Bangalore District Court
State Bank Of India vs Sri Mohammed Irshad on 7 August, 2015
IN THE COURT OF XLIV ADDL. CITY CIVIL & SESSIONS
JUDGE, BANGALORE (CCH-45).
DATED THIS THE 7TH DAY OF AUGUST 2015.
PRESENT
Shri RAVI.N.M., B.Com., LL.B.,
XLIV Addl.City Civil & Sessions Judge, Bangalore.
OS.NO.1442/2013
Plaintiff : State Bank of India, a Body
Corporate instituted under the
State Bank of India Act, 1955,
with his Corporate Centre at
Madam Cama Road, Nariman
Point, Mumbai-400021 and a
local head office at No.65,
St.Marks Road, Bengaluru-1 and
Entralised Clearing Processing
Centre at Vasavi Complex, 1st
Floor, 17, St.Marks road,
Bengaluru-1 represented by its
Assistant General Manager Sri
N.M.Hari Shankar.
(By Sri S.Krishna Swamy, Adv.).
-Vs-
Defendants : 1. Sri Mohammed Irshad
S/o.Mohammed Majid,
Plot No.7, Old Lions Club
Road, West Maredpally,
Secundarabad-500 026.
2 OS.No.1442/2013
2. M/s. Axis Bank Ltd.,
Services Branch, No.9, 1st
floor, Double road,
Bengaluru-27.
Represented by its
Assistant Gen. Manager.
3. M/s.Axis Bank Ltd.,
Maredpally branch,
Hyderabad-500001.
Represented by its
Assistant Gen. Manager.
[D1-Ex-parte, D2 & D3:
Sri Harish Ananthmurthy,
Adv,).
Date of Institution : 20.02.2013
Nature of the suit : Money Suit
Date of recording
of evidence : 27.08.2014
Date of Judgment : 07.08.2015
Total Duration : Day/s Months Years
17 05 02
3 OS.No.1442/2013
JUDGMENT
The suit of the plaintiff-bank is for recovery of Rs.3,25,211/- together with 18% interest and Court costs from the defendants.
2. The facts pleaded in the plaint in brief are that the M/s.Southern Electronics (Bengaluru) Private Ltd., (SEPL) having their unit at Plot No.16-A, Peenya Industrial Area, 1st phase, Bengaluru-58 maintained its Account No.10228876582 with State Bank of India, S.M.E. branch and had issued cheque bearing No.416015 dated 31.3.2012 for Rs.23,048/- in favour of M/s.Excel Engineering Company and the same was sent to them by professional couriers. The cheque did not reach the payee and M/s. Professional Couriers reported loss of cheque in question and at the request of payee i.e., company issued the stop payment of instrument which was duly registered in the books of plaintiff-bank.
The plaintiff-bank has established Centralized Clearing Processing Centres at various places in India including one at 4 OS.No.1442/2013 Bengaluru i.e., plaintiff branch. The functions and duties of the plaintiff are that, different branches of State Bank of India and other Banks present the cheques issued by its customers drawn on State Bank of India branches in clearing to the plaintiff-bank. If the cheuqes are presented to the plaintiff are otherwise in order it will make payment to the Banks (other than SBI branches) who have presented the cheques in clearing on behalf of its customers. If the cheques presented in clearing are prima-facie in order the plaintiff makes the payment in due course in good faith without negligence. In the instant case, on 19.4.2012 the 3rd defendant has presented a cheque purportedly bearing No.416075 dated 31.3.2012 for Rs.2,78,050/- allegedly drawn by the SEPL company and it was paid to the 3rd defendant in clearing. M/s.SEPL having come to know that a payment of Rs.2,78,050/- was made by the plaintiff-bank the said company disputed the transaction and confirmed that, hey had not issued the cheque for Rs.2,78,050/-. On careful consideration, it was noticed by the plaintiff-bank that cheque bearing No.416015 was altered to 416075 and the amount of 5 OS.No.1442/2013 Rs.23,048/- was altered to Rs.2,78,050/- and name of the payee was altered from M/s.Excel Engineering Company to Sri Mohammed Irshad the 1st defendant. The alteration made was not visible on the naked eye. Having noticed that a fraud has been taken place, the plaintiff-bank has lodged a complaint u/S.465, 408, 471 and 420 of IPC against the 1st defendant.
