Karnataka High Court
The Managing Director Cauvery ... vs State Bank Of Mysore on 10 March, 2014
Author: K.Bhakthavatsala
Bench: K.Bhakthavatsala
1
RFA No.517/2005
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 10TH DAY OF MARCH 2014
BEFORE
THE HON'BLE Dr. JUSTICE K.BHAKTHAVATSALA
R.F.A.No.517/2005 (MON)
BETWEEN :
1 THE MANAGING DIRECTOR
CAUVERY NEERAVARI
NIGAMA LIMITED,
4TH FLOOR,
COFFEE BOARD BUILDING, NO 1,
DR.AMBEDKAR VEEDHI
BANGALORE-1.
2 THE EXECUTIVE ENGINEER
OFFICE OF THE EXECUTIVE ENGINEER
HARANGI REHABILITATION DIVISION
POST KUSHALNAGAR
KODAGU DIST.
3 THE CHIEF ENGINEER,
IRRIGATION(SOUTH),
PUBLIC OFFICE BUILDING
MYSORE.
APPELLANTS 2 & 3 NOW REP. BY
THE MANAGING DIRECTOR,
CAUVERY NEERAVARI NIGAMA LTD. ...APPELLANTS
(By Smt. SHWETHA ANAND, ADV.)
2
RFA No.517/2005
AND :
STATE BANK OF MYSORE
KUSHALNAGAR BRANCH
REP. BY ITS MANAGER
Sri.N KRISHNA BHAT
KUSHALNAGAR
SOMWARPET TALUK
KODAGU DIST. ...RESPONDENT
(By Sri.PUTTAGE R. RAMESH, ADV.)
THIS RFA IS FILED U/S 96 OF CPC AGAINST THE
JUDGMENT AND DECREE DT. 17.1.2005 PASSED IN OS
NO.86/1999 ON THE FILE OF THE CIVIL JUDGE (SR.DN.),
MADIKERI, DECREEING THE SUIT FOR RECOVERY OF
MONEY.
This appeal coming on for hearing, this day, the
Court delivered the following:-
JUDGMENT
This is an appeal filed by defendants under Section 96 of CPC, challenging the Judgment and Decree dated 17.01.2005 made in O.S.No.86/1999 on the file of Senior Civil Judge, at Madikeri.
2. The appellant No.1 (viz., the Managing Director, Cauvery Neeravari Nigama Limited), is not a party before the Trial Court. But he is the head of the department of 3 RFA No.517/2005 Appellant Nos.2 and 3 herein and they are defendants 1 and 2 in the suit. He has filed the appeal and taken leave. The Defendant No.3 is the Secretary to Govt. of Karnataka, Major Irrigation Department. He has not been made as a party to the appeal. The respondent herein is the plaintiff before the Trial Court. The appellants and the respondent are hereinafter referred to as 'the defendant/Irrigation Department' and 'the plaintiff/Bank', respectively.
3. Brief facts of the case leading to the filing of the appeal may be stated as under:
The respondent/plaintiff/Bank filed a suit on 10.08.1999 against the defendant/Irrigation Department for recovery of Rs.1,68,600/-. In other words, the plaintiff/Bank issued a demand draft dated 07.02.1991 for a sum of Rs.1,68,600/- in the name of the Assistant Cashier, South Central Railway, Vijayawada as per the request of the Defendant/Irrigation Department.
