Madras High Court
Canara Bank, Represented By The ... vs Arulmighu Meenakshi Sundareswarar ... on 28 November, 2006
Author: G. Rajasuria
Bench: G. Rajasuria
JUDGMENT G. Rajasuria, J.
1. The unsuccessful defendant appeals.
2. The facts giving rise to the filing of this original suit as stood exposited from the averments in the plaint would run thus:
The deceased Vellaichamy had in his possession a fixed Deposit for Rs. 22,000/- issued by the defendant Bank. Before his death, he made an endorsement on the F.D, to the effect that the amount therein should go to the deity of the plaintiff's temple and it was dropped into the hundial by the said Vellaichamy himself. The temple authorities who came into the possession of such F.D. after opening the hundial, found that the date of maturity of the fixed deposit was 15.05.1986. The plaintiff also informed the defendant Bank about it and also sent a letter to that effect on 25.02.1982.
3. One Gandhi, son of Sadaiyapillai sent a petition dated 09.02.1982 to the plaintiff requesting for the return of the Fixed Deposit on the ground that the said F.D. Amount, represents the fund of the joint family of which Gandhi was also a member. The plaintiff after maturity date of the said F.D. sent a registration letter dated 18.07.1986 to the defendant requesting it for paying the dues under the F.D. for which the Bank sent a reply also. The dues under the F.D were given to the deceased Vellaichamy's wife and his mother based on the succession certificate produced by them even though they did not produce the original F.D. However, the Bank obtained security from them before releasing the amount. Hence, the suit.
4. Per contra, denying and disputing, challenging and gainsaying the averments in the plaint, the defendant filed the written statement with the averments inter alia which could be portrayed thus:
The Bank did not receive any communication dated 25.02.1982 from the plaintiff. Chellammal, the wife and Kamuammmal, the mother of Vellaichamy, obtained the amount from Bank on producing succession Certificate in addition to having furnished security for not producing the original F.D.R. As such the Bank discharged its obligation as per law and accordingly the Bank prayed for the dismissal of the suit.
5. Based on the above pleadings, the trial Court framed various issues.
6. During trial, on the side of the plaintiff, P.W.1 was examined and Exs.A.1 to A.15 were marked. On the side of the defendant, D.W.1 was examined and Exs.B.1 to B.11 were marked.
7. The trial Court ultimately decreed the suit.
8. Being aggrieved by the said judgment and decree of the trial Court, the plaintiff Bank preferred this appeal on the following grounds among others:
i) The judgment and decree of the trial Court is against, weight of law and all probabilities of the case.
ii) The lower Court lost sight of the fact that the F.D. dated 16.02.1981 was not transferable. Even in case of assigning, there should be intimation to the Bank relating to such assignment. In this case there was no transfer and there was no assignment and there was also no direction to the Bank.
iii) The plaintiff failed to prove the endorsement and the signature in the F.D.
iv) The trial Court wrongly held that the burden of proof was on the appellant/defendant to prove that the signature in Ex.A.2 was not that of Vellaichamy.
v) The lower court failed to note that the appellant/defendant on production of Succession Certificate by the heirs of the Vellaichamy, it paid the amount to them. The respondent/plaintiff did not take steps to revoke the succession certificate given by the Court in favour of the legal heirs of the Vellaichamy. The suit was bad for non-joinder of legal heirs of Vellaichamy.
Vi) The trial Court failed to take into account the protection given to the Bank under Section 386 of the Indian Succession Act in this case.
vii) The plaintiff failed to prove that Vellaichamy had dropped F.D. in the hundial. For assigning the F.D, no stamp was affixed.
viii) Gandhi, the brother of the deceased Vellaichamy might have taken that F.D, from the bouse of Vellaichamy and put into the hundial. The trial Court failed to appreciate the evidence on record. Accordingly, the appellant prayed for dismissal of the suit.
9. The points for consideration are:
(i) Whether the deceased Vellaichamy before his death made an endorsement on the F.D. concerned and signed it and put it into the hundial of the plaintiff's temple?
(ii) Whether the defendant bank was justified in its plea that it released the amount even without insisting for the original by merely based on the succession certificate issued by the Court?
(iii) Whether there is any infirmity in the judgment and decree of the trial Court?