It is further pleaded that, a request was made to the 2nd defendant with whom the 1st defendant had opened the account and on careful examination of the document it was noticed that the 2nd defendant had not followed KYC [Know Your Customer] regulation as prescribed by the R.B.I. while opening the account of the 1st defendant. In a span within 2½ months after opening of the account of the 1st defendant with the 2nd defendant though the account was opened with a minimum balance of Rs.5,600/-, a cheque of huge amount of Rs.2,78,050/- was presented for collection and thereby the 2nd defendant has shown its negligence without verification of genuineness of the cheque presented by the 1st defendant. 6 OS.No.1442/2013 Likewise, the 3rd defendant without noticing all these irregularities and malpractice, has presented the cheuqe to the plaintiff-bank for collection and the plaintiff-bank bonafide honoured the cheque sent for collection and thereby, for having caused the loss to the plaintiff-bank the defendants are liable to pay the suit claim to the plaintiff-bank. Pleading the above cause of action, the plaintiff-bank has sought for decreeing the suit in its favour.
3. After the institution of the suit, the summons was ordered to the defendants and despite service of summons, the defendant No.1 did not appear before the Court and thereby, he was placed ex-parte by the transferor Court. The defendant Nos.2 and 3 have appeared through their advocate and filed their written statement.
4. The gist of the written statement of defendant Nos.1 and 2 is to the effect that the defendant No.1 had opened the account with the 2nd defendant bearing No.912010009612519 after compliance of K.Y.C. rules. The 7 OS.No.1442/2013 defendant No.1 had produced the PAN Card for his identity proof and latest utility bill for address proof, following the due process, the account of the 1st defendant was opened. On 19.4.2012 the 1st defendant had deposited a cheque bearing No.416075 for Rs.2,78,050/- drawn on plaintiff-bank for collection at Bengaluru branch and accordingly, the cheque was presented for collection to the plaintiff-bank. There was no negligence on the part of the 2nd and 3rd defendant in sending the cheque for collection to the plaintiff-bank and it had taken all the care as could be reasonably taken by a Banker as collecting Banker. On perusal of the instrument presented by the 1st defendant for collection apparently there was no irregularities found by the 2nd defendant and thereby, it was sent for collection to the plaintiff-bank. The plaintiff- bank without doubting authenticity of the instrument has cleared the cheque sent for collection and thereby, the account of the 1st defendant was given credit of the amount mentioned in the instrument sent for collection and thereby, there was no iota of doubt about the authenticity of the cheque put for collection and accordingly, the defendants 2 8 OS.No.1442/2013 and 3 in the normal course with all bonafideness acted upon.
It is further pleaded that, on 29.6.2012 the defendant No.3 received an intimation regarding the fraudulent encashment from 2nd defendant. However, by the time the 3rd defendant could exercise the caution in the account, major part of the amount was withdrawn by the 1st defendant leaving a balance of Rs.Zero and that account was marked as debit freeze immediately. It has come to the knowledge of the 3rd defendant that the 1st defendant has vacated from the given address. On verification of the address proof provided by the 1st defendant under K.Y.C and documents available with it were provided to the plaintiff to lodge the complaint.
The defendant Nos.2 and 3 have denied various averments of the plaint that the defendant Nos.2 and 3 have not taken proper care and caution and there was negligence on their part in presenting the instrument to the plaintiff-bank which was a forged one and thereby, the defendant Nos.2 and 3 are responsible and liable to make good the loss to the plaintiff-bank which was given credit to the account of its 9 OS.No.1442/2013 customer SEPL. Since the defendant No.2 and 3 have not shown any negligence in either opening the account of the 1st defendant with the 2nd defendant or the cheque presented for collection to the plaintiff-bank, absolutely both the defendants are not responsible for the suit claim and the plaintiff-bank in order to waive its liability, has tried to shift it over to the defendants 2 and 3.
