the amount of Rs.51,350.60 as discussed earlier in para-44 of the judgment. However, the plaintiff bank has not produced any documents to show that the defendant nos.1 & 2 have committed misappropriation amounting to Rs.8,972.36 from the bank as stated in Issue no.5. Therefore the plaintiff bank has failed to prove that the defendant nos.1 & 2 have misappropriated a sum of Rs.8,972.36 from the plaintiff bank. Accordingly I answer Issue nos.3 & 4 in the affirmative, Issue no.5 in the negative and Issue no.6 partly in the affirmative.
59. Issue no.7 : The documents produced by the plaintiff bank i.e., Exs.P.1 to P.280 reveals that the total amount misappropriated by the defendant nos.1 & 2 with respect to the constituents of the bank which is as follows:
Mrs. A.S.Kantamani Ammal - Rs. 450.00 Mrs. Rukmini - Rs. 62,484.04 T.L.Ramachar - 35,088.27 K.R.K.Bhat - 1,952.22 71 O.S.No.5550/1987 K.Bhajandas - 875.00 Bhandarkar - 5,982.52 K.P.Kini - 60,165.63 K.S.P.Shanbhogue - 855.00 Poornashashi Chaudhey - 6, 231.00 S.R.Batliboi - 84,422.16 Fredrick Johnson - 8,029.02 Diwakar Amrit - 4,200.00 V.S.Ratna - 1,913.14 K.K.Kamath - 14,130.85 Smt.Kalyani @ Sundari bai - 1,86,114.00 Dr.A.S.Venkatachalam Rs.1,44,535.29-51,350.60 - 93,184.69 C.S.Shah - 75,000.00 Smt.Rathnabai - 2,01,790.00 Total Amount Rs.8,42,867.40 As per the plaint averments and Exs.P.1 to P.280, the amount misappropriated by the defendant nos.1 & 2 towards canara Bank gratuity fund account, is as follows:
Debit slip - 105.60 Debit slip - 65.50 Debit slip - 95.00 Debit slip - 77.50 Debit slip - 97.00 Debit slip - 78.00 Debit slip - 65.00 Debit slip - 96.00 Debit slip - 40.00 Debit slip - 18.00 Debit slip - 18.00 Debit slip - 870.00 Debit slip - 719.00 Debit slip - 340.00 Debit slip - 250.00 72 O.S.No.5550/1987 Debit slip - 200.00 Debit slip - 665.00 Debit slip -2000.00 Debit slip - 166.00 Debit slip -3913.00 Debit slip -1672.75 Debit slip - 95.00 Debit slip - 302.00 Debit slip - 225.00 Debit slip - 28.50 Debit slip - 2036.25 Debit slip - 1000.00 Debit slip - 550.00 Debit slip - 550.00 Debit slip - 823.00 Debit slip - 456.00 Debit slip - 462.00 Debit slip - 345.00 Debit slip - 252.00 Debit slip - 88.41 Total Amount - Rs.18,764.51 Thus, the plaintiff bank is entitled for a sum of Rs.8,61,631.91. In respect of the remaining amount claimed by the plaintiff bank, the plaintiff bank has not produced any material such as books of accounts, debit slips etc., to fasten the liability on the defendant nos.1 & 2 to show that they have misappropriated the amount of the plaintiff bank. Under these circumstances, the 73 O.S.No.5550/1987 plaintiff bank is entitled for recovery of Rs.8,61,631.91 instead of 13,52,285.99 as prayed.
