Delhi District Court
Standard Chartered Bank vs Standard Chartered Bank . Page No. 1 Of 23 on 29 August, 2018
IN THE COURT OF SH. FAHAD UDDIN:CIVILJUDGE:
CENTRAL DISTRICT: TIS HAZARI COURTS: NEW DELHI
CS No.97385/19
IN THE MATTER OF
State Bank of India
Service Branch
11, Sansad Marg,
New Delhi-110001.
.................Plaintif
Versus
1. Standard Chartered Bank,
10, Sansad Marg, Post Box 5,
New Delhi-110001.
2. Mr. Narender Singh
508, Near Badi Ramleela
Shahdara, Delhi-110032
............Defendants
Date of filing : 27.09.2008
Date of Institution : 29.09.2008
Date of pronouncing judgment : 29.08.2018
SUIT FOR RECOVERY OF AN AMOUNT OF RS.64550/-
(RUPEES SIXTY THUSAND FIVE HUNDRED AND FIFTY
ONLY CONSISTING OF PRINCIPAL, INTEREST AND
OTHER CHARGES DUE TO THE PLAINTIFF BANK AS
ON 31.08.2018, PAYABLE BY THE DEFENDANTS
TOGETHER WITH INTEREST PENDETELITE AND
FUTURE W.E.F 01.08.2008 AND COST OF THE SUIT
WITH INTEREST THEREON @17.75% (monthly rests)
Case No. 97385/16
SBI versus Standard Chartered Bank . Page no. 1 of 23
JUDGMENT
Vide this judgment, I shall dispose of the present suit filed by the plaintiff against defendant no.1 and 2 for recovery of Rs.64550/- (Sixty four thousand five hundred and fifty only) alongwith interest and other charges. The brief facts necessary for the disposal of the present case may be described as under:
Plaintiff's case as per the plaint:
1. It is the case of the plaintiff that the plaintiff is a body corporate constituted by the State Bank of India Act 1955. The plaintiff bank has branches throughout India and one of its branches at Service Branch, 11 Sansad Marg, New Delhi-01. It is the case of the plaintiff that defendant no.1 is a company incorporated in England with Limited Liability by Royal Chartered 1853 and its principle office is situated in United Kingdom. The defendant no.1 is the concerned branch with respect to which the present suit has been filed. The defendant no.2 has been the customer of defendant no.1 and the latter has been maintaining his bank account. The plaintiff submitted that on 18.03.2006 a demand draft bearing no. 785800 dt. 27.01.2006 apparently for Rs.70,000/- standing in the name of defendant no.2 was presented for payment with the plaintiff through defendant no.1 as collecting banker to be credited in account no.526105448731 as maintained by defendant no.1 in favour of defendant no.2. Prima facie the said demand draft Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 2 of 23 appeared to be in order and hence payment was tendered by the plaintiff with respect to the said demand draft for Rs.70,000/-.
2. The plaintiff submitted that later on, on 20.03.2006 while subjecting the said demand draft to the procedural technicalities the system of the plaintiff bank threw 'Key Mismatch', warning signal and thereafter on scrutiny of the said demand draft the following fraudulent conduct in respect of the said demand draft was revealed.
(i) the said draft was actually issued for Rs.10,000/- and the same was materially altered to appear as Rs.70,000/-.
(ii) the second signature of the drawing official with SS no.R- 3172 as appearing on the face of the draft was fictitious.
(iii) the said draft was not punched as per the bank's procedure.
3. Thus, after this revelation, the plaintiff bank immediately communicated to defendant no.1 on 29.03.2006, the said discrepancies in the demand draft and a request was made to inform the plaintiff bank with respect to the status of defendant no.2 as well as his account as maintained with defendant no.1. A further request was made to lodge appropriate police complaint pursuant to the said incident. Later on the plaintiff bank took the initiative and on 29.03.2006 lodged a complaint with the police station Parliament Street requesting to register Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 3 of 23 an FIR regarding the said incident. Subsequent to the aforesaid incident, the defendant no.1 came up with communication dt. 30.03.2006 alongwith a cashier order bearing no.004133 for Rs.23,780/- standing in favour of the plaintiff bank. It was also stated in the said letter that the defendant no.1 shall be extending its best cooperation towards recovery of the balance defrauded amount. The plaintiff submitted that in its earlier communication to the defendant no.1, the plaintiff bank had sought the whereabouts of defendant no.2 which the defendant no.1 was under an obligation to maintain as per the KYC guidelines issued by the RBI. However, the defendant no.1 chose to remain silent on that aspect and tender the refund of only part of the defrauded amount.
