Delhi District Court
Branch Office At: vs M/S Virender Book Binding on 10 May, 2014
IN THE COURT OF SH SUNIL KUMAR AGGARWAL: ADDL. DISTRICT
JUDGE (CENTRAL) 10: DELHI
Suit No. 92/10
Bank of India,
Having its head office at:
Bandra Kurla Complex,
Andheri East, Mumbai.
Branch office at:
Ansari Road, Darya Ganj,
New Delhi. ....Plaintiff
VERSUS
1. M/s Virender Book Binding,
1/10302, Gali No. 1, West Gorakhnath Park,
Shahdara, Delhi110032.
2. Mrs. Sunita Sharma,
(Proprietor of M/s Virender Book Binding)
1/10302, Gali No. 1, West Gorakhnath Park,
Shahdara, Delhi110032. .....Defendants
Plaint presented on 21.07.2010
J U D G M E N T:
1. Plaintiff, a nationalized bank, has filed this suit for recovery through Sh. Arvind Sharma, Senior Manager stating that defendant no. 1 is a proprietorship concern of defendant no. 2 and has been maintaining a current account no. 603220110000162 with plaintiff. During the course of its operation, the plaintiff had granted temporary overdraft facility to the tune of Rs. 6 lacs in the said current Suit No. 92 of 2010 Page No. 1 of 9 account on oral request of defendant no. 2 by clearing a cheque no. 000012 dated 20.04.2009 issued by her in the name of M/s Sagat Enterprises. At the time of availing the financial facility, defendant no. 2 had assured to pay the over draft amount together with interest accrued thereon at prevailing rate, within a short period. The defendants however failed and neglected to clear the outstanding amount leading the plaintiff to send legal notice dated 04.06.2010 which remained in complied. It is stated that the defendants are liable to pay interest @ 16.25% per annum on the overdue amount as per RBI guidelines. A sum of Rs. 99.497/ towards interest has accrued against the defendant therefore the suit for recovery of Rs. 6,99,497/ with pendentlite and future interest @ 16.25% per annum with monthly rests, has been filed.
2. The defendants have contested the suit by filing written statement wherein the plea of suit suffering from lack of cause of action has been made. It is alleged that facts have been concealed and false representations are made in the plaint. While admitting that defendant no. 2 is maintaining current account with the plaintiff in the name of defendant no. 1, the availment of overdraft facility or issuance of any cheque in favour of M/s Sagat Enterprises has been refuted. It is alleged that the bank manager has misused the blank cheque of the defendant given for processing the cashcredit limit to her sister concern M/s Mahaveer & Sons. A complaint against the Manager and agents of the bank for cheating the defendants and committing fraud has already been filed. It is denied that legal notice on behalf of the plaintiff was served on her. While controverting the claim of plaintiff, dismissal of the suit has been urged.
Suit No. 92 of 2010 Page No. 2 of 9
3. Replication is a formality of reiterating the contents of the plaint and denying those of written statement. It is stated that the defendant intend to usurp the public money by misleading facts. They have leveled false, bald and defamatory allegations against the plaintiff to shield their own wrong. A false story has been concocted about the blank cheque having been given to the Manager in the context of considering cashcredit limit to M/s Mahaveer & Sons. The notice sent through UPC did not return and must have been delivered to the defendant. It is stated that the amount reflected in the books of account maintained in the ordinary and regular course of business only has been claimed.
4. Following issues were framed on the basis of pleading on 06.10.2010:
1. Whether the suit has been instituted by a duly authorized person? OPP.
2. Whether the plaintiff has misused the blank cheque of defendant when she was in the process of availing CashCredit Limit for sister concern M/s Mahaveer & Sons? OPD.
3. Whether the defendant has been granted temporary Overdraft Facility by the plaintiff by clearing cheque favouring M/s Sagat Enterprises? OPD.
4. Whether the plaintiff is entitled to recover the suit amount from the defendant with interest? If so, at what rate and for which period? OPP.
5. Relief.
5. In support of its case the plaintiff has examined Sh. V. S. Mittal, Senior Manager (CR) as PW 1 who has proved the Power of Attorney of Sh. Arvind Sharma as Ex. PW 1/1, Account opening form of defendant no. 1 Ex. PW 1/2, Cheque in contention Ex. PW 1/3, Legal Notice Ex. PW 1/4, Postal Receipts Ex. PW 1/5 & Suit No. 92 of 2010 Page No. 3 of 9 Ex. PW 1/6, UPC Slip Ex. PW 1/7, Returned Envelopes Ex. PW 1/8 & Ex. PW 1/9 and certified copy of statement of account Ex. PW 1/10.