10. The parties are referred to hereunder according to their litigative status before the trial Court.
11. Point Nos. (i) and (ii) are taken together for discussion in view of the fact that they are interwoven and inter-linked with each other. Point Nos:(i) and (ii)
12. A 'resume' of facts absolutely necessary for the disposal of this appeal would run thus:
The deceased Vellaichamy dropped Ex.A.2, the Fixed Deposit receipt issued by Canara Bank in his name after endorsing thereon that the amount contemplated thereunder belonged to the deity, into the hundial of the plaintiff's temple. The amount, according to him, should go to the deity of the plaintiff's temple. The plaintiff's temple on opening the hundial on 29.12.1981, found the said Fixed Deposit receipt and allegedly informed the Canara bank concerned.
13. However, the said Vellaichamy set himself ablaze to death ignobly on 23.11.1981 itself. The brother of the deceased, Gandhi made a claim over the Fixed Deposit amount by petitioning the Canara Bank. Meanwhile, the legal representatives of the deceased also approached the Bank for getting the dues under the Fixed Deposit. The bank had thrown point blank on the issue that the succession certificate was absolutely necessary for the release of the Fixed Deposit amount. The wife and the mother of the deceased obtained the succession certificate as in Ex.A.14 and on the strength of it, after executing security bond as in Ex.B.8 in favour of the Bank relating to the non-production of the original Fixed Deposit, the wife and the mother of the deceased obtained the dues under the Fixed Deposit receipt. However, the plaintiff after maturity date as found in Fixed Deposit approached the Bank for the release of the amount. Thereupon, to the surprise of the plaintiff, it was found that the amount was already released by the Bank in favour of the wife and the mother of the deceased.
14. The learned Counsel for the defendant Bank would mainly focus his line of argument on the ground that Canara Bank being a nationalised Bank, without any malafide intention but in good faith, in all fairness, acted on the strength of the succession certificate and that too after obtaining the security bond; if at all, the plaintiff has any claim over the Fixed Deposit, it is open for the plaintiff to proceed as against the wife and the mother of the deceased for recovering the dues; in any event, the very dropping of the Fixed Deposit by the deceased into the hundial with such an endorsement referred to above, would not tantamount to any transfer of the right in the Fixed Deposit of Vellaichamy in favour of the plaintiff as in Ex.A.2, itself, it is found printed clearly and visibly, categorically and unambiguously, unequivocally and apparently that the Fixed Deposit was not transferable; in any event, the plaintiff had slept over the matter and thereby attracted the principle of "Vigilantibus non dormientibus jura subveniunt" and that it cannot try to fasten the Bank with liability.
15. Both sides cited decisions relating to the point as to whether the Fixed Deposit receipt could simply be transferred or not, in the way that had been done by the deceased Vellaichamy.
16. The learned Counsel for the plaintiff would cite the decision of the Honourable Madras High Court in Brahmayya & Co. v. Thangavelu reported in 1956 Madras 570 : AIR V 43 C 175 Oct. to the effect that the assignment of the Fixed Deposit receipt could be made without adhering to any form and what is required is only the intention to transfer which should be explicit. An excerpt from the above said decision would run thus:
(19) This contention of Mr.Srinivasa Aiyar also appears to me to be opposed to rule and principle. Under Section 130. Transfer of Property Act, title passes to and vests in the assignee or transferee on the execution of the transfer deed, and, no further action on his part such as sending a notice to the debtor as under the English Law, is necessary to complete his title. Vide Subramania Aiyar v. Ramasubba Ayyar, 1935 Mad 1003 : AIR V 22 (C).
17. The learned Counsel for the defendant / appellant would expatiate that the cited judgment is only on the point that such transfer would be valid only on the Bank being informed about it.
18. The perusal of the aforesaid judgment does not convey any such meaning. No doubt, only when the Bank having been put on notice, it would be able to know about the transfer. But, such a notice is not "sine qua non" for the validity of the transfer and in such view of the matter, the argument of the learned Counsel for the defendant/appellant cannot be countenanced as correct.
19. Section 130 of the Transfer of Property Act, has been referred to in the decision cited, whereby there is a specific finding by the Court that no notice to bank is necessary for giving validity to such transfer. The cited decision still governs the field and no contrary decision has been cited at the Bar so as to take a view other than the view taken by this Court in that decision.