5. The plaintiff submitted that due to aforesaid conduct of defendant no.1, the plaintiff bank immediately lodged its protest with defendant no.1 vide its communication dt. 31.03.2006 seeking the refund of entire defrauded amount of Rs.70,000/- under the established banker's practices. As no reply was given by defendant no.1 with regard to the aforesaid communication, the plaintiff bank further issued letter on different dates to defendant no.1 seeking refund of the balance of the defrauded amount. The plaintiff submitted that defendant no.1 has been negligent in following the KYC norms Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 4 of 23 due to which the whereabouts of defendant no.2 could not be ascertained and for this reason the plaintiff was not able to institute appropriate action against defendant no.2. The plaintiff submitted that vide its communication dt. 29.05.2006, the defendant no.1 refused to refund the balance of the defrauded amount of Rs.46220/-. The plaintiff also approached the Reserve Bank of India for its intervention vide letter dt. 05.06.2006. Further vide its letter dt. 26.10.2006, the plaintiff bank requested defendant no.1 to provide complete postal address and copy of statement of account of defendant no.2 but defendant no.1 did not care to reply the said communication. A legal notice dt. 15.12.2006 was also issued to defendant no.1 seeking refund of the balance amount of Rs.46220/- alongwith interest and another notice dt. 04.07.2008 was issued to defendant no.1 by the plaintiff bank. However, no response was given by defendant no.1 to these letters. Hence the present suit for recovery has been filed against the defendants by the Plaintiff. Since defendant no.1 has failed to give the details with regard to the whereabouts of defendant no.2, according to the plaintiff there is dereliction of the duties on the part of defendant no.1 under the stipulated KYC norms for which defendant no.1 owes liability towards the plaintiff to make good the loss suffered by the plaintiff. In the plaint, the plaintiff has asked for award of the following reliefs.
Case No. 97385/16SBI versus Standard Chartered Bank . Page no. 5 of 23
(a) a decree be passed in favour of plaintiff and against defendants for a sum of Rs.64550/- jointly and severally together with interest pendente-lite and future interest @17.75% p.a with monthly rest w.e.f 01.09.2008 till realization as asked for in the Plaint.
(b) Cost of the suit be also awarded in favour of the plaintiff. Defendant's case as per the written statement
6. The defendant no.1 filed written statement to the suit of the plaintiff and raised certain preliminary objections some of which are as under:
(i)There is no cause of action in favour of the plaintiff. The present suit is without cause of action and is liable to be rejected in terms of order 7 rule 11 CPC.
(ii)It was the plaintiff who had paid the amount of the draft in question as a paying banker. The defendant no.1 only collected the amount on behalf of its customers (defendant no.2) in good faith and without negligence as a collecting banker and for this reason, the plaintiff cannot take advantage of its own mistake or wrong in paying the draft amount. Once having collected the amount of draft in question for its customer (defendant no.2) in good faith and without negligence, the defendant no.1 is protected under the provisions of section 131 of the Negotiable Instruments Act 1881 which provides protection to the collecting banker. The defendant no.1 had acted in good faith and without negligence. The payment in respect of the draft in question was collected by the defendant no.1 bank in ordinary course of business in good faith and without any negligence.
Thus, the defendant no.1 cannot be made to suffer on account of lapse and negligence of the plaintiff bank.
(iii)The plaintiff for any loss caused on account of payment of Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 6 of 23 the draft in question may have recourse only against defendant no.2 who has received the proceeds in respect of the alleged forged draft. The claim of the plaintiff against defendant no.1 is motivated and without any legal basis. The defendant no.1 already paid an amount of Rs.65640.24/- to the plaintiff after being intimated by the plaintiff about the alleged forgery. This amount of Rs. 65640.24/- at that point of time was lying in the account of defendant no.2 and therefore in the interest of the plaintiff, this amount was paid by defendant no.1 in good faith and bonafidely. After having paid the said amount, the defendant no.1 cannot be made liable to pay any other amount to the plaintiff.