Subsequently, the defendant, by its letter dated 28.09.1992, requested to issue duplicate demand draft in 4 RFA No.517/2005 lieu of the original on the ground that the original draft was lost and lapsed. The plaintiff/bank, after obtaining an indemnity bond from the defendant dated 31.10.1992 and after verifying that the draft was not paid, issued a duplicate demand draft dated 07.02.1991 in favour of Assistant Cashier, South Central Railway, Vijayawada in place of the original D.D.No.26233 dated 07.02.1991. Later on, the defendant produced the duplicate demand draft and requested for reimbursement of the amount. Accordingly, the plaintiff/bank cancelled the duplicate demand draft on 31.10.1992 and credited the proceeds to the Defendant account. It is the case of the plaintiff/bank that in the month of August 1996, during the course of reconciliation of bank accounts, it was discovered and brought to the notice of the Bank that the original Demand Draft was also encashed by the payee on 19.02.1991 itself. Hence, the plaintiff/Bank invoked the indemnity bond dated 17.02.1997 executed by the defendant/Department, but the defendant failed to pay the same. Therefore, the 5 RFA No.517/2005 plaintiff/Bank filed a suit against the defendant/Department for recovery of Rs.3,73,948/-, viz., the principal amount of Rs.1,68,600/- and Rs.2,05,348/- towards interest. The defendant/Irrigation Department entered appearance and filed written statement stating that the defendant/Irrigation Department had entered into a contract with M/s.Andhra Cements Limited, for supply of 500 metric tones cement and the D.D for a sum of Rs.1,68,600/- was sent towards fright charges of transportation of cement from Vijayawada to Bangalore White Field Railway Yard. He further submits that cement was required urgently for an important development work, but the factory failed to supply the same. Hence, the defendant/Irrigation Department cancelled the purchase Order and demanded the cement factory to refund or return the D.D as early as possible. It is stated that the cement factory replied by its letter dated 19.09.1992 stating that the demand draft was lost/misplaced and therefore, it became stale. Further, the 6 RFA No.517/2005 defendant/Irrigation Department approached the South Central Railway, Secunderabad, asking whether the D.D was encashed or not, for which, the railway authorities also replied by its letter dated 03.06.1992 (Ex.D.3) stating that the D.D for Rs.1,68,800/- was neither adjusted towards fright charges nor any railway receipts and advised the defendant to approach railways F.A and C.A.O at Secunderabad with details of claim if the same was realized and credited to the Railways' Account. Therefore, it was contended that the defendant/Irrigation Department was not liable to pay any amount much less the suit claim and prayed for dismissal of the suit.
In view of the pleadings on record, the Trial Court framed as many as five issues. The parties went to trial. In support of the case of the plaintiff/Bank, it has got examined one K.Nagappa and M.R.Gopal as P.Ws.1 and 2 and got marked Exs.P.1 to P.11. In rebuttal, the Irrigation Department got examined D.W.1/Padmanabha and got marked Exs.D.1 to D.7. The Trial Court, after hearing 7 RFA No.517/2005 arguments, perusing the oral and documentary evidence on record, held that the suit is not barred by limitation and plaintiff/bank is entitled for reimbursement of the proceeds of the duplicate draft amount of Rs.1,68,600/-. This is impugned in this appeal.
4. Learned counsel for the appellants/Irrigation Department submits that the suit filed in the year 1999 was barred by limitation as the original demand draft dated 07.02.1991 was encashed on 19.02.1991 and the duplicate Demand Draft amount was credited to the account of the defendant in the month of October 1992. He further submits that the discrepancy noticed during the course of audit in the year 1996, would not be a ground to hold that suit was in time. With reference to suit claim, she submits that the Trial Court erred in decreeing the suit though the letter addressed by M/s.Andhra Cements was produced to establish that the original demand draft was not encashed apart from that the plaintiff/Bank itself has issued an endorsement confirming that D.D was not encashed and 8 RFA No.517/2005 therefore, the plaintiff/Bank is estopped from seeking reimbursement of the duplicate demand draft amount. In Para No.18 of the memorandum of appeal, it is contended that the Trial Court ought to have rejected the suit on the ground of mis-joinder and non-joinder of necessary parties. Learned counsel appearing for the respondent/ bank submits that as there was no jural relationship between the plaintiff/bank and the cement supplier/Andhra Cements Limited and South Central Railways, they were not made parties to the suit and the suit is not bad for non-joinder of parties. He submits that it is for the defendants to establish their case by impleading them, viz., M/s.Andhra Cements Limited and the South Central Railways as parties to the suit, but they have not done so.
5. It is the case of the defendants that the contract for supply of cement was cancelled. Hence, it was the duty of the defendants/Department to implead the Andhra Cements Limited as well as the South Central Railways as parties to prove its case and seek appropriate relief. It is 9 RFA No.517/2005 not out of place to mention that if the Bank has wrongly credited the amount to the account of the defendants/Department, it has got legal right to recover the same. Issue No.4 on the point of limitation has been answered in favour of the plaintiff. It is the case of the plaintiff/Bank that in the year 1996, during the course of reconciliation of bank account, double payment with reference to draft and duplicate draft was noticed and thereafter, a legal notice was issued to the defendant for payment of the D.D amount with interest thereon, but in vain. Hence, suit was filed in the year 1999. The plaintiff/Bank has not produced the