Infact the plaintiff-bank holds an account of its customer SEPL and when there was stop payment given by its customer reporting that the cheque sent by it was lost, ought to have taken utmost care before honouoring the cheque sent for collection, but the plaintiff-bank did not take necessary care and caution while clearing the cheque and without therebeing any doubt over the authenticity of the cheque sent by the defendant Nos.2 and 3 for collection, the plaintiff-bank has cleared the cheque and after doing so, only on the complaint of its customer, it has tried to shift over the liability on the defendant Nos.2 and 3 instead of owning its own liability for having passed the cheque through collection, has made false 10 OS.No.1442/2013 claim against defendant No.2 and 3 and thereby the defendants 2 and 3 are not liable to pay the suit claim and thereby, sought for dismissal of the suit with cost.
5. On the basis of the pleadings and documents presented, the following issues came to be framed by the transferor Court:
1. Whether the plaintiff proves that the defendant No.2 has not followed the KYC regulations as prescribed by RBI by opening the account in the name of defendant No.1?
2. Whether the plaintiff proves that the defendant No.2 and 3 had collected the altered and forged cheque negligently without due care and caution?
3. Whether the plaintiff proves that the defendant No.2 and 3 along with defendant No.1 are jointly liable to pay the suit claim amount?
4. Whether the plaintiff is entitled for the reliefs claimed against defendants? 11 OS.No.1442/2013
5. What decree or order?
6. In order to establish the plaint averments, Chief Manager of the plaintiff branch was examined as PW.1 and Asst.Manager of plaintiff-bank was examined as P.W.2 and got marked documents from Ex.P1 to P11. The Asst.Vice Preseident of the 2nd and 3rd defendant Bank was examined as D.W.1 and no document was got marked for the defendant No.2 and 3.
7. I have heard the arguments of learned advocates appeared for the plaintiff and no argument was addressed by defendant Nos.2 and 3 and also perused the entire case records, on its basis, my findings on the above issues are as under:
Issue No.1 : In the Negative
Issue No.2 : In the Negative
Issue No.3 : In the Negative
Issue No.4 : Partly in the affirmative
Issue No.5 : As per final order,
for the following:
12 OS.No.1442/2013
REASONS
8. ISSUE NOs.1 TO 4: These issues are inter-connected
with each other, for better appreciation of oral and
documentary evidence and to appreciate the legal
prepositions, all these issues are taken together for
consideration.
9. The counsel for plaintiff has relied on the following citations:
1. AIR 1981 Madras, 129, in the case of Indian Bank Vs. Catholic Syrian Bank Ltd.,
2. AIR 1988 Madras, 256, in the case of the Vysya Bank Ltd., Madras Vs. Indian Bank, Madras.
3. Company Cases 1992, 481 in the case of Indian Overseas Bank Vs. Bank of Madura Ltd.,
4. AIR 1997 Madras, 23, in the case of United Bank of India, Madras Vs. Bank of Baroda Madras.
5. AIR 1999 Madras 1, in the case of United Bank of India Vs. M/s.Central Scientific Supplies Company Ltd., and others.13 OS.No.1442/2013
6. AIR 1994 Kar. 315, in the case of Syndicate Bank Vs. Jaishree Industries and others.
7. [1999]3 Supreme Court Cases, 573, in the case of Vidhyadhar Vs. Manikrao and another.
10. The evidence of P.W.1 is to the effect that, M/s.Southern Electronics (Bengaluru) Private Ltd., (SEPL) having their unit at Plot No.16-A, Peenya Industrial Area, 1st phase, Bengaluru-58 maintained its account No.10228876582 with State Bank of India, SME branch and had issued cheque bearing No.416015 dated 31.3.2012 for Rs.23,048/- in favour of M/s.Excel Engineering Company and the same was sent to them by professional couriers. The cheque did not reach the payee and M/s. Professional Couriers reported lost of cheque in question and at the request of payee i.e., company issued the stop payment of instrument which was duly registered in the books of plaintiff-bank.