60. The plaintiff bank has claimed in the prayer column of the plaint interest at the rate of 16.5% p.a. Undisputedly the interest claimed by the plaintiff bank is not a contractual rate of interest. The learned Counsel appearing for the defendant no.1 drew the attention of this court to the cross-examination of PW.1 at pages 47 & 48. In the said para, PW.1 has stated that he does not remember whether there are any circulars to the effect that interest should be payable in case of embezzlement and he further stated that he does not know whether there is any contract in existence or not that an employee should pay interest on the amount alleged to have been misappropriated during the tenure of his service. At page-48, he has further stated that he does not know on what basis the said interest is claimed. Sec.34 of the CPC, deals with awarding interest in case of decree for payment of money. The embezzlement of the amount 74 O.S.No.5550/1987 commences from 1979. Considering the length of period of embezzlement and the long pending litigation, it is just and proper to award interest at the rate of 6% p.a., from the date of the suit till realization. Accordingly I answer Issue no.7 partly in the affirmative.
61.Issue no.8 : According to the defendants, Canara Bank Employees Gratuity Fund is a trust constituted under a trust deed and it is a separate legal entity. The said fund as per the said trust deed, is the sole responsibility of the trustees. The trustees of the said trust have not joined as one of the plaintiffs and are neither made as defendants in this suit. The trust had commissioned enquiry by the chartered accountants and the chartered accountants submitted their report to the trust and not to the plaintiff bank. Thus, the bone of contention of the defendant nos.1 & 2 is that the trust being a separate legal entity and it being not a plaintiff in this suit, the plaintiff bank has no locus standi to claim any amount on the account of the said trust deed. As 75 O.S.No.5550/1987 against the said argument, the learned Counsel appearing for the plaintiff contended that ETT section is not a separate entity. Gratuity fund established for the benefit of the employees. ETT section of a bank handling the gratuity funds, but lawful custodian is plaintiff bank. Hence, the contention of the plaintiff bank is that the suit is maintainable.
62. Ex.D.4 is the deed of trust. It contains the rules and regulations governing the Canara bank employees gratuity fund. DW.1 i.e., defendant no.2 in his cross- examination at para-2 & 3 has stated as under:
"It is true that Canara bank apart from banking use to offer services of executorship and trusteeship of its constituents. It is true that these duties are performed by a separate section of the bank called Executor, Trustee and Taxation Section. It is true that subsequently the section was divided into executor and trustee section called E & T section."
At page-8 para-6 he has stated that "it is true that during that time Canara bank employees gratuity fund account was also being managed by the ETT section. He has further stated that it is true that the ETT section 76 O.S.No.5550/1987 separately ear marked. In his cross-examination at page- 10 para-8 & page-11 para-9, he has further stated that "it is true that the expenditure on each of the account has to be properly accounted by the ETT Section. It is true that apart from incurring expenditure for administration of this account, ETT section also pays moneys' to beneficiaries and maintain account of the same. It is true that because of the fraud detected in ETT section, the plaintiff bank initiated disciplinary action." Thus, the above said version of DW.1 and the recitals of Ex.D.4 is clear that the ETT section is a part of the plaintiff bank. But the lawful custodian of the funds of constituents is the plaintiff bank. The plaintiff bank being the custodian of the funds, ETT section is one wing of the plaintiff bank. The argument advanced by the learned Counsel appearing for the defendant that ETT section is an independent authority holds no water. Keeping faith on the plaintiff bank, its constituents made transactions. The 77 O.S.No.5550/1987 establishment of ETT section is the internal arrangement of the plaintiff bank for their smooth administration. But the overall supervision pertaining to the funds of its constituents is by the plaintiff bank only. Under these circumstances, the ETT section cannot be considered as an independent authority. Hence, the argument advanced by the learned Counsel appearing for the defendants that the suit is not maintainable as ETT section is an independent authority holds no water. Accordingly I answer Issue no.8 in the negative.
