Delhi District Court
Mrs. Geeta Kathuria vs Bank Of Icici Ltd on 4 June, 2012
1
IN THE COURT OF SHRI MAN MOHAN SHARMA
ADDITIONAL DISTRICT JUDGE (CENTRAL)01
TIS HAZARI COURTS, DELHI.
CS No. 564/2008
Unique Case ID No. 02401C0281182005
1. Mrs. Geeta Kathuria
W/o Sh. Tilak Kathuria
R/o C339, East of Kailash,
New Delhi110024.
2. Mr. Tilak Kathuria
S/o Late Sh. T. N. Kathuria
R/o E339, East of Kailash
New Delhi110024. ....Plaintiffs
V E R S U S
1. Bank of ICICI Ltd.
Shakuntala59, Nehru Place,
New Delhi110019,
Through its Branch Manager
2. Punjab & Sind Bank
Delhi Contonment Extn. Counter,
New Delhi,
Through its Branch Manager. ....Defendants
Date of institution : 19.04.2001
Date of reserving judgment : 15.05.2012
Date of pronouncement : 04.06.2012
C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 1 of 32
2
Suit for recovery of Rs. 11,71,995.20
JUDGMENT
Alleging negligence against the defendant, the plaintiffs have propounded their cause of action on the following bundle of facts:
(i) The plaintiffs are individuals and the defendant bank (Bank of Madura Ltd) is a body corporate incorporated under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970.
(ii) The plaintiffs had deposited a sum of Rs.8,00,000/ in the fixed deposit account of the defendant bank for which a receipt bearing no. 445466 was issued to the plaintiffs by the defendant. The said FDR was in the joint names of the plaintiffs and the maturity date of the said FDR was 3rd August 1998. On 11th December, 1998 the plaintiffs called on the defendant bank to check up the accrued interest figure for advance tax, when to their shock they were informed that their above said FDR had already been encashed on 14th September, 1998 purportedly on the authority of a letter dated 13th September, 1998 alleged to have been signed by the plaintiffs. Immediately on the same day, the plaintiffs wrote a letter to the defendant bank informing C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 2 of 32 3 them about the fraud and forgery committed. They denied having encashed the above said FDR or having authorized anyone to get the same encashed. The plaintiffs accordingly called upon the bank to immediately make the payment of the maturity value of the said FDR.
(iii) The defendant bank vide its letter dated 13th December, 1998 informed the plaintiff that the payment of the maturity value of the FDR had already been made by means of a pay Order no. 644385 dated 14th September, 1998 for Rs.8,17,753/ in terms of the letter dated 13th September, 1998 purportedly signed by the plaintiffs. The said letter of authorization is a forged document, as it was never issued by any of the plaintiffs. Signature of the plaintiff on the FDR is also forged. The defendant bank has been negligent in not verifying the signatures of the plaintiffs both on the FDR as well as the above said letter with the specimen signature. The amount of Rs. 8,17,753/ is a large sum and as such the bank should have shown due care and diligence before issuing the said Pay Order.
(iv). On the plaintiffs' representations defendant made enquiries from the RBI clearing list from where it discovered C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 3 of 32 4 that the said pay order was deposited in Punjab & Sind Bank, Delhi Cantonment Extn. Counter in the saving bank account by one Ms. Geeta Kathuria. An FIR was lodged by the defendant bank with the Kalkaji Police Station, Nehru Place, Delhi on 14th December, 1998 bearing no. 1105/98. Thereafter a charge sheet was filed on 28.1.1999 under Section 419/420/468/471/34 of I.P.C. The investigation agency arrested three people, one Ms. Neelam who impersonated as Ms. Geeta Kathuria, and the other two are Shri Sanjay Kumar and Sandeep. The police recovered Rs.50,000/ from the above said accused persons. It was also found that the accused persons had in connivance with each other opened a saving bank account in the Punjab & Sind bank, Delhi Cantonment Extn. Counter. The said charge sheet was based on the finding of the investigation that the signatures on the FDRs as well as the letters were forged. It was further discovered that out of the total amount of FDRs which was deposited by a pay order in the Saving Bank Account in Punjab & Sind Bank, a sum of Rs.5,00,000/ had already been withdrawn. Thereafter the said account was frozen containing Rs.3,00,000/ by the bank.