(iv)As a paying banker it was an obligation of the plaintiff to scrutinized its own draft before making the payment. If the plaintiff had taken due care in clearing the said draft, the defendant no.1 would not have collected the proceeds and hence the alleged forgery might have been avoided. The alleged fraudulent payment made by the plaintiff and collected by defendant no.1 is attributable to the negligent acts of the plaintiff and not of the defendant no.1.
7. On merits the defendant submitted that the draft in question was not forged or fraudulent as the same was paid by the plaintiff, the collection by the defendant no.1 cannot be stated to be fraudulent. The defendant submitted that there was no negligence on the part of the defendant no.1. It was the duty of the plaintiff bank itself to check the genuineness of any instrument before clearing it. The defendant denied any communication to defendant no.1 on 01.02.2006 about the Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 7 of 23 discrepancy in the instrument and that a request was made on behalf of the plaintiff bank to inform about the status of defendant no.2 as well as his account maintained by defendant no.1. The defendant submitted that the officials of defendant no.1 were always in touch with the officers of the plaintiff bank and all co-operation was provided to the officials of the plaintiff bank as and when required. The defendant submitted that the amount of Rs.65,642.24/- lying in account of defendant no.2 was paid to the plaintiff bank in terms of the banking practice since the plaintiff had represented to defendant no.1 that the payment was made by them by mistake and therefore as a bonafide conduct, the defendant no.1 had paid the said amount to the plaintiff bank. The defendant denied that defendant No.1 was negligent in following the KYC norms about the whereabouts of defendant No.2 and for this reason, the plaintiff was not able to institute the appropriate action against defendant NO.2. The defendant submitted that defendant No.1 had opened the account of defendant No.2 as per RBI's guidelines and in terms of KYC norms and therefore, defendant No.1 was not negligent in following the KYC norms. The defendant submitted that defendant No.1 was always cooperative with the officials of the plaintiff bank and there was no negligence on the part of the defendant No.1. The defendant denied that the defendants are jointly and severally liable to the Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 8 of 23 Plaintiff for a sum of Rs. 24,359/- being the balance of the defrauded amount alongwith interest. Thus, in these circumstances, the defendant prayed for dismissal of the suit of the plaintiff with exemplary costs.
Replication:-
8. The plaintiff filed replication wherein it was submitted that negligence on the part of the defendant No.1 in opening the account of defendant NO.2 is apparent from the documents filed alongwith the written statement by defendant NO.1 in as much as while opening the account of defendant No.2, no introduction was obtained in that regard from an existing customer of defendant No.1 and as such there is gross non- adherence to the KYC norms on the part of the defendant No1, resulting into loss caused to the plaintiff, and therefore the defendant is under an obligation to make good the loss. The plaintiff submitted that the conduct of defendant NO.1 in making the payment of Rs. 23780/- qua the fraud committed by defendant No.2, is in fact, an admission of its liability by defendant no.1 towards the plaintiff bank and as such, defendant No1 stands liable to pay the balance amount defrauded by defendant No2 to the plaintiff bank. The plaintiff denied that the fraudulent collection of amount vide the draft in question was attributable to the negligent act of the plaintiff as alleged by defendant Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 9 of 23 No.1. Rest of the averments made in the replication are not being repeated herein for the sake of brevity. Suffice it to say that the plaintiff denied the case of defendant No.1 and reiterated its case as set out in the plaint.
9. It may be noted that no written statement was filed on behalf of defendant No. 2 and the defendant No.2 was proceeded ex- parte vide order dated 17.12.2012. ISSUES:-
10. Vide order dated 06.03.2013, out of the pleadings of the parties the following issues were framed by the court for adjudication.
1) Whether the present suit has been duly instituted by the plaintiff bank OPP.