63.Issue no.9 : The contention of the defendant nos.1 & 2 that they have been dismissed from the service illegally. On careful perusal of Ex.D.5, the order of the Hon'ble High Court of Karnataka in W.P.1428/1988, the Hon'ble High Court of Karnataka has passed an order to pay compensation in lieu of reinstatement and that order has been challenged by the 2nd defendant in Ex.D.6 Writ petition no.20636/2005 and the Hon'ble High Court of Karnataka has granted gratuity less 10% of the total 78 O.S.No.5550/1987 amount payable or Rs.20,000/- whichever is less and also granted pension if the 2nd defendant is a pension optee or in the alternative to pay the provident fund as under the scheme and if he has made any contribution. But, the present suit is filed by the plaintiff bank for recovery of misappropriated amount by the defendant nos.1 & 2 based on the documents produced by the plaintiff bank. The dismissal of the defendant nos.1 & 2 is no doubt based on the misappropriation of funds made by them. This is a civil proceedings. By paying the court fee the plaintiff bank is seeking recovery of misappropriated amount. The authority of this court is only to recover the misappropriated amount. This court has no power to encroach upon its jurisdiction and pass an order that the dismissal is illegal in view of pendency of the suit. Merely because there is an averment made by the defendants to that effect. Hence, I answer the Issue no.9 in the negative.
79 O.S.No.5550/1987
64. Issue no.10: In para-102 of the written statement of first defendant and in para-14 of the written statement of 2nd defendant, they have contended that there is no cause of action to file the present suit. The plaintiff bank has produced numerous documents such as Ex.D.9 inspection report. Ex.D15 i.e., report of the chartered accountants PWs.1 & 2 have deposed regarding the misappropriation made by defendant nos.1 & 2 and also produced Exs.P.1 to P.280 documents to show that the defendant nos.1 & 2 have misappropriated the funds pertaining to the constituents of the plaintiff bank and also pertaining to the canara bank employees gratuity fund account. Under these circumstances, the contention of the defendant nos.1 & 2 that there is no cause of action to file the present suit holds no water. Accordingly I answer Issue no.10 in the negative.
65. Issue no.11: In view of my foregoing discussion on Issue no.1 to 10 and additional issue, the plaintiff 80 O.S.No.5550/1987 bank is entitled for the relief in part. Accordingly I answer this issue in the partly affirmative.
66. Issue no.12 : In the result, I proceed to pass the following:
ORDER The suit of the plaintiff bank is partly decreed with costs.
The defendant nos.1 & 2 jointly and severally shall pay a sum of Rs.8,61,631.91 (i.e., after deducting the amount of Rs.51,350.60 as discussed in Issue no.6) With future interest at the rate of 6% p.a., from the date of the suit till realization.
Draw decree accordingly.
(Dictated to the JW on mobile phone voice recorder/on line, typed by her, corrected and then pronounced by me in open Court on this the 25th day of August, 2015).
(RAVI M.NAIK), I Addl.City Civil & Sessions Judge, Bangalore.81 O.S.No.5550/1987