C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 4 of 32 5
(v). The plaintiffs have made umpteen written representations to various Authorities but to no avail. The payment on forged signature of the drawer is a payment without authority and the banker has no mandate from its customer to pay the money; the relationship between the bank and its customers requires that the banker should be able to identify the signatures and detect imitation while making payments in the ordinary course of business. The defendant bank was accordingly bound to refund the money to the plaintiffs. The defendant bank has been negligent and has instead of acknowledging its liability to pay to the plaintiffs has instead put the blame on to the plaintiffs.
(vi). The plaintiffs were left with no other remedy but to make a complaint to the Banking ombudsman on 13th May, 1999. The Banking Ombudsman has closed the case on the ground that the said complaint was outside the ambit of Banking Ombudsman Scheme 1995.
(vii). The bank was required under the law to act legally, fairly and impartially towards people depositing their monies with the defendant bank and the bank is under legal obligation to pay back the amount due to the plaintiffs along with the interest. C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 5 of 32 6
(viii) The defendant's action is clear violation of the principle of natural justice. Though the forgery and fraud of the document was detected in the month of December, 1998 but the bank and its officers refused to make the payment of the matured FDR, despite numerous representations and personal meeting with the bank officials. This behavior of the bank shows not only a lackadaisical approach but also carelessness and negligent behavior by the defendant bank.
(ix). The said inaction on the part of the defendant bank is perverse on the face of it for the reason that a document which has a customers name as drawer if forged or placed thereon without authority is a nullity. The manner in which the bank has handled the encashment of FDR forging is, not a remote, but a very natural consequence of gross negligence of this description. The plaintiffs have been deprived of their own money which had been entrusted to the defendant bank and as such the defendant bank has been guilty of criminal breach of trust. Parting with the plaintiffs' money to an outsider without ensuring the checkes and balances of verification by the defendant bank in its normal course of business would make the defendant bank liable of C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 6 of 32 7 being prosecuted against.
(x). The defendant has failed, neglected and defaulted in making payment of the principal amount of the FDR of Rs. 8,00,000/. The plaintiff's are entitled to claim and the defendant is liable to pay the above said amount. Plaintiffs are also entitled to interest on Rs.8,00,000/ form 3rd August 1998, till the filing of this suit at the rate of 18%. The amount for a period of two years and seven months works out to Rs.3,71,995.20/ as interest due. The said amount of Rs.3,71,995.20/ has also become and payable by the defendant for the period of August 1998 to March, 2001. Accordingly the total amount of Rs. 11,71,995.20/ has become due and payable by the defendant to the plaintiff. Furthermore, the plaintiffs are entitled to damages for the harassment caused to them and the false aspersions cast upon them by the defendant bank and they thus reserve their right to file appropriate application/suit for damages.
2. The suit was earlier filed against Bank of Madhura as defendant no. 1 and Punjab & Sind Bank as defendant no. 2. Subsequently, Bank of Madhura has been substituted by ICICI Bank Ltd on account of the merger of former into the latter.
C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 7 of 32 8
3. In its written statement the defendant no. 1 has taken preliminary objection that the conduct of the plaintiff himself has been fraudulent and dishonest. On the other hand the defendantbank has acted diligently and with due care that is expected of a prudent man, therefore, it is not liable for any damages.
4. On merits, the factual position as pleaded by defendant no. 1 is as under:
(i). The plaintiffs had a joint saving account bearing no. 57690 held on either or survivor basis. On 05.05.1998 a cheque no. 087151 dated 05.05.1998 in the sum of Rs.8 lacs drawn on the Indusind Bank, New Delhi was deposited in the said account, which as per instructions of plaintiff was put short in term deposit for two months 29 days carrying interest @10% per annum maturing on 03.08.1998. The FDR continued to remain in the possession of the defendant no.1 even after the date of maturity without any further institutions from the plaintiff. On 13.09.1998 the defendant no. 1 received instructions from the plaintiff no. 2 in the form of a letter written on the letter head of plaintiff no.1 for braking the FDR and handover the pay order to one Mr. Satish Kumar, bearer of C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 8 of 32 9 the said letter. The signatures of said Sh. Satish Kumar was attested by the plaintiff no.1. The said letter along with the original FDR was given to the defendant no.1 by said Sh. Satish Kumar.