Sh. Ramesh Kukreja, Senior Manager, Service Branch was examined as PW 2, whereafter the evidence was closed on 18.02.2012.
6. The defendants on the other hand examined defendant no. 2 as DW 1 and her brotherinlaw Sh. Kuldeep Sharma as DW 2 and closed their evidence on 22.07.2013.
7. I have heard Sh. R. K. Sinha, Adv. Ld. counsel for the plaintiff, perused the written arguments and carefully perused the file. None has turned up on behalf of the defendants for addressing arguments despite adequate opportunity having been afforded. The issuewise findings of the court are recorded hereunder:
8. Issue No. 1: 8(a) PW 1 had deposed that the suit was filed by Sh. Arvind Sharma, Senior Manager of the plaintiff. The defendants have not questioned PWs about such credentials of Sh. Sharma. By holding such a position, Sh. Sharma can legitimately be deemed to have remained in control of the activities of the concerned branch of plaintiff and the security documents executed by various customers in relation to the banking business. He had produced the original documents alongwith the plaint. He was thus the 'Principal Officer' of the plaintiff as understood within the provisions of Order XXIX Rule 1 CPC. He was specifically authorized by the plaintiff interalia to take decision and institute the suit by Power of Attorney dated 15.09.2008 Ex. PW 1/1. It has been held in Indian Oil Corporation Ltd. Vs. Union of India, 140 (2007) Suit No. 92 of 2010 Page No. 4 of 9 DLT 571, that a juristic entity can authorize any person to sign plaint or written statement on its behalf and this could be regarded as sufficient compliance with provisions under Order VI Rule 14 CPC.
Reliance on the ration in 'United Bank of India Vs. Naresh Kumar, IV (1996) CLT 51 (SC)', was prominently placed in this behalf. 8(b) Absolutely no question was put to PWs about the competence of signatory to plaint. Even suggestions that Sh. Arvind Sharma could not have instituted the present suit, was not given to them. The plaintiff therefore has discharged the onus to prove the issue, which is decided in affirmative.
9. Issue No. 2: 9 (a) The efficacy of testimony of DW 1 can be gauged from the fact that she was unaware of the contents of her affidavit by which her examinationinchief was filed. She had not knowledge about attestation thereof. On being tactically put, she denied her signatures on the written statement, affidavit supporting it and even the Vakalatnama. Although, M/s Mahaveer & Sons was claimed to be the sister concern of her proprietorship, defendant no. 1 yet she had no knowledge about any other account of any of her family members with the plaintiff. It was claimed that her brotherinlaw Sh. Kuldeep Sharma (DW2) was operating the current account in the name of defendant no. 1 with plaintiff and she used to put her signatures on the documents whenever called upon by him. She thus was unaware of the cheque Ex. PW 1/3 having been given to the plaintiff in blank for processing the CashCredit Limit in favour of M/s Mahaveer & Company.
9(b) No suggestions about the blank signed cheque Ex. PW 1/3 lying with the Suit No. 92 of 2010 Page No. 5 of 9 plaintiff with other similar cheques and documents for the project of M/s Mahaveer & Company was given to PW 1 in crossexamination. PW 2 obviously denied such a suggestion. DW 2 therefore is the only witness who has positively deposed in support of the issue. He has however been contradicted by DW 1 by stating that no complaint against the plaintiff on any issue has been lodged with any authority. Even DW 2 failed to substantiate having given a number of signed blank cheques of his other concerns Om Laser Printers & Deep Printers besides defendant no. 1 were delivered to the plaintiff. DW 2 carrying on multiple businesses and dealing with bank for a number of years, was expected to visualize the risk of giving blank cheques to the bank. He could at least have obtained acknowledgment of such instruments. None of the records of M/s Mahaveer & Sons has been produced to indicate the volume of his business, availment of previous financial facilities and that the same required boost of Rs. 35 lacs by way of Cash Credit Facility. It has not been specified as to how many cheques pertaining to the three concerns were delivered to the plaintiff. The counterfoils of such cheques would have revealed the real circumstances. There is therefore nothing to discern that cheque Ex. PW 1/3 was already in possession of the plaintiff prior to the date put on it and was therefore open for misuse. If at all, the defendant having given said cheque in blank through DW 2 had taken the calculated risk for which the plaintiff cannot be blamed. No complaint was made to the superior bank officers about the indiscretion of PW 2. DW 2 claimed to have lodged a complaint in this behalf at Police Station Darya Ganj but no copy was filed and proved in this case. The facts and circumstances thus converse to hold the issue in negative.