The plaintiff-bank has established Centralized Clearing Processing Centres at various places in India including one at Bengaluru i.e., plaintiff branch. The functions and duties of 14 OS.No.1442/2013 the plaintiff are that, different branches of State Bank of India and other Banks present the cheques issued by its customers drawn on State Bank of India branches in clearing to the plaintiff-bank. If the cheuqes are presented to the plaintiff are otherwise in order it will make payment to the Banks (other than SBI branches) who have presented the cheques in clearing on behalf of its customers. If the cheques presented in clearing are the prima-facie in order the plaintiff makes the payment in due course in good faith without negligence. In the instant case, on 19.4.2012 the 3rd defendant has presented a cheque purportedly bearing No.416075 dated 31.3.2012 for Rs.2,78,050/- allegedly drawn by the SEPL company and it was paid to the 3rd defendant in clearing. M/s.SEPL having come to know that a payment of Rs.2,78,050/- was made by the plaintiff-bank the said company disputed the transaction and confirmed that, hey had not issued the cheque for Rs.2,78,050/-. On careful consideration, it was noticed by the plaintiff-bank that cheque bearing No.416015 was altered to 416075 and the amount of Rs.23,048/- was altered to Rs.2,78,050/- and name of the 15 OS.No.1442/2013 payee was altered from M/s.Excel Engineering Company to Sri Mohammed Irshad the 1st defendant. The alteration made was not visible o the naked eye. Having noticed that a fraud has been taken place the plaintiff-bank has lodged a complaint u/S.465, 408, 471 and 420 of IPC against the 1st defendant.
It is further deposed by PW.1 that, a request was made to the 2nd defendant with whom the 1st defendant had opened the account and on careful examination of the document it was noticed that the 2nd defendant had not followed KYC [Know Your Customer] regulation as prescribed by the R.B.I. while opening the account of the 1st defendant. In a span within 2½ months after opening of the account of the 1st defendant with the 2nd defendant though the account was opened with a minimum balance of Rs.5,600/-, a cheque of huge amount of Rs.2,78,050/- was presented for collection and thereby the 2nd defendant has shown its negligence without verification of genuineness of the cheque presented by the 1st defendant. Likewise, the 3rd defendant without 16 OS.No.1442/2013 noticing all these irregularities and malpractice, has presented the cheuqe to the plaintiff-bank for collection and the plaintiff- bank bonafide honoured the cheque sent for collection and thereby, for having caused the loss to the plaintiff-bank the defendants are liable to pay the suit claim to the plaintiff- bank.
11. In order to substantiate the oral evidence, P.W.1 has produced the following documents:
Ex.P1 : Ch.No.416075 dated:31.3.2012 for Rs.2,78,050/-
Ex.P1(a) : Signature of P.W.2
Ex.P2 : Ch.No.416075 dated:31.3.2012 for
Rs.4,608/-
Ex.P3 : Letter dt:1.6.2012 of Southern Electronics
Ltd.,
Ex.P4 : Another letter dt:27.6.2012 of Southern
Electronics.
Ex.P5 : Certified copy of the complaint
dated:2.7.2012 filed by Bank
Ex.P6 : Certified copy of the FIR in Cross-
examination.No.167/2012
Ex.P7 : Copy of letter dated:6.7.2012 to defendant
No.3.
17 OS.No.1442/2013
Ex.P8 : Copy of legal notice dated:3.8.2012
Ex.P9 : Postal acknowledgement
Ex.P10 : Reply notice by defendant No.3
Ex.P11 : Statement of Account of Southern Electronics
Ltd.,
12. The learned advocate for the defendants has cross-
examined the evidence of P.W.1 and through out maintained that, there was no negligence on the part of defendants 2 and 3 in presenting the cheque for collection which was deposited by the 1st defendant and it was the plaintiff-bank which was duty bounden to verify the cheque in case of any malpractice said to be caused on the cheque presented for collection. It was also suggested that the plaintiff being the account holder of the SEPL Company, was very well acquaintance with its transactions and despite stop payment was given by the said company, the plaintiff-bank without considering it has cleared the cheque for collection and thereby, there was no negligence on the part of defendants 2 and 3 and it was only the plaintiff-bank which was negligent and thereby the defendants 2 and 3 are not liable to pay the suit claim to the 18 OS.No.1442/2013 plaintiff-bank, but P.W.1 has denied the suggestion made in the course of cross-examination.