2) Whether the defendant No. 1 is entitled for protection under the provisions of section 131 of Negotiable Instruments Act 1881? OPD
3) Whether there is any cause of action in favour of the plaintiff for filling the present suit against defendant No.1? OPD.
4) Whether the plaintiff is entitled to the decree for recovery of money as prayed for? OPP.
5) Whether the plaintiff is entitled to interest, if yes, then at what rate and for what period? OPP
6) Relief.
Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 10 of 23 Plaintiff's evidence
11. In order to prove its case, the plaintiff's side got examined two witnesses. PW-1 was Sh. K.D. Aggarwal, AGM, State Bank of India, Service Branch, New Delhi who tendered his evidence by way of affidavit which is Ex. PW1/A and he relied upon documents Ex. PW1/1 to Ex. PW1/18 as mentioned in the evidence by way of affidavit, the details of which are as under :-
a) General Regulations No. 76 and 77 Ex. PW1/1
b) Notification in the Gazette of India dated 27.03.1987 Ex.PW1/2
c) Demand draft bearing No. 785800 dated 27.01.2006 Ex.
PW1/3.
d) Communication vide letter dated 29.03.2006 as Ex. PW1/4 e) Complaint dated 29.03.2006 Ex. PW1/5 f) Letter dated 30.03.2006 as Ex. PW1/6 g) Letter dated 31.03.2006 Ex. PW1/7 h) Letter dated 29.04.2006 Ex. PW1/8 I) Letter dated 11.05.2006 Ex. PW1/9 j) Letter dated 20.05.2006 Ex. PW1/10. k) Letter dated 29.05.2006 Ex. PW1/11 l) Letter dated 05.06.2006 Ex. PW1/12 m) Letter dated 26.10.2006 Ex. PW1/13 n) Letter dated 15.12.2006 Ex. PW1/14 o) Legal notice dated 15.12.2006 Ex. PW1/15 p) Letter dated 22.12.2006 Ex. PW1/16 q) FIR NO. 5/2007 dated 11.01.2007 Ex. PW1/17 r) Legal notice dated 04.07.2008 Ex. PW1/18.
PW-2 was Sh. Anil Mattoo, Branch Manager, SBI who was a Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 11 of 23 summoned witness and he also relied upon Ex. PW-2/A (OSR).
Thereafter on conclusion of cross examination of plaintiff's witnesses, vide order dated 18.07.2016, PE was closed. Defendant's evidence :-
12. To disprove the case of the plaintiff, one witness was got examined on behalf of defendant No.1. D1W1 was Ms. Neeru Samson, who tendered her evidence by way of affidavit which is Ex. D1W1/A and she relied upon documents mark A, mark B, Ex. D1W1/3 and Ex. D1W1/4 the details of which are as under :-
Mark A copy of account opening form alongwith driving license of defendant No. 2.
Mark B. Statement of account of defendant NO.2 Ex. D1W1/3 is letter dated 20.03.2006.
Ex. D1W1/4 is reply dated 27.01.2006.
Thereafter on conclusion of cross examination of Defendants witness, vide order dated 01.07.2017, DE was closed.
Findings:-
13. I have heard the arguments made by the counsels for the parties and have also perused the case record in detail on the basis of evidence/ material available on record. The issues wise findings of this court are as under :-
Issue no.1 :-
Whether the present suit has been duly instituted Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 12 of 23 by the plaintif bank OPP.
14. The onus to prove this issue is on the Plaintiff. The present suit was filed/instituted on behalf of the Plaintiff Bank by Sh. S.K. Chopra the then Chief Manager of the Plaintiff Bank. Order 29 rule 1 provides that in suits by or against a corporation any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case. Ex. PW-1/1 is the General regulation no. 76 and 77 of the State Bank of India and Ex. PW-1/2 is the notification published in Gazette of India dated 27.03.1987 through which the said Sh. S.K.Chopra was competent to institute , sign , verify and institute the present suit on behalf of the Plaintiff. These facts have been reiterated by PW-1 in his evidence by way of affidavit. No contrary evidence has been placed on record on behalf of the defendant to disprove these facts. Accordingly, in the considered opinion of this court, the present suit has been duly instituted by the Plaintiff bank and as such the present issue is decided in favour of the Plaintiff Bank. Issue no.2 :-
Whether the defendant No. 1 is entitled for protection under the provisions of section 131 of Negotiable Instruments Act 1881? OPD
15. It is the case of the Plaintiff that on 18.03.2006 a demand Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 13 of 23 draft bearing no. 785800 dated 27.01.2006 apparently for Rs 70,000/- standing in the name of defendant no.2 was presented for payment with the Plaintiff through defendant no.1 as collecting banker to be credited in account of defendant no.2.