(ii). On December 1998, the aforesaid saving account lying in the joint name of the plaintiffs were closed by the plaintiffs.
(iii). On 11.12.1998 the plaintiff no.1 came to the defendant no. 1 and asked for payment under the aforesaid FDR. The defendant no. 1 was surprised at the request and told the plaintiff no. 1 that the monies were already paid in terms or instructions under his letter dated 13.09.1998. The said letter was also shown to the plaintiff no.1. Upon showing the said letter, the plaintiff no. 1 got agitated and said that he had never issued the said letter and that it was forged. On hearing this, the concerned officer of the defendant no.1 became alert and started making inquires about the pay order of Rs.8,17,753/ to find out as to where the same was deposited. The defendant no. 1 came to know through the Reserve Bank of India, Inward Clearing List, dated 15.09.1998, that the said pay order was deposited in Punjab & Bank Delhi, Cantonment Extn. Counter Branch. C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 9 of 32 10
The defendant no. 1 immediately contacted the Branch Manager of the concerned branch of Punjab & Sind Bank and was informed that a saving bank account had been recently opened in the month of September, 1998 in the name of Geeta Kathuria. The defendant no. 1 was further informed that the said pay order was deposited in the said account. The defendant no. 1 was also told that Rs.5 lacs had already been withdrawn and there was a balance of only Rs. 3 lacs and odd amount. On the request of the defendant no.1 the Manager of the Punjab & Sind Bank froze the said saving account.
(iv). On 12.12.1998, the plaintiff no.1 again came to the office of the answering defendant and inquired as to the further developments in the matter. Thereafter the plaintiff no.1 handed over a letter to the defendant no. 1 dated 11.12.1998 bearing both the plaintiffs' signatures where it was stated that the signatures were forged in the letter dated 13.09.1998 and asked the defendant no. 1 to make payment of the fixed deposit value. Thereafter, the then Manager of the defendant no. 1, Mr. K. Chidambaran lodged a written compliant before the SHO, Kalkaji Police Station, New Delhi on the bases of which an FIR C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 10 of 32 11 was registered bearing no. 1105/98.
(v). From the above facts and circumstances it can be clearly seen that the defendant no.1 has all along acted with due diligence and care as a reasonable and diligent person may be expected to and hence it is submitted that the defendant no. 1 cannot be held responsible for losses, if any, suffered by the plaintiffs as alleged. On the other hand, it cannot be said that the plaintiffs acted with due diligence and care and in fact are guilty of negligence. Assuming but not admitting, that the said letter dated 13.09.1998 was forged as alleged by them, it cannot be forgotten that the said letter was accompanied with the FDR which was duly discharged by the plaintiff no.1 at the back. If the said letter was forged as alleged, then the FDR accompanying it must certainly have been stolen, and therefore it is difficult to understand as to why the plaintiffs did not lodge a complaint before the police and the bank about if being stolen or lost. The plaintiffs waited for the three whole months before they came to the bank to ask for payment and that too without the FDR. It is pertinent to note here that even after knowing that fact that the money has been taken out by the bank C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 11 of 32 12 fraudulently, the plaintiffs did not make any complaint with the police but merely sent a letter to the answering defendant stating that the letter was forged and asking it to pay the value of the fixed deposit. On the contrary, it was the defendant no. 1, who acted diligently and with carte who lodged the complaint to the police on the basis of which a FIR was lodged and some person were arrested. In the light of the above said circumstances, the conduct of the plaintiffs is highly questionable.
5. The defendant no. 1 denied the material averments of the plaint on which the plaintiffs have propounded their cause of action in the above terms and explanatory facts pressed into service.
6. Vide its separate written statement the defendant no. 2 denied its liability and challenging that the plaintiffs have no cause of action against it. It submitted on merits that it opened the bank account in the name of Ms. Geeta Kathuria, after exercising due diligence as per the banking norms. It acted diligently when it was notified of the fraud and prevented further encashment of the cheques from the account in question. The defendant no. 2 also denied the material averments of the plaint on which the plaintiffs have propounded their cause of action in the above terms and explanatory facts pressed into service. It C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 12 of 32 13 denied any lack of diligence on its part. It prayed for the dismissal of the suit of the plaintiffs.