20. The learned Counsel for the plaintiff also cited the decision of the Honourable Apex Court in Canbank Financial Services Ltd., v. The Custodian to the effect that the property in the goods passes from the owner to the other by mere delivery of possession as per Section 4 of the Sale of Goods Act. This judgment is cited out of context as Fixed Deposit is covered under Section 130 of the Transfer of Property Act; such a transfer would not amount to transfer of moveable property under the Sale of Goods Act.
21. The learned Counsel for the plaintiff also cited the decision of the Honourable Madras High Court in Ramaswamy Chettiar v. Manickam Chettiar reported in AIR 1938 Madras 236 to the effect that for transfer of assignment of actionable claim under Section 130 of the Transfer of Property Act, no particular form or consideration is required and it is enough if the intention to transfer is clear. The first cited judgment of Honourable Madras High Court is almost in concinnity with this decision.
22. However, the learned Counsel for the defendant / appellant in his written submissions referred to various decisions at page No. 50 at paragraph No. 3 as follows:
(a) Likewise to enforce a legally made assignment, under law, "a notice of assignment should be given to the debtor at least sometime before the amounts covered under the fixed deposit receipt is dealt with by the debtor".
(b) As has been held by the Patna High Court in a case Tata Iron & Steel Co., v. Vaidyanath reported in AIR 1924 Patna Page 118, The assignment is not however valid as against the debtor until he, in fact, as notice of the assignment and therefore, any payment by the debtor of the deed due from him to his original creditor is valid as against the assignee until notice of assignment is given.
(c) Our Madras High Court in a case Burma Shell Oil Storage & Co. v. Official Receiver, Tinnevelly and reported in AIR 1943 Madras 244, 1942 - 2 MLJ 661 has held that, A debtor cannot after notice of the assignment pay a portion of the debt even under the court's order in a case to which the assignee was not a party, so as to protect him from paying it over again to the assignee.
23. The aforesaid written submissions are not at all tenable and the decisions referred to above are not at all relevant to this case in view of the clear decision of the Honourable Madras High Court reported in 1956 Madras 570 : AIR V 43 C 175 Oct. supra and no more elaboration is required. In the written submissions, the learned Counsel for the appellant/defendant referred to various other decisions relating to assignment and to the risk of repetition, I have to state that those are all not germane in the wake of the decision already relied on by me in deciding this matter.
24. The learned Counsel for the appellant/ defendant cited the decision in Rajeshwari Debi v. Mohan Bikram Sah reported in AIR (32) 1945 Allahabad 409. An excerpt from the said judgment would run thus:
A fixed deposit is not a deposit of specie but a debt or an actionable claim and a transfer of the same can only be made by an instrument in writing signed by the transferor. Section 130 is the proper section. The making of a gift of a fixed deposit in a bank is not the making of a gift of moveable property but is the gift of an actionable claim. The handing over of the fixed deposit receipt would not be enough, but it will be necessary to have a document in writing signed by the transferor.
25. However, subsequent to the said decision, as I have already highlighted above, this Court in the year 1956 held that the fixed deposit receipt could rightly be transferred from one person to another without adhering to any form and that implies also that no stamp duty is required.
26. The learned Counsel for the appellant/defendant cited the decisions in Subbaraj v. Suryanarayana , Burmah-Shell Oil Storage and Distributing Company of India Limited, Madras v. Official Receiver, Tinnevelly reported in 1942 (2) MLJ 661 and Sri Yerri Swami v. Chinna Vannurappa reported in 1948 (2) MLJ 254 and in view of the judgment already highlighted supra, these are not at all germane for adjudication.
27. The learned Counsel for the appellant / defendant would try to canvass his point that there was no stamp duty paid on such transfer of fixed deposit. Before adverting to the substantial point relating to stamp duty, instead by the learned Counsel for the appellant, on one other point, such Court fee issue could be rejected so to say before marking Ex.A.1 during the trial, no such objection was raised. As per Section 36 of the Stamp Act, if once the un-stamped document is marked, its validity on that count cannot be questioned subsequently. However, I also proceed to decide as to whether for transfer of such fixed deposit, stamp duty is required or not. On the fixed deposit itself, the deceased made an endorsement, assigning the amount in favour of the deity. On the back of the fixed deposit, there is a column for affixing revenue stamp, but that is only meant for affixing the stamp at the time of receiving the amount due under the fixed deposit and not for transfer.