13. On perusal of plaint averments and also the pleadings of the written statement of defendants 2 and 3 and the evidence adduced by the plaintiff, it is crystal clear that the plaintiff-bank has maintained the account of the SEPL Company and it is not in dispute that, there was a stop payment given by the said company on the ground that the cheque which was transmitted by it to M/s.Excel Engineering Company bearing No.416015 for Rs.23,048/- was lost during the transit in the courier services.
14. As could be seen from the evidence of P.W.1, a cheque was presented by defendants 2 and 3 for collection to the plaintiff-bank which was deposited by 1st defendant which was said to be an altered cheque issued by SEPL company by altering the name and also the amount of the instrument. In the instant case, undoubtedly, for the defendants 2 and 3 the Vice President of the defendants 2 19 OS.No.1442/2013 and 3 was examined as D.W.1 who has filed his affidavit for examination-in-chief, but he did not appear for cross- examination before the Court, still the Court has to consider that, whether there was any negligence on the part of the plaintiff or the defendants 2 and 3 in sending the cheque for collection presented by the 1st defendant to the plaintiff- bank.
15. Undoubtedly, since there was an account being maintained by the SEPL company with the plaintiff-bank, the plaintiff-bank ought to be very much cautious in honouring the cheque since it will be having the specimen signature of the authorized signature of the SEPL Company and also it will be having access to make any confirmation when a cheque was presented for collection from outstation. In the instant case, as deposed by P.W.1 there was a stop payment issued by SEPL company not to make payment in respect of cheque No.416015 on the ground that instrument was lost during the transit in courier service.
20 OS.No.1442/2013
16. On perusal of the evidence available on record, it is the evidence of P.W.1 that the cheque bearing No.416075 was sent for collection from Hyderabad by the defendant No.3 which was presented by defendant No.2 to the 3rd defendant for collection belonging to the 1st defendant and it has with all good faith honoured the cheque sent for collection and the 1st defendant soon after that amount was credited to his account has withdrawn it. It is the allegation of the plaintiff that the defendant No.2 before opening the account of the 1st defendant has not collected proper documents to know his background and thereby, it has failed in following the Norms prescribed by the Reserve Bank of India under the caption 'KNOW YOUR CUSTOMER' and it has accepted the cheque put for collection by the 1st defendant who had opened the account with a minimum balance of Rs.5,600/- has put the cheque for collection on a huge amount of Rs.2,78,050/- and thereby, the 2nd defendant was negligent in following the Norms of KYC and the 3rd defendant without verification of it had sent the cheque for collection to the plaintiff-bank and the plaintiff-bank with all bonafide without suspecting the 21 OS.No.1442/2013 genuineness of the cheque sent for collection has cleared it and later on, it came to know through SEPL Company that it had not issued the cheque for Rs.2,78,050/- and thereby the amount which was re-credited to the account of SEPL has to be redebited by the defendants 2 and 3 alongwith defendant No.1 to the plaintiff-bank together with interest.
17. On perusal of the evidence and the principles governing the Banking Rules and Procedures the Norms of Reserve Bank of India, it is very much clear that the plaintiff- bank being the holder of the account of SEPL Company, ought to have made an enquiry with the said customer when a cheque for Rs.2,78,050/- was presented for collection through 2nd and 3rd defendants bearing cheque No.416075. It is an undisputed fact that the SEPL Company had requested the plaintiff-bank to stop payment in respect of the last instrument that was bearing cheque No.416015 issued for Rs.23,048/-, it was the duty of the plaintiff when a cheque of similar series was presented for collection that too for a huge amount of Rs.2,78,050/-, it ought to have verified it and 22 OS.No.1442/2013 scrutinize in a careful manner than in a casual approach before clearing that instrument.
18. It is the evidence of P.W.1 that the cheque which was sent for collection was from Hyderabad branch and when the cheque was put for collection bearing No.416075 and there was material alteration of cheque number from 416015 to 416075 and the amount which was mentioned both in figures and words was altered from Rs.23,058/- to Rs.2,78,050/-, the plaintiff-bank had to exercise the utmost vigilant over the matter and to make an enquiry with the customer whether that cheque was issued by the SEPL company in the name of the 1st defendant or otherwise, but the plaintiff-bank has not taken care in that regard and it has cleared the cheque sent for collection and put the burden on the defendants 2 and 3 who have sent it for collection and claimed the suit claim from them and it is not a legally tenable claim made by the plaintiff-bank.