7. The plaintiff filed replication to the written statement of the defendant no. 1 in which it reiterated the averments of its plaint thereby denying the rival version of the defendant no. 1.
8. With the available pleadings the following issues were framed on 15.09.2006:
1. Whether the letter of authorization dated 13.09.98 is forged document and whether on aforesaid letter and also on FDR signatures are not of plaintiff? OPP
2. Whether defendant bank had acted diligently and had taken reasonable care while discharging the FDR? OPD
3. Whether plaintiff is entitled to recover suit amount from defendant bank? OPP
4. Whether plaintiff is entitled to interest, if yes, at what rate and from when? OPP
5. Relief
9. The plaintiff has examined Shri T.R. Kathuria, the plaintiff no. C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 13 of 32 14 2, as PW1 and Smt. Geeta Kahuria, the plaintiff no. 1, as PW2.
10. No witness has been examined by either of the defendants.
11. Final arguments have been addressed by Shri Neeraj and Shri Dhruv, Ld. Counsel for the plaintiffs and Shri Rishi Kapoor Ld. Counsel for the defendant no. 1.
12. Both the parties have also filed their respective written arguments.
13. Ld. Counsel for the plaintiff has argued that the evidence of plaintiff has established beyond doubt the negligence on behalf of the defendants and the plaintiffs have been successful in proving their case. The payment made by the defendant no. 1 on a forged letter is of no consequence as the forgery does not give any mandate to make payment and thus the payment by the defendant no. 1 is without any authority. Thus the entire transaction is vitiated and the plaintiffs are entitled to their suit being decreed.
14. Ld. Counsel for the plaintiff has placed reliance upon Canara Bank vs. Canara Sales Corporation (1987) 2 SCC 666 to cite that if the signatures of the customer on a cheque are forged there is no mandate to the pay the amount as such cheque is a nullity; the bank making payment on such a cheque cannot resist the claim of the C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 14 of 32 15 customer, until and unless when it establishes estoppel or acquiescence; mere negligence will not prevent the customer from successfully suing the bank from recovery of the amount. Another case relied by Ld. Counsel for the plaintiff is Citizen Cooperative Bank Ltd. vs. Ritesh Mittal AIR 2003 J&K67 to cite that notwithstanding the fact that there is some remissness on the part of the customer in properly keeping the cheque book, but that should not absolve the bank of its liability.
15. Ld. Counsel for the defendant no. 1 has argued that the plaintiffs' cannot escape their liability which has been occasioned on account of their own negligence. On the other hand the defendant no. 1 has acted with due diligence which is of a prudent man in the ordinary course of banking business and no liability can be fastened upon it.
16. It is submitted that the evidence of two witnesses of plaintiff has been shaky. The PW2 has no knowledge of the case and she has passed the buck in her cross examination that her husband has the knowledge. She has evaded all the questions and her evidence carries no value.
17. It is argued by Ld. Counsel for the defendant no. 1 that PW1 C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 15 of 32 16 has admitted in his cross examination that the FDR had matured on 03.08.1998 and that he visited the bank on or about 11th or 12th of December 1998. PW1 has also admitted that he did not carry the original FDR with him on that day. PW1 took an oscillating stand as to whether the original FDR had been lying in his drawer or was stolen. PW1 has admitted that the Manger concerned had shown him the original FDR. Thus his falsehood is very much apparent on the record. In fact for their lapses and negligence the plaintiffs are trying to saddle the defendant with liability. It was the liability of the plaintiffs to keep the FDR in safety. The bank has acted in a regular and careful manner. The original FDR had accompanied the letter for payment; the payment was made by an account payee cheque in the name of one of the holders. On the detection of fraud, the defendant no. 1 acted with due promptitude to stop the payment which resulted that a part of amount was freezed. The defendant no. 1 also acted with diligence to lodge the FIR.
18. Ld. Counsel for the plaintiff has further argued that the documents have not been proved by the plaintiff in accordance with law and cannot be looked into. The conduct of the plaintiff has been highly fraudulent. The plaintiffs cannot be permitted to take C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 16 of 32 17 advantage of their own wrongs and omissions. The suit of the plaintiffs be dismissed.