28. The learned Counsel for the appellant / defendant himself would refer to the exemptions contemplated as per Article 62 under Schedule I of the Indian Stamp Act, 1899, which reads thus:
Transfers by endorsement - (a) of a bill of exchange, cheque or promissory note; (b) of a bill of lading, delivery order, warrant for goods or other mercantile document of title to goods; (c) of a policy of insurance; (d) of securities of the Central Government.
29. The learned Counsel for the appellant / defendant would contend that the fixed deposit is not a promissory note or bill of exchange or any other document contemplated under the exemptions and hence, Ex.A.1 ought to have been stamped at the time of transfer.
30. The learned Counsel for the appellant / defendant has not cited any specific article under which for transfer of fixed deposit by making endorsement thereon, any stamp duty is required.
31. Under the said Article 62 relating to transfer, various types of transfers are contemplated, but the fixed deposit receipt is not the one which is contemplated therein. It is a trait proposition of law that financial statutes should be interpreted strictly and not against the tax payer. As such in the absence of any specific provision in the Indian Stamp Act, it would not be open for anyone to insist that for transfer of fixed deposit, there should be levy of stamp duty.
32. In this case, the deceased Vellaichamy with the intention that the fixed deposit amount should go to the deity, made an endorsement and put it into the hundial and in such a case, there was a valid transfer of interest in favour of the deity relating to the amount contemplated therein and Ex.A.1, the register concerning the hundial also would evidence the fact that Ex.A.2, the fixed deposit receipt was found in the hundial.
33. The learned Counsel for the plaintiff would contend that the Bank had no notice of such original fixed deposit being with the plaintiff at the time of releasing the amount in favour of the wife and the mother of the deceased Vellaichamy based on the succession certificate. One important fact should be taken note of that the bank was expected to insist for the original.
34. Section 381 of the Indian Succession Act contemplates that the debtor or other person liable to pay the amount would be protected if he paid the amount in good faith based on such succession certificate. But, nowhere it is contemplated under the law that the party who obtained the succession certificate from the Court is exonerated from the duty of producing to the debtor necessary evidence relating to the debt and the debtor also is not prevented from demanding the holder of the succession certificate to produce necessary evidence relating to the debt. In the succession certificate as in Ex.A.14, only the particulars of the fixed deposit is found mentioned, bereft no other details.
35. In fact, presumably and understandably, inferably and probably, the bank understanding the legal position that what the bank was doing in releasing the amount in favour of the wife and the mother of the deceased without their producing the original fixed deposit to bank, thought it fit to get the indemnity bond executed in its favour. The recitals in the indemnity bond as in Ex.B.8, would amply demonstrate that if someone else makes rival claims to that amount on producing the original fixed deposit receipt and gets the money due from the bank, then the Bank should have the right to proceed as against the wife and the mother of the deceased for recovering the equivalent amount by way of getting reimbursement.
36. In fact, in this case, the same situation occurred as contemplated and visualised, foreseen and forethought by the bank. In such a case, there is no question of the bank contending that it is not at all liable to pay to the plaintiff.
37. The defendant bank having taken that much care to obtain specifically the indemnity bond as in Ex.B.8, should have pressed into service Order VIII-A of the Code of Civil Procedure relating to third party procedure. The bank would contend that the plaintiff should have added the wife and the mother of the deceased as parties. At this juncture, it is worthwhile to refer to the maxim "let the accuser be free from accusation." While the bank raises its accusative finger as against the plaintiff as to why it did not add those persons as defendants, the bank should ask itself as to why the bank had not informed the third party procedure as contemplated under Order VIII-A of the Code of Civil Procedure. The plaintiff is only concerned with the bank and not in any way concerned with the legal representatives of the deceased.
38. Inasmuch as the plaintiff cannot be found fault with, the suit cannot be stated to be bad for the non-joinder of necessary parties.
39. The learned Counsel for the appellant / defendant would contend that there were lapses on the part of the plaintiff in not informing the bank about the fixed deposit and that the original of the notice as in Ex.A.4, dated 25.02.1982, was not received by the defendant bank. Whereas P.W.1 the official of the temple would contend that the notice was sent without any acknowledgment due. To prove the factum of the receipt of Ex.A.4 by the bank or the despatch of the original of Ex.A.4, there is no evidence and on that only, it cannot be held that the plaintiff did not send the notice as in Ex.A.4.
