Calcutta High Court
Eva Seth vs Bank Of Maharashtra on 5 August, 2016
Author: Debangsu Basak
Bench: Debangsu Basak
C.S. No. 270 of 2009
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
Eva Seth
Vs.
Bank of Maharashtra
For the Plaintiff : Mr. S. Ghosh, Advocate
Mr. P. Saha, Advocate
Mr. S.S. Bhutoria, Advocate
For the Defendant : Mr. Ranjan Deb, Sr. Advocate
Ms. Aruna Ghosh, Advocate
Ms. Alokananda Sen, Advocate
Hearing concluded on : August 3, 2016
Judgment on : August 5, 2016
DEBANGSU BASAK, J.
The plaintiff has sought recovery of various sums of money on account of damages and alleged entitlement of the plaintiff from the defendant on account of the banking transactions had between them. The defendant has filed a written statement contesting the claim of the plaintiff.
The issues in the instant suit were initially framed on April 18, 2011. Such issues were reframed on January 25, 2012. The issues in the instant suit are as follows:-
1. Is the plaintiff entitled to the claim made in the plaint?
2. Is the suit barred by law of limitation?
3. Are the claims of the plaintiff barred by res judicata or principles analogous thereto in view of the pleadings in paragraph 22(g) of the plaint and paragraph 5(xvi) and (xx) of the written statement?
4. Is the plaintiff entitled to loss or damages as alleged in paragraph 36 of the plaint?
5. To what other relief, if any, is the plaintiff entitled?
Learned Advocate for the plaintiff has submitted that, the claim of the plaintiff arises out of the banking transactions that the plaintiff had with the defendant. The defendant was in a superior bargaining position than the plaintiff. The defendant had executed documents from time to time in favour of the plaintiff at the dictates of the plaintiff. The plaintiff was allowed to enjoy a foreign credit facility from the defendant commonly known as a Packing Credit in Foreign Currency (PCFC) Scheme. He has submitted that, between 1986 and 1995 the defendant had granted the credit facility against confirmed orders of the plaintiff. The initial credit limit was enhanced from time to time. The plaintiff had exported the goods covered under the bills discounted with the plaintiff. He has submitted that, the defendant did not credit the value of the bills in the account of the defendant. In such way the plaintiff had retained substantial amount without giving due credits thereof to the defendant. The defendant had charged interest in excess than those prescribed by the Reserve Bank of India. The plaintiff was not aware of the same initially. Upon becoming aware of the same, the plaintiff had filed a writ petition before this Hon'ble Court. Such writ petition was disposed of by a judgment and order dated September 4, 1997 being Exhibit 'D'. An appeal was carried against Exhibit 'D'. The appeal was dismissed by a judgment and order dated June 24, 2003. He has contended that, Exhibit 'D' stipulates that the interest charged by the defendant in the PCFC account was incorrect. Therefore, the claim on account of interest stands established. He has referred to the fact that, the defendant had initiated proceedings under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 against the plaintiff. Such proceedings was dismissed by an Order dated December 18, 2008 passed by the Debts Recovery Tribunal, Kolkata. The appeal against such order of the Debts Recovery Tribunal was dismissed by the Debts Recovery Appellate Tribunal being Exhibit 'Z5'. The revisional application directed against Exhibit 'Z5' is pending. Learned Advocate for the plaintiff has referred to paragraph 32 of the plaint and the sub-paragraphs thereunder and has submitted that, the claims of the plaintiff are on different grounds. He has referred to various exhibits and the answers given by the witnesses so far as the claims of the plaintiff are concerned. He has submitted that the claims of the plaintiff stands established and, therefore, the plaintiff is entitled to the decree as prayed for.
On the question of limitation, the learned Advocate for the plaintiff has submitted that, although the banking transactions relate to the period 1986 and 1995 and the suit has been filed in 2009, no part of the claim is barred by the laws of limitation. He has submitted that, the bank is holding on to the balance amount in the PCFC account. Since the bank is holding on to the balance amount payable to the plaintiff, the defendant is to be considered as the trustee of such amounts for plaintiff. In view of Section 10 of the Limitation Act, 1963 the instant suit is within the period of limitation. Learned Advocate for the plaintiff has referred to Article 10 of the Schedule to the Limitation Act, 1963 and has submitted that, the period of three years will commence from the date of demand. In the present case, the demand made by the plaintiff for refund was on May 16, 2008 being Exhibit 'Z3'. The suit has been filed in 2009. Therefore, the suit is within the period of limitation. He has further submitted that, the plaintiff did not file the suit earlier in view of the pendency of the proceedings before the Debts Recovery Tribunal and the Debts Recovery Appellate Tribunal. Learned Advocate for the plaintiff has referred to Exhibit 'Z' being the audit report dated June 24, 2003 in his effort to substantiate the claim of the plaintiff. He has referred to Exhibit 'I' being the packing credit statement. He has submitted that, Exhibit 'Z' has been prepared on the basis of the statement of account given by the defendant in the proceedings before the Debts Recovery Tribunal. Prior thereto the plaintiff did not have access to the account in spite of requests being made. He has referred to the letter dated July 19, 1999 being Exhibit 'E' in support of the contention that, the plaintiff had issued letters requesting for documents. The defendant did not furnish the documents as requested by the plaintiff.