19. In rebuttal, Ld. Counsel for plaintiff refuted the arguments of defendant no. 1.
20. No other point has been argued or urged. No other case law has been cited.
21. I have considered the rival submissions and the material on record. My issuewise findings are as under: Issue no. 1. Whether the letter of authorization dated 13.09.98 is forged document and whether signatures on aforesaid letter and also on FDR are not of plaintiff?
22. The onus of this issue has been on the plaintiffs. Plaintiffs have themselves as their witnesses and tendered various documents in evidence.
23. Ex. PW1/1 (Colly.) is the copy of the application for the term deposit and that of the FDR. The application for the term deposit has been admitted by the defendant no. 1.
24. Ex. PW1/2 is the copy of the letter dated 13.09.1998 on the basis of which the FDR in question had been encashed. This document is also admitted by the defendant no. 1. In fact, the copy of the letter dated 13.09.1998 has been supplied by the defendant no. 1 to C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 17 of 32 18 the plaintiffs.
25. Ex. PW1/3 is the plaintiffs' letter dated 11.12.1998 to the bank. The defendant no. 1 has admitted the receipt of this letter but has denied the contents of the same.
26. Ex. PW1/4 is the letter dated 13.12.1998 of the bank with enclosures. This letter has been admitted by the defendant no. 1.
27. Ex. PW1/5 is the charge sheet dated 28.01.1999. Ex. PW1/6 is the letter of Banking Ombudsman about the compliant of the plaintiffs being not entertainable before it. Ex. PW1/7 (Colly) are the various representations of the plaintiff to the bank and defendant no. 1 has admitted the receipt of this letter but has denied the contents of the same. The defendant no. 1 has admitted its letter dated 05.02.1999 which is also a part of Ex. PW1/7 (Colly).
28. The examination in chief of the PW1 has been in terms of the plaint. In his cross examination the PW1 has admitted that the FDR had matured on 03.08.1998 but added that the manager had informed him that he shall continue to get the interest as long as the deposit was with the bank even after maturity. He has also admitted that a Fixed Deposit Receipt was issued by the bank and it was in the joint name of the plaintiffs.
C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 18 of 32 19
29. In his cross examination the PW1 has stated that eh visited the bank on or about 11th or 12th of December 1998 and asked for interest on the FDR. The same was necessitated to make payment towards the advance tax. He did not carry the original FDR with him on that day as it was supposed to be lying in his drawer with other papers. He further volunteered to state that the FDR in question was stolen. In his further cross examination he stated that at that time he was of the view that the FDR was lying in his drawer with other papers and he could not say whether the same was stolen or not. The witness admitted that the Manger concerned had shown him the original FDR. The witness further deposed that he could not say anything as to when and by whom the FDR had been taken out or stolen form the drawer of his office.
30. PW1 admitted in his cross examination that when he called upon the defendant no. 1 to immediately make the payment of the maturity value of the said FDR he was not having the FDR and immediately thereafter the Manger concerned had shown him the original FDR and informed him that the payment of FDR had already been made.
31. PW1 also deposed in the cross examination that the bank C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 19 of 32 20 manger lodged FIR in his presence. The manager mentioned that the payment has been wrongly made. PW1 denied the suggestion to the contrary.
32. In his cross examination PW1 also denied the suggestion that his statement to the effect that his signatures were forged on letter dated 13.09.1998 is wrong. PW1 stated that he did not sign in the manner and style as been done in the letter dated 13.09.1998. He still signs in the same style as per his letter dated 11.12.1998. In Ex. PW1/7 he has signed himself and on behalf of his wife.
33. PW1, in his cross examination, denied the suggestion that the bank was not negligent in verifying his signatures or that the FDR was encashed due to his negligence. He denied the suggestion that the bank was not liable to refund the FDR amount. Witness admitted that he had closed his account with the bank but did not remember that it was so done on 4.12.1998.
34. Witness PW2 during her cross examination has been evasive in the answering the question and has stated that facts are within the knowledge of her husband.
35. The stand of PW1 is that the letter Ex PW1/2 has not been issued by the plaintiffs and does not bear their signatures. The C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 20 of 32 21 defendant no. 1 has made the payment on the strength of this letter accompanied with the original FDR. Now the question to be examined is whether the said letter is forged.