As the said demand draft Prima facie appeared to be in order payment was tendered by the Plaintiff with respect to the said demand draft for Rs 70,000/- . Later on, on scrutiny certain technical defects were found in the said demand draft and it was realized that the said demand draft was actually issued for Rs 10,000/- and the same was materially altered to appear as Rs.70,000/-. The Plaintiff Bank immediately communicated these facts to defendant no.1 and thereafter various communications were exchanged between the Plaintiff and defendant no.1 in this regard. According to the Plaintiff defendant no.1 has been negligent in following the KYC (Know your Customer) norms pursuant to which the whereabouts of defendant no.2, the fraudster could not be ascertained and the Plaintiff was not able to institute appropriate action against defendant no.2. The defendant no.1 only refunded Rs 23,780/- vide cashier order number 004133 to the plaintiff Bank and refused to refund the balance defrauded amount of Rs 46,220/-, hence both the defendants are jointly and severally liable to pay this amount to the Plaintiff Bank alongwith interest and the total amount thus comes to Rs 64,550/-.
Case No. 97385/16SBI versus Standard Chartered Bank . Page no. 14 of 23
16. On the other hand it is the case of the defendant no.1 that defendant no.1 only collected the amount on behalf of its customer i.e. defendant no.2 in good faith and without negligence as a collecting banker and therefore the Plaintiff cannot take advantage of its own mistake or wrong in paying the proceeds. The defendant once having collected the amount of the draft in question for its customer (defendant no.2) in good faith and without negligence of any nature is protected under the provisions of section 131 of the Negotiable Instruments Act 1881, which provides protection to the collecting banker. The defendant has acted in good faith and without negligence. The payment in respect of the draft in question was collected by defendant no.1 in ordinary course of business in good faith and without any negligence.
17. Section 131 of the Negotiable instruments Act 1881 may be reproduced as under:-
131. Non-Liability of banker receiving payment of cheque.- A banker who has in good faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment.
Explanation II appended to the said section provides that:- It shall be the duty of the banker who receives Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 15 of 23 payment based on an electronic image of a truncated cheque held with him, to verify the prima facie genuineness of the cheque to be truncated and any fraud, forgery or tempering apparent on the face of the instrument that can be verified with due diligence and ordinary care.
By virtue of section 131 A of the NI Act , the said provision contained in section 131 applies to a case of 'demand draft' also " as if the draft were a cheque".
18. In the case of ' Axis Bank v. Punjab National Bank'1, the Hon'ble Delhi High Court observed that:- section 131 is a protection meant for a collecting bank. Since a collecting bank generally acts as an agent of its customer , it is not expected to take a direct responsibility for the negotiable instruments deposited with it for presentation to the bank on which it is drawn. Nonetheless , it is expected to be vigilant against forgery or attempts to deceive or defraud. In order to show that the collecting bank acted in good faith and was not negligent, it must be in a position to confirm the genuineness of the identity of the customer on whose behalf it purports to collect. Generally, speaking such scrutiny of identity of the customer would be undertaken when his request for account to be opened is entertained. Though the second explanation to section 131 relates to cheques presented electronically , it provides some guidance as to the extent of scrutiny of the 12015 SCC Online Del 8287: (2015) 2 BC 390 (DB), WP ( C) 6201/2014 ,decided on 20.03.2015.