40. However, Exs.A.3 and A.7 should be scrutinised in the light of deposition of D.W.1, the bank official. Ex.A.3, is the original letter sent by one Gandhi, the brother of the deceased Vellaichamy to the plaintiff claiming that the fixed deposit amount should be given to him and that such F.D, emerged out of the joint family funds.
41. Further, in Ex.A.3, at the end, he also specified that the copy of such notice was sent to Canara Bank, Head Office as well as the defendant bank at Sholavandan. Relating to this letter also, the defendant bank would take the plea that such a letter was not received by them and the fact remains that there is no acknowledgment to show that the copy of Ex.A.3 was sent to Canara bank. However, Ex.A.7, the reply given by Canara Bank would refer to generally a letter of Gandhi which was received by Canara Bank Head Office at Bangalore and for which Canara Bank at Sholavandan replied by stating that they were not aware of the contents of the letter sent to the Canara Bank, Bangalore.
42. On the plaintiff's side, it was contended that only for Ex.A.3, the reply as in Ex.B.3, was given and the Bank Official, D.W.1 also admitted that fact during cross-examination. A perusal of the cross-examination of D.W.1, would show that he admitted that Ex.B.3 was reply to Ex.A.3. Understanding that D.W.1's answer as above was against the interest of the bank, learned Counsel for the bank got an answer to that effect during re-examination that no copy of Ex.A.3 was received by the Bank. Even then, despite such re-examination, there is nothing to show that Ex.B.3 was not an answer to Ex.A.3.
43. It is one thing to say that the copy of Ex.A.3 was not received and yet another to say that Ex.B.3 was an answer to Ex.A.3. The preponderance of probabilities would govern the adjudication in civil cases. Not only the wife and the mother of the deceased approached the bank for release of the amount, but the said Gandhi also approached the Bank even before the release of the amount. The said Gandhi at the earliest point of time as in Ex.A.3 claimed the amount from the plaintiff, in such a case, common sense warrants that in all probabilities, Gandhi would have communicated the fact of the plaintiff having been possession of the fixed deposit to the Bank and the Bank also in the process of dealing with this matter might have had knowledge of the fixed deposit being with the plaintiff. Simply because, the acknowledgments or evidence of despatch are not available relating to Ex.A.3 and A.4, the bank cannot take shelter.
44. At any rate, the Bank could be fastened with liability on one another consideration also. Before releasing the amount, the bank was fully aware of the fact that there were two clear rival parties so to say on the one side, the said Gandhi and on the other side, the wife and the mother of the deceased. As per Ex.B.3, the Bank informed Gandhi to produce the succession certificate, but only the wife and the mother of the deceased produced the succession certificate without producing the fixed deposit receipt and in such an eventuality, the bank was duty bounded to contact the said Gandhi about his name found missing in the succession certificate or about his claim whether he dropped it or not, etc. The bank cannot say that it was not its duty. It had became all the more importance for the bank to conduct such a small and simple enquiry and that too when it had decided to release the amount in the absence of production of the original fixed deposit receipt.
45. The learned Counsel for the plaintiff also read out certain portions in the deposition of D.W.1 during cross-examination to the effect that for the wife and the mother of the deceased, one Congress M.L.A took initiative and got money in their favour. Be that as it may, the bank in view of having failed to be alert and vigilant in dealing with the matter as visualised by this Court supra, it should be made liable and it is open to the bank to get the amount reimbursed for having released the amount in favour of the legal representatives of the deceased and the Court cannot drive the plaintiff who is entitled to the amount under the fixed deposit to file a suit and recover the amount.
46. Hence, Point Nos. (i) and (ii) are decided accordingly as against the appellants.
Point No:(iii)
47. In view of the ratiocination adverted to by me above for deciding the aforesaid points, I could see no infirmity in the ultimate conclusion arrived at by the trial Court and accordingly, the judgment and decree of the trial Court is confirmed.
48. In the result, the appeal is dismissed by confirming the judgment and decree of the Subordinate Judge, Madurai, in O.S. No. 57 of 1987, dated 31.01.1990. However, in the facts and circumstances of the case, there is no order as to costs in this appeal.