36. Application for Term Deposits has been admitted by the defendant no. 1 as a part of Ex. PW1/1 (Colly.). It bears the signatures of the plaintiffs at two places. Signatures at the second place are referred to as Specimen Signatures. This implies that for all mandates or instructions received by the bank from the plaintiff these signatures are to be referred to for tallying with the signatures appended on the instrument of instructions/mandate.
37. In the cross examination of PW1, the defendant no. 1 has made no attempt to confront the witness that his signatures on Ex. PW1/2 tallied with the signatures on the Application for Term Deposits {as a part of Ex. PW1/1 (Colly.)}. Thus the statement of the witness PW1 on this aspect has remained unimpugned. The bank on its part has no led no evidence to prove that the signatures of plaintiff no. 2 appearing Ex. PW1/2 tallied with the signatures on the Application for Term Deposits {as a part of Ex. PW1/1 (Colly.)}. No expert witness has been examined on this aspect.
38. Section 73 of the Indian Evidence Act, 1872 provides as under: C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 21 of 32 22 "73. Comparison of signature, writing or seal with others admitted or proved --In order to as certain whether a signature, writing, or seal is that of the person by whom it purports to have been written or made, any signature, writing, or seal ad mitted or proved to the satisfaction of the Court to have been written or made by that person may be compared with the one which is to be proved, al though that signature, writing, or seal has not been produced or proved for any other purpose.
The Court may direct any person present in Court to write any words or figures for the purpose of en abling the Court to compare the words or figures so written with any words or figures alleged to have been written by such person.
This section applies also, with any necessary modi fication, to fingerimpressions."
39. Two striking differences noted by the court are:
(i). in the specimen signatures of the plaintiff no. 2 are in respect of the horizontal line of letter 'T' the horizontal line of 'T' is covering only upto the letters "Til" of the word "Tilak" whereas in Ex. PW1/2 it extends upto the letters "Tila" and is fairly long as compared to the relative size in signatures on the Application for Term Deposits {as a part of Ex. PW1/1 (Colly.)}.
C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 22 of 32 23
(ii). The formation of letters "aj" in the word "Raj" in in Ex. PW1/2 is not tallying with the formation letters "aj" in the word "Raj" in the Application for Term Deposits {as a part of Ex. PW1/1 (Colly.)}.
40. The above features of difference are clear to naked eyes. The flow of signatures in Ex. PW1/2 is not conforming to the flow of specimen signatures in the Application for Term Deposits {as a part of Ex. PW1/1 (Colly.)}. The specimen signatures appear to be written in running hand whereas the signatures on Ex. PW1/2 appear to have been written slowly and in a calculative manner.
41. The signatures on the back of the FDR also sail in the same boat as the signatures on Ex. PW1/2 on the parity of reasoning.
42. Hon'ble High Court of Delhi in Kerala Agro Industries Corporation Limited vs. Beta Engineers 188 (2012) DLT 373 wherein it has been held that "...a civil case is decided on balance of probabilities. A civil court puts all the evidence which have been led in a melting pot so as to determine the final picture which has to emerge..."
43. In the back drop of the evidence on record, the preponderance of probabilities speaks in favour of the plaintiffs to show that the letter C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 23 of 32 24 dated 13.09.98 is a forged document and the signatures on the aforesaid letter and also on FDR are not of the plaintiff no. 2.
44. This issue is thus answered in favour of the plaintiffs. Issue no. 2. Whether defendant bank had acted diligently and had taken reasonable care while discharging the FDR?
45. The onus of this issue has been on the defendant. The defendant has not led any evidence.
46. The discussion of evidence which has been done while examining the issue no. 1 is not been discussed herewith to avoid prolixity. Examining the entire evidence that has been led in this matter it is to be seen visàvis the settle law as to what are the obligations of a banker and whether there is any default on the part of the banker/defendants.
47. The relationship between a banker and customer has various facets--that of a debtor and creditor, or of sacred trust or akin to landlord or tenant (in case of safe deposit vault) etc.
48. A banker is bound to know the signatures of its customer. The banker is supposed to maintain with it the specimen signatures of the customer so that it can compare the signatures when an instrument is presented before it for payment. Thus the signatures of a customer on C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 24 of 32 25 an instrument is the legal authority or mandate to bank to make the payment. An instrument with the drawer signatures forged is a mere nullity. Unless the bank can establish adoption or estoppels, it cannot debit it's customer's account with a forged instrument.