Case No. 97385/16SBI versus Standard Chartered Bank . Page no. 16 of 23 negotiable instrument presented through it. To fasten the responsibility for cheating on account of fabrication , the forgery or tempering must be such as can be detected from the face of the instrument by applying ordinary care and diligence. The onus of proving, "good faith" and "absence of negligence" has to be on the banker claiming such a protection. The principles governing the liability of a collecting banker were discussed in that case as under:-
a) As a general rule the collecting banker shall be exposed to his usual liability under common law for conversion or for money had and received , as against the true owner of a cheque or draft, in the event the customer from whom he collects the cheque or draft has no title or defective title.
b) the banker may however claim protection from such normal liability provided he fulfills strictly the condition laid down in section 131 or section 131 A of the Act and one of those conditions is that he must have received the payment in good faith and without negligence.
c) it is the banker seeking protection who has on his shoulders the onus of proving that he acted in good faith and without negligence.
d) the standard of care to be exercised by the collecting banker to escape the charge of negligence depends upon the general practice of bankers which may go on changing from time to time with the enormous spread of banking activities and cases decided a few decades ago may not probably offer an unfailing guidance in determining the question about negligence today.
e) Negligence is a question of fact and what is relevant in determining the liability of a collecting banker is not his Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 17 of 23 negligence in opening the account of the customer but negligence in the collection of the relevant cheque unless of course the opening of the account and depositing the cheque in question therein form part and parcel of one scheme as where the account is opened with the cheque in question or deposited therein so soon after the opening of the account as to lead to an inference that the depositing of the cheque and opening the account are inter-connected moves in an integrated plan.
f) Negligence in opening the account such as failure to fulfill the procedure for opening an account which is prescribed by the bank itself or opening an account of an unknown person or non-
existing person or with dubious introduction may lead to a cogent, though not conclusive proof of negligence particularly if the cheque in question has been deposited in the account soon after the opening thereof.
g) The standard of care expected from a banker in collecting the cheque does not require him to subject the cheque to a minute and microscopic examination but disregarding the circumstances about the cheque which on the face of it give rise to a suspicion may amount to negligence on the part of the collecting banker.
19. Thus, if the aforesaid legal principles as laid down by the Hon'ble High Court of Delhi are applied to the facts and circumstances of the present case, it becomes clear that the defendant no.1 is entitled for the protection under the provisions of section 131 of the NI Act. PW-1 admitted in his cross examination that on realizing the amount in the draft, the genuineness of the draft is checked. He admitted that the draft Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 18 of 23 in question was also checked before its payment. No such circumstance has been brought on record on behalf of the Plaintiff which may suggest that the forgery or tempering with the draft in question was such as can be detected from the face of the instrument by applying ordinary care and diligence. Further there seems to be no immediate connection between the opening of account by defendant no.1 and depositing the cheque in question with the Plaintiff. In his cross examination D1W1 stated that the account of defendant no. 2 only remained operative hardly for one year and thereafter it was closed and there had been no further transactions in the account. Ex. D1W1/3 i.e. Letter dated 20.03.2006 written by the Plaintiff bank to defendant no,.1 bank, shows that it was stated by the Plaintiff that the draft in question appeared to be prima facie genuine to the naked eye and for this reason it was not retuned unpaid. Further when vide the said letter dated 20.03.2006, the factum of wrong payment was brought into the notice of defendant no.1 by the Plaintiff, through its letter (Ex. D1W1/4), showing their regret to the incident, the defendant no.1 in response of the demand for refund of Rs 70,000/- by the Plaintiff held up the amount of Rs 23,780/- lying in the account of defendant no.2. Defendant no.1 also assured their co-operation to the Plaintiff. Later this amount was paid to the Plaintiff as shown by Ex. PW-1/6.Thus these circumstances suggest, that Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 19 of 23 defendant no.1 was not negligent but acted in good faith in the ordinary course of business for collecting the draft in question for their customer defendant no.2 and as such in the considered opinion of this court , defendant no.1 is entitled to the protection for the provisions of section 131 of the Negotiable instruments Act 1881. Consequently the present issue is decided in favor of defendant no.1 for the said reasons. Issue no.3:-
Whether there is any cause of action in favour of the plaintif for filling the present suit against defendant No.1? OPD.