Learned Advocate for the plaintiff has submitted that, the export documents have been marked as exhibits. The value of the bills will appear in such exhibits. He has submitted that, Exhibit 'Z' is an audit report which has taken into account the rate of interest that was required to be charged against the rate of interest actually charged. He has submitted that, the plaintiff is entitled to the difference on account of excess interest charged.
Learned Senior Advocate for the defendant has submitted that, the order of the Debts Recovery Tribunal dated December 18, 2008 records that the plaintiff did not make any counterclaim in the proceedings before the Debts Recovery Tribunal. He has submitted that, on December 18, 2008 there was no legal impediment on the part of the plaintiff to make a counterclaim in the recovery proceedings. The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was amended in the year 2002 and it allows the Debts Recovery Tribunal to look into a counterclaim by a constituent. The plaintiff being a constituent of the defendant, it did not make any counterclaim in the proceedings before the Debts Recovery Tribunal, although entitled thereto. Since the plaintiff did not raise any counterclaim in the proceedings before the Debts Recovery Tribunal, the present suit is barred by the principles of res judicata. He has submitted that, the claim of the plaintiff is barred by the laws of limitation. He has pointed out to the fact that, the banking transactions relate to the period upto 1995. Subsequent thereto the proceedings before the Debts Recovery Tribunal was filed by the defendant against the plaintiff. In such proceedings the plaintiff did not raise any counterclaim. The plaintiff did not raise any counterclaim in the proceedings before the Debts Recovery Appellate Tribunal also. The plaintiff did not file a suit till the instant one in 2009. He has submitted that, the claim made in the present suit is hopelessly barred by the laws of limitation. He has referred to Exhibit 'Z' being the report of the Auditor and has submitted that, the Auditor has not given any explanations as to how the figures in the audit report have been arrived at. The audit report has not taken into consideration the then existing Reserve Bank of India circulars relating to the rate of interest. The Auditor did not take into account the audited Balance Sheet of the plaintiff where the plaintiff had accepted the rate of interest charged by the defendant. The Auditor did not consider that, apart from the Reserve Bank of India circulars the parties may have agreed to a particular rate of interest. He has referred to the answers given by the Auditor in cross-examination where the Auditor has stated that, the relevant Reserve Bank of India circulars have not been tendered in evidence.
Learned Senior Advocate for the defendant has submitted that, the plaintiff in her evidence has stated that, the claim of the plaintiff is limited to the difference in the rate of interest. In support of such contention learned Senior Advocate for the defendant has referred to the answers of the plaintiff given to question nos. 959, 963 and 964. The second issue is taken up first for consideration for the sake of convenience. The claim for damages of the plaintiff is on account of banking transactions had between the parties for the period between 1986 and 1995. This is the pleading in the plaint and particularly paragraph 3 thereof. No document has been relied upon in the course of submissions by the parties to suggest that, the period of three years from 1995 stood extended by acknowledgement of existence of jural relationship between the parties for a period extending upto a period of time so as to bring the date of the filing of the suit within 3 years from such extended date.
The defendant had filed a proceedings under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 before the Debts Recovery Tribunal, Kolkata in 1996. Such proceedings was dismissed by the Order dated December 18, 2008. An appeal preferred against such order of dismissal before the Debts Recovery Appellate Tribunal was dismissed by the Order dated January 1, 2011 being 'Z5'. The order of the Debts Recovery Tribunal dated December 18, 2008 records that the plaintiff did not make any counterclaim. The plaintiff has filed the instant suit in 2009.
The concept of trust introduced by the learned Advocate for the plaintiff does not assist the plaintiff. In the present case, the plaintiff had enjoyed credit facilities from the defendant. Therefore, the plaintiff did not keep any amount in deposit any amount with the defendant so as to claim that, the defendant had kept such money of the plaintiff in trust of the plaintiff. The plaintiff had advanced amounts to the plaintiff which the plaintiff was liable to repay. However, the liability of the plaintiff to repay any amount to the plaintiff stood adjudicated upon by the order of the Debts Recovery Tribunal dated December 18, 2008 and the order of the Debts Recovery Appellate Tribunal dated January 4, 2011 being Exhibit 'Z5'. The Tribunals have held that, the plaintiff need not pay any amount to the defendant on account of such loan transactions.
Since the plaintiff did not keep any money in deposit with the defendant, the question of Article 22 of the Limitation Act, 1963 coming into operation does not arise. Therefore, the effort of the plaintiff to save limitation through Exhibit 'Z3' being the letter of demand dated May 16, 2008 is of no assistance of the plaintiff.
The second issue, therefore, has to be answered in the affirmative and against the plaintiff.
The third issue is taken up for consideration for the sake of convenience. The plaintiff was entitled to make a counterclaim in the proceedings before the Debts Recovery Tribunal at least after the amendment to the provisions of the Act of 1993 being introduced to permit adjudication of counterclaim by the Debts Recovery Tribunal. The plaintiff chose not to do so. While dismissing the claim of the defendant, the Debts Recovery Tribunal had noted that the plaintiff did not make a counterclaim. The counterclaim could not be considered by the Debts Recovery Tribunal as the plaintiff did not make one. The plaintiff could have made the counterclaim. The counterclaim could have been on all of the points raised by the plaintiff in the suit. The Debts Recovery Tribunal had the jurisdiction and was competent to adjudicate the same. The plaintiff not choosing to raise such counterclaim, the present claim made in the suit is barred by the principles of res judicata.
The third issue is answered in the affirmative and against the plaintiff. The first and the fourth issues are taken up together for consideration for the sake of convenience. Paragraph 32 of the plaintiff quantifies the heads and the grounds of claims of the plaintiff. The first ground of claim is wrongful withholding of the payment from the foreign buyers against export invoices. The documents made available on record show that, the defendant had squared up the packing credit limit by relevant debit or credit entry as the situation demanded in relation to the current or the cash credit account subsisting at the material point of time. Therefore, the amount receivable by the plaintiff on account of excess realization was credited in the current or the cash credit account of the plaintiff. Amount realizable by the defendant from the plaintiff on account of any packing credit facility was in turn credited with amount debited from the current or the cash credit account of the plaintiff. The current or the cash credit account of the plaintiff, therefore, will demonstrate the amount which the plaintiff was liable to pay or to receive. The plaintiff had operated the current or the cash credit account during the period concerned. It had made several withdrawals over and above the value of the bills concerned. Therefore, the first ground of claim of wrongful withholding is without any evidence. The second and the third grounds of claim relate to charging of interest at rates in excess than the rates prescribed by the Reserve Bank of India. In this regard by the judgment and order dated September 4, 1997 the Hon'ble High Court has held that, the interest charged in the account was in excess. However, the actual quantification of the rate of interest or the amount charged in excess was left to be adjudicated by an appropriate authority. The plaintiff had led evidence through Exhibit 'Z' being the audit report to substantiate that, the rate of interest charged by the bank was in excess and that it should have been charged as the rates shown in Exhibit 'Z'. However, the Auditor who has prepared Exhibit 'Z' in evidence has stated that, the corresponding Reserve Bank of India circulars prescribing the rate of interest as shown in Exhibit 'Z' have not been tendered in evidence. The Auditor has claimed that, he has considered the rate of interest prescribed by the Reserve Bank of India. However, the document that he had considered to arrive at the findings as to the rate of interest charged by the defendant to be at variance has not been produced in evidence by the plaintiff. In such circumstances, the contents of Exhibit 'Z' remain unsubstantiated. It cannot be relied upon as a piece of evidence to establish that the rate of interest was required to be charged in respect of the accounts concerned. In such circumstances, the two heads of claims on account of wrongful charging of interest cannot be allowed. The fourth to the eighth heads of claim in Paragraph 32 of the plaint have been explained by the defendant by stating that, the sums have been adjusted against the claim of the defendant against the plaintiff. These adjustments have not been established to be wrong. In such circumstances, the first and the fourth issues are answered by holding that the plaintiff is not entitled to the claim made in the plaint. The plaintiff is not entitled to the loss or damages as claimed in the plaint.
The first four issues being answered in the manner as discussed above, the fifth issue has to be answered in the negative and against the plaintiff.
C.S. No. 270 of 2009 is dismissed. The parties will bear their respective costs.
The department is directed to draw up and complete the decree as expeditiously as possible.
[DEBANGSU BASAK, J.]