49. The case law cited by the plaintiffs as Canara Bank vs. Canara Sales Corporation (1987) 2 SCC 666 squarely applies to the facts and circumstances of this case. Similar law has been laid down in Bihta Cooperative Development and Care Marketing Union Limited vs. Bank of Bihar Ltd. AIR 1967 SC 389. A banker can escape the liability only on adoption/acquiescence or estoppel.
50. The defendant no. 1 has only a bald statement that it has acted with due care and circumspection while giving the payment of FDR on the basis of letter dated 13.09.98 but there is no evidence to manifest this fact. There is no evidence of the official concerned that he duly compared the signatures on the letter and the FDR with the specimen signatures available with the banker. It was incumbent on the part of the defendant no. 1 to prove the same as a matter of fact. Of course, on the plaintiff no. 1 making hue and cry when he visited the bank on 11th or 12th of December 1998 and a factum of fraud having been noted the defendant no. 1 acted with exemplary C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 25 of 32 26 promptitude. It made inquiries from RBI and approached the defendant no. 2 so that the money is saved. However, by that time a sum of Rs. 5,00,000/ had already been swindled. The defendant no. 2 also promptly lodged the FIR into the matter. However, the future good conduct cannot wash out the consequences of past conduct which lacked diligence.
51. Thus on the material on record, the finding on this issue is returned against the defendant.
Issue no. 3. Whether plaintiff is entitled to recover suit amount from defendant bank?
52. In view of the discussion on the issue no. 1 and 2 the plaintiffs have been able to establish their case. Now the aspect as to whether there had been a contributory negligence on the part of the plaintiffs and, if so, what is the effect of the same is to be examined.
53. In the case relied upon by the plaintiffs viz. Canara Bank vs. Canara Sales Corporation (1987) 2 SCC 666 estoppel and acquiescence have been held as defences available to a banker in a case of negligence in making payment in making payment on forged signatures of the customers.
54. In Novartis AG vs. Wandbury Ltd 2005 (31) PTC 75 (DEL.) it has been held that acquiescence is nothing but on facet of delay. C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 26 of 32 27
55. If the plaintiff stands by knowingly and let the wrong happen, the plaintiff would be stopped by acquiescence. As per the settled po sition of law acquiescence means something more than mere silence on the part of the plaintiffs. Acquiescence means encouragement or some overt act on the part of the plaintiff to perpetuate the wrong. Ac quiescence may be express or implied consent. In law, care must be taken to distinguish between mere knowledge of a situation and posi tive consent to it. For example, in the defence of volenti non fit injuria an injured party will not be regarded as having consented to a risk simply because he knew that the risk existed. Thus acquiescence is a positive act and must show consent.
56. Para 30 of the judgment Canara Bank vs. Canara Sales Corpo ration (1987) 2 SCC 666 it has been held that in order to sustain a plea of acquiescence, it is necessary to prove that the party against whom the plea is raised had remained silent about the matter even af ter knowing the truth of the matter.
57. On examining the matter on record, it is clear that the plaintiffs did not remain silent on discovery of the payment of their FDR with out their mandate. The plaintiff no. 2 immediately made hue and cry and even accompanied the bank manager when he went to make the C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 27 of 32 28 complaint and thereafter made repeated reminders to agitate his grievance is selfspeaking of the matter. Thus the plea of acquiescence cannot stand against the plaintiffs.
58. Estoppel is a rule of evidence and has its genesis in equity. It is a conclusive statement which cannot be denied by the person whom it affects. If a person makes a statement and the other person changes his position relying upon the truth of that statement changes his position and the truth of that statement cannot be denied by the former to the detriment of the latter. As per para 43 of the judgment Canara Bank vs. Canara Sales Corporation (1987) 2 SCC 666 negligence, which can sustain the plea of estoppel must be in the transaction itself and it should be so connected with the result to which it led that it is impos sible to treat the two separately.