23 OS.No.1442/2013
19. In support of the evidence of P.W.1, the plaintiff- bank has got examined P.W.2 by name M.Lakshman Rao Kadam an Asst.Manager at Centralised Clearing Processing Centre and he has also deposed the evidence in tune with the plaint averments and the evidence of P.W.1. The evidence of P.W.2 is to the effect that he has cleared the cheque which was presented by the defendant Nos.2 and 3 for collection and he carried the normal caution to clear cheque and for the bare eye there was no noticeable irregularities or the alteration of cheque could be found by him and thereby, he has passed the cheque for clearance marked at Ex.P1.
20. No doubt, the defendant Nos.2 and 3 have not cross-examined the evidence of P.W.2. Still for the reasons assigned by this Court, in the foregoing paragraphs, this Court holds that the plaintiff-bank ought to be very cautious in clearing the cheque when there was a stop payment issued by its customer in so far as an lost instrument that too when a cheque of the same series was presented for its collection through defendant Nos.2 and 3. In the absence of any care 24 OS.No.1442/2013 being taken by the plaintiff-bank in not verifying about the cheque presented for collection from its customer, this Court holds that, even the evidence of P.W.2 would not help to seek for a decree against the defendant Nos.2 and 3 by the plaintiff-bank.
21. It is the system in the banking regulation that, when the cheque is put by the customer for collection, the bank generally sends the cheque for collection and the payee bank which holds the account of the person to whose account amount of cheque is to be debited should exercise all the care and caution before passing that cheque including the genuineness of the cheuqe or in the event of any small doubt to dis-honour the cheque for the reasons which has noticed by it in such cheques. In the instant case, it is very much clear that the plaintiff-bank has not taken proper care in honouring the cheque sent for collection by the 3rd defendant belonging to the 1st defendant sent it for collection by the 2nd defendant through 3rd defendant. In that way of the matter, this Court holds that, there was no negligence that can be saddled on 25 OS.No.1442/2013 the defendants 2 and 3 to hold that, they have failed to follow the Norms of K.Y.C. and they have not verified the cheque carefully before it was sent for collection to the plaintiff-bank.
22. On perusal of the documents produced by the plaintiff, it is seen that the plaintiff later detected that, there was a fraud committed by the 1st defendant in materially altering Ex.P1-cheque which was belonging to the SEPL Company which was lost in the courier transmission. The evidence of P.W.1 and the documents produced clearly show that the plaintiff-bank has lodged complaint as per Ex.P5. On perusal of the reply sent by defendant Nos.2 and 3 to the notice got issued by the plaintiff, they have also made it clear that, in case of any fraud is detected the plaintiff-bank will be at liberty to recover the amount paid through Ex.P1 cheque by means of claiming it from the 1st defendant.
23. On perusal of the written statement, it is very much clear that the 1st defendant has left Zero balance in his account and thereby in all probabilities as per Ex.P1 and P2, it 26 OS.No.1442/2013 is the 1st defendant who has unlawfully gained by presenting Ex.P1 cheque for collection through defendant Nos.2 and 3 and that amount was paid by the plaintiff-bank from the account of SEPL company and later on, on the letter correspondence made by the SEPL company, the plaintiff- bank has given credit of Rs.2,78,050/- to the SEPL Company account and thereby, the plaintiff-bank has virtually put into loss in respect of the amount shown in Ex.P1 cheque, thereby, it has got every right to recover that amount from the 1st defendant to whose account the clearance cheque amount of Rs.2,78,050/- was credited and the 1st defendant has withdrawn that amount from his account from the 2nd defendant-Bank.