ANNEXURE LIST OF WITNESSES EXAMINED FOR PLAINTIFF PW.1 N.Ramaswamy PW.2 B.S.Shankarnarayanan LIST OF DOCUMENTS MARKED FOR PLAINTIFF Exs.P-1 Letter dated 1.5.1975 " P-2 Letter " P-3 Debit slip dated 13.1.1979 " P-3(a) & (b) Signatures " P-4 Letter " P-5 Will dated 28.11.1974 " P-6 Branch Advice for opening account Amount Rs.1,10,115.82 " P-7 & 8 Debit slips " P-9 to 19 Cheques " P-20 Rs.700/- recredited in cash by defendant no.1 " P-21 Pay slip " P-22 Debit slip " P-23 Letter by Lokkur & Company " P-24 to 31 Cheques " P-32 to 36 Debit slips " P-37 & 38 Cheques " P-39 Debit slip " P-40 Cheque " P-41 to 43 Debit slips " P-44 Letter from defendant no.1 " P-45 Originating advice " P-46 Credit slip " P-47 to 49 Debit slips " P-50 Power of attorney dated 28.1.1976 " P-51 Credit slip " P-52 to 54 Debit slips " P-55 Originating advice " P-56 Credit slip " P-57 & 58 Debit slips 82 O.S.No.5550/1987 " P-59 to 75 Cheques " P-76 Branch advice " P-77 Credit slip " P-78 Branch advice " P-79 Credit slip " P-80 to 82 Cheques " P-83 Credit slip " P-84 to 90 Debit slips " P-91 Originating advice " P-92 to 97 Debit slips " P-98 & 99 Cheques " P-100 Debit slip " P-101 Cheque " P-102 to 127 Debit slips " P-128 & 129 Branch advices " P-130 Debut skuo " P-131 to 136 Cheques " P-137 Debit slip " P-138 to 148 Cheques " P-149 to 151 Debit slips " P-152 KFC letter " P-153 & 154 Debit slips " P-155 Probate " P-156 Cheque " P-157 Demand draft " P-158 Bank statement " P-159 Letter for sale proceeds of Kirloskar Oil Engines " P-160 & 61 Cheques " P-162 Bank statement " P-163 Debit slip " P-164 Letter for debiting Rs.30,000/-
" P-165 Debit slip " P-166 to 179 Cheques " P-180 & 181 Debit slips " P-182 " P-183 Bankers draft " P-184 Demand draft " P-185 Mail transfer advice " P-186 Debit slip " P-187 Credit slip 83 O.S.No.5550/1987 " P-188 Bank advice " P-189 Credit slip " P-190 Debit slip " P-191 Credit slip " P-192 Bank advice " P-193 Credit slip " P-194 & 195 Debit slips " P-196 & 197 Credit slips " P-198 Branch advice " P-199 Letter from defendant no.1 " P-200 Probate of S.R.Batliboi " P-201 Letter addressed to Sr.Manager " P-202 Probate " P-203 SASD Suspense A/c " P-204 & 205 Credit slips " P-206 H.O. Advice " P-207 Credit slip " P-208 Branch Advice " P-209 Original Will dated 3.5.1978 " P-210 Letter from KFC " P-211 Letter from KFC " P-212 & 213 Debit slips " P-214 Branch advice " P-215 Cheque " P-216 Bank advice " P-217 Credit slip " P-218 Mail transfer advice " P-219 Credit slip " P-220 Branch advice " P-221 to 224 Debit slips " P-225 Probate " P-226 DD Challan " P-227 Letter from Arvindh C.Shah " P-228 to 237 Cheques " P-238 Debit slip " P-239 Cheque " P-240 to 242 Transfer slips " P-243 Probate " P-244 Will of Smt.Hattikudur Ratna Bai " P-245 Deed of Trust and rules and regulations " P-246 to 272 Debit slips 84 O.S.No.5550/1987 " P-273 & 274 Receipts " P-275 to 280 Debit slips
LIST OF WITNESSES EXAMINED FOR DEFENDANTS DW.1 Y.K.Raghavendra Rao LIST OF DOCUMENTS MARKED FOR DEFENDANTS Exs.D-1 to D.4 Letters " D-4 Deed of Trust " D-5 Copy of Order in W.P.1428/1988 " D-6 Copy of order in W.P.20636/2005 " D-7 & 8 Letters " D-9 Inspection report " D- 10 Xerox copy of circular 11/1988 " D-11 Circular letter " D-12 Stencil copy of circular " D-13 Circular letter " D-14 Copy of cheque " D-15 Copy of Chartered Accounts " D-16 Certified copy of Judgment in CC no.425/1986 " D-17 Certified copy of Judgment in CC no.238/1986 " D-18 Certified copy of order sheet in CC 238/1986 " D- 19 Certified copy of deposition of PW.4 " D- 20 Certified copy of deposition of PW.27 in Spl.CC.
" D-21 to 34 Certified copies of depositions in CC no.425/1986 (RAVI M. NAIK), I Addl.City Civil & Sessions Judge, Bangalore.85 O.S.No.5550/1987