59. In this case, by necessary implication it is manifest on record that the loss or theft of FDR has taken place while it was in possession of the plaintiffs. Thus the negligence of the plaintiffs in securely keep ing the FDR is a foregone conclusion. However the payment has to be made by the banker on the strength of the signatures on the instrument of instructions of payment matching with the specimen signatures of the customer maintained by the banker. The obligation to make pay C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 28 of 32 29 ment only on the verification of signatures does not in any way get whittled down by the factum that the original FDR has accompanied the letter for payment of FDR. The bank's obligation to compare the signatures does not get waived merely for the reason that the original FDR has been produced before it for payment. The condition prece dent for making payment on an instrument is tallying of the signatures of the customer with the specimen signatures kept by the bank. Thus no case of estoppel against the plaintiffs is also made out, albeit the FDR has been stolen due to their own negligence.
60. Finding on this issue is returned in favour of the plaintiffs. Issue no. 4. Whether plaintiff is entitled to interest, if yes, at what rate and from when?
61. In view of the findings on the issue nos. 1, 2 and 3 the plaintiff is entitled to interest for the reason that it has been deprived of its legitimate money on account of the acts and omissions on the part of the defendant no. 1.
62. The plaintiff has claimed interest @ 18% per annum.
63. The plaintiffs' money landed in wrong hands on14.09.1998. For more than 13 years the plaintiff has been denied the use of the sum of Rs. 8,17,753/ i.e. the maturity value of the FDR on the fateful day.
64. Much water has flowed down the river since 14.09.1998. If the C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 29 of 32 30 plaintiffs are only directed to be paid Rs. 8,17,753/ it would not mean complete justice. The purchasing power of money has diminished during these more than thirteen years, on account of the toll taken by the inflation. The money has an opportunity cost. Had the plaintiffs invested their money elsewhere they would have earned returns on the same by way of profits, dividends, interest or rent depending upon the type of saving. Though the court cannot speculate about what the money would have earned in alternative investment avenues, award of a reasonable rate of interest is a logical corollary in the facts and circumstances of the case.
65. When the plaintiff's subscribed to the FDR with the plaintiff bank, the contractual rate of interest had been 10% per annum. After that, in the last more than 13 years, the interest rates have seen both the southward and northward movements. Presently the rate of interest in banking circle hovers about 9% approximately for deposits above one year or so with some extra 0.5% to senior citizens.
66. Taking a collective assessment of these factors, in my view the interest of justice would be served if the plaintiffs are awarded interest @ 10% per annum compounded annually on the sum of Rs. 8,17,753/ i.e. the maturity value of the FDR on 14.09.1998. The interest shall be C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 30 of 32 31 payable w.e.f. 14.09.1998 till the date of final realization.
Relief
67. In view of my findings on the above issues the suit of the plaintiff is liable to be decreed.
68. As the plaintiff has added interest that has accrued till the date of institution of suit @ 18% per annum in the suit amount whereas the court has considered interest @ 10% per annum, therefore the suit amount has to be considered as Rs. 8,17,753/ i.e. the sum due as on 14.09.1998 plus interest that has accrued till the date of institution of the suit (i.e. principal + interest accrued from 15.09.1998 till 19.04.2001 @ 10% per annum compounded annually on the sum of Rs. 8,17,753/ i.e. the maturity value of the FDR on 14.09.1998. )
69. Therefore the suit of plaintiffs is decreed as under: A decree in the sum of Rs. 8,17,753/ (Rupees Eight Lakhs Seventeen Thousand Seven Hundred Fifty Three Only) is passed in favour of the plaintiff and against the defendant no. 1, with presuit, pendentalite and future interest @ 10% per annum compounded annually on the decreetal amount w.e.f. 15.09.1998 i.e. next C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 31 of 32 32 date from the date of maturity of FDR till the date of realization of the entire decreetal amount. The said of Rs. 8,17,753/ plus interest accrued from 15.09.1998 till 19.04.2001 @ 10% per annum compounded annually on the sum of Rs. 8,17,753/ i.e. the maturity value of the FDR on 14.09.1998 shall be the decreetal amount.
As the filing of this suit has been rendered necessary on account of the default of the defendant no. 1, the plaintiffs shall also be entitled to the costs of this suit against the defendant no. 1.
70. Decree sheet shall be drawn accordingly.
71. After necessary compliance, the file be consigned to the Record Room.
Announced in the Open Court today this 4th day of June 2012 (MAN MOHAN SHARMA) ADJ (Central)01, Delhi C.S. No. 564/08, Smt. Geeta Kathuria Vs. Bank of ICICI Ltd. Page 32 of 32