Suit No. 92 of 2010 Page No. 6 of 9
10. Issue No. 3: 10 (a) Plaintiff has filed an extract of the statement of account of defendant no. 1, Ex. PW 1/10. Although it reflects that the defendants had availed short period Overdarft from plaintiff in February/March, 2009 yet there is nothing to presume that said facility also had been extended on verbal request of DW 1 / DW2. The details of accounts of other concerns including the three concerns of DW 2 which may have availed such financial facility in the range of Rs. 56 lacs just on verbal requests, have not been furnished. Neither the guidelines issued by the plaintiff bank nor of the Reserve Bank of India for such transactions have been produced. The contention that defendant no. 2 had made a personal request in this behalf by coming over to the bank branch has also fallen flat. The statement of Accounts Ex. PW1/10 does not show that the defendants were carrying business of such a volume as to generate confidence in the plaintiff that they will honour any commitment of replenishing the credit facility within a short period. 10 (b) Since the banks have printed formats of security documents for all kinds of facilities extended to the customers and keep staff for explaining and maintaining the same, there was really no need for the plaintiff to concede to the alleged verbal request of defendants for temporary overdraft. The plea has apparently been taken to save the bank official who had exceeded his jurisdiction probably on motivation. The issue thus is decided in negative.
11. Issue no. 4: 11(a) Curiously enough the defendants do not claim to be oblivious of M/s. Sagat Enterprises. Through out the case it has not been whispered that defendant no. Suit No. 92 of 2010 Page No. 7 of 9 1 did not owe any amount to the said concern. No letter was written to the plaintiff for retrieving the sum of Rs. 6,00,000/ from M/s. Sagat Enterprises unauthorisedly encashed in their favour vide cheque Ex. PW1/3. The said concern was also not called upon by the defendants to refund the amount which has wrongly reached into their hands. Neither party could muster guts to summon witness from said concern for clearing the cloud. The statement of Account Ex. PW1/10 shows that Shakeel who had received the amount of cheque Ex. PW1/3 from plaintiff, and earlier also received similar amounts from the account of defendant no. 1 at least twice on 15.01.2009 and 29.01.2009.
11(b) The suit was filed by the plaintiff after about 15 months of the encashment of cheque Ex. PW1/3. No steps whatsoever were taken by the defendants in the interregnum to safeguard their interest. Even a simple letter explaining the complete circumstances and disowning their liability under the cheque, was not written to the plaintiff. In above background even if the cheque Ex. PW1/3 was cleared by the overzealous official of plaintiff in excess of his authority, non realization of the amount contained therein from defendants would tantamount to their unjust enrichment. Plaintiff thus is entitled to refund thereof from them. 11(c) On the one hand the concerned bank official has committed impropriety of unilaterally extending a financial facility for commercial transaction without first getting the security documents executed from the defendants, it is trying to shift the liability on defendants by claiming commercial rate of interest at 16.25% p.a. with monthly rests, on the other. The plaintiff cannot have both the worlds. The bank may recover the loss occasioned from the subject transaction from its official/s at fault.
11(d) Although the short period for which the facility was allegedly offered to Suit No. 92 of 2010 Page No. 8 of 9 the defendants remained undefined yet on the basis of previous similar incidents, it can be perceived to be running into few days/weeks. The plaintiff having approached the court after 15 months cannot fasten the defendants with any liability of interest for pre suit period.
12. In order that the defendants remain committed to pay the amount found due against them within a reasonable period thereafter else the liability will increase, it is deemed just and expedient to award interest to the plaintiff @ 6% p.a. from the date of filing of suit till realization. Issue is decided accordingly.
13. Issue no. 5: In view of the above discussions the suit is decreed in favour of the plaintiff and against the defendants in the sum of Rs. 6,00,000/ with interest @ 6% p.a. from the date of filing of suit till realization and proportionate costs.
Decree sheet be accordingly prepared. File be consigned to Record Room.
Announced in the open court (Sunil K. Aggarwal)
on 10th May, 2014 Addl. District Judge (Central)10
Delhi.
Suit No. 92 of 2010 Page No. 9 of 9
Suit No. 92 of 2010 Page No. 10 of 9