24. The D.W.1 has filed his affidavit for examination- in-chief, but he did not tender himself for cross-examination and thereby, it can be safely held that, there is no evidence adduced by defendant Nos.2 and 3 in the case still the evidence of PWs.1 and 2 and the documentary evidence produced by the plaintiff, it can be safely held that the 27 OS.No.1442/2013 plaintiff has failed to establish the negligence or deviation in KYC Rules in opening the account of the 1st defendant by the 2nd defendant and there was negligence on the part of the defendant Nos.2 and 3 and thereby, the defendant Nos.2 and 3 are not liable to pay the suit claim to the plaintiff and on the other hand, for the above said discussions, it is the 1st defendant who is liable to pay the suit claim to the plaintiff- bank and thereby the provisions of law in respect of Negotiable Instruments Act particularly u/S.131 of the Act and the principles ruled in the decisions relied on by the counsel for the plaintiff would not help the plaintiff in getting the decree against defendant Nos.2 and 3, however, in view of the above discussions, the suit of the plaintiff-bank needs to be decreed as prayed for against defendant No.1 only, with these observations, issue Nos.1 to 3 are answered in the negative and issue No.4 is answered partly in the affirmative holding that the plaintiff-bank is entitled to a decree against the 1st defendant only.
28 OS.No.1442/2013
25. ISSUE NO.5: For the reasons assigned on issue Nos.1 to 4 and the findings recorded on them, the following order is passed:
ORDER The suit of the plaintiff-bank is partly decreed with cost against 1st defendant.
The suit against defendant Nos.2 and 3 stands dismissed.
The plaintiff-bank is entitled to recover Rs.3,25,211/- together with interest at the rate of 18% p.a. from the date of suit till realization of entire decretal amount from the 1st defendant.
Draw decree in terms of judgment.
---
(Dictated to the judgment writer, computerised by her, corrected, signed and then pronounced by me in the open court on this the 7th day of August 2015).
(RAVI. N.M.), XLIV ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE.
29 OS.No.1442/2013ANNEXURE LIST OF WITNESSES EXAMINED FOR PLAINTIFF:
PW.1 : Sri Diwan Bahuguna PW.2 : Sri M.Lakshman Rao Kadam.
LIST OF WITNESSES EXAMINED FOR DEFENDANTS:
DW.1 : Sri B.R.Subramanya.
LIST OF DOCUMENTS MARKED FOR PLAINTIFF:
Ex.P1 : Ch.No.416075 dated:31.3.2012 for
Rs.2,78,050/-
Ex.P1(a) : Signature of P.W.2
Ex.P2 : Ch.No.416075 dated:31.3.2012 for
Rs.4,608/-
Ex.P3 : Letter dt:1.6.2012 of Southern Electronics
Ltd.,
Ex.P4 : Another letter dt:27.6.2012 of Southern
Electronics.
Ex.P5 : Certified copy of the complaint
dated:2.7.2012 filed by Bank
Ex.P6 : Certified copy of the FIR in Cross-
examination.No.167/2012
Ex.P7 : Copy of letter dated:6.7.2012 to defendant
No.3.
Ex.P8 : Copy of legal notice dated:3.8.2012
Ex.P9 : Postal acknowledgement
30 OS.No.1442/2013
Ex.P10 : Reply notice by defendant No.3
Ex.P11 : Statement of Account of Southern Electronics Ltd., LIST OF DOCUMENTS MARKED FOR DEFENDANTS:
- Nil -
XLIV ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE.31 OS.No.1442/2013
07/08/2015:
JUDGMENT PRONOUNCED IN OPEN COURT (SEPARATE JUDGMENT) The suit of the plaintiff-bank is partly decreed with cost against 1st defendant. The suit against defendant Nos.2 and 3 stands dismissed.
The plaintiff-bank is entitled to recover Rs.3,25,211/- together with interest at the rate of 18% p.a. from the date of suit till realization of entire decretal amount from the 1st defendant.
Draw decree in terms of judgment.
[RAVI N.M.] XLIV ADDITIONAL CITY CIVIL & SESSION JUDGE, BANGALORE.32 OS.No.1442/2013
Having regard to the above discussed facts and circumstances, this Court holds that the principles ruled in the citation relied on by the counsel for plaintiff referred supra would not help the plaintiff-bank to claim that, it has acted in good faith following normal rules and taken all care and caution still it was the defendants 2 and 3 who have sent the cheque for collection with negligence cannot be accepted to saddle the liability on the defendants 2 and 3 to pay the suit claim, thereby, this Court holds that the plaintiff-bank is not entitled to the relief prayed in the suit, accordingly, issue Nos.1 to 4 are answered in the negative.