20. The onus to prove this issue is on the defendant. Since, in the earlier issue no.2 , it has already been held that defendant no.1 is entitled to the protection for the provisions of section 131 of the Negotiable instruments Act 1881. The defendant no.1 was not negligent but acted in good faith in the ordinary course of business for collecting the draft in question for their customer defendant no.2. For these reasons, in the opinion of this court , the defendant no.1 cannot be held liable to pay the amount of Rs 64,550/- as prayed by the Plaintiff. Thus, no cause of action arose in favour of the Plaintiff bank against defendant no.1. Consequently this issue is decided in favour of defendant no.1 for the said reasons.
Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 20 of 23 Issue no.4:-
Whether the plaintif is entitled to the decree for recovery of money as prayed for? OPP.
And Issue no.5:-
Whether the plaintiff is entitled to interest, if yes, then at what rate and for what period? OPP
21. For the sake of convenience both these issues are being taken up together as they are inter-connected and the onus to prove the same is on the Plaintiff. The evidence placed on record on behalf of the Plaintiff reveal that the draft in question was manipulated and materially altered and thus the proceeds of the same were wrongly credited in the account of defendant no.2 and was encashed by him. Ex. PW-1/5 and Ex. D1W1/3 corroborate the same. Ex. PW-1/4 shows that a complaint/application was made by the Plaintiff to the concerned SHO for registration of FIR regarding alteration of the amount of the draft from Rs 10,000/- to Rs 70,000/-. Ex. PW-
1/14 shows that a request to register the FIR for fraud of Rs 70,000/- was also made by the Plaintiff to the SHO concerned. Ex. PW-1/17 shows that an FIR no. 05/07 was registered in the said matter. Ex. PW-1/6 reveals that only Rs 23,780/- could be recovered by the Plaintiff. Thus, Rs. 46,220/- are yet to be recovered by the Plaintiff out of the total amount of Rs 70,000/-, which along with interest comes to Rs 64,550/-. In these circumstances, this court is of the view that the defendant no.2 Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 21 of 23 has unjustly enriched himself with the money belonging to the Plaintiff bank and thus is liable to make good the loss caused to the Plaintiff. Hence, in the opinion of this court , the Plaintiff has been able to prove its case against defendant no.2 on the basis of preponderance of probabilities and the defendant no.2 is thus held liable to pay the amount of Rs 64,550/- to the Plaintiff Bank as asked for in the Plaint. The Plaintiff has asked for award of interest @ 17.75% per annum. However, awarding the interest at this rate does not seem to be just and reasonable in the facts and circumstances of the present case. As defendant no.2 has unjustly enriched himself with the money belonging to the Plaintiff bank, the Plaintiff bank is also held entitled to recover Pende-lite interest @ 12% per annum from defendant no.2 on the said amount of Rs 64,550/-. Considering the provisions of section 34 CPC, ends of justice would be served by awarding future interest @ 6% per annum from the date of decree till realization of the said amount by the Plaintiff. In the interest of justice, the Plaintiff is also held entitled to the cost of the suit as per rules.
Relief:
Consequently , the suit of the Plaintif is decreed against defendant no.2 only. The Plaintiff is held entitled to the following reliefs:-Case No. 97385/16
SBI versus Standard Chartered Bank . Page no. 22 of 23
1. The defendant no.2 is held liable to pay the amount of Rs 64,550/- to the Plaintif Bank as prayed for in the Plaint.
2. The Plaintif bank is also held entitled to recover Pende-lite interest @ 12% per annum from defendant no.2 on the said amount of Rs 64,550/-.
3. Considering the provisions of section 34 CPC, the Plaintif is also held entitled to recover future interest @6% per annum from the date of decree till realization of the said amount by the Plaintif.
4. Cost of the suit as per rules.
With these observations , the present suit is disposed of. Decree sheet be prepared accordingly in favour of the Plaintiff.
File be consigned to record room after due compliance. Digitally signed by FAHAD
FAHAD UDDIN
UDDIN Date:
2018.09.04
16:45:36 +0530
(Fahad Uddin)
CJ-04, Central,THC/Delhi
Announced in the open Court on this 29th day of August, 2018 This judgment consists of 23 signed pages.
Case No. 97385/16 SBI versus Standard Chartered Bank . Page no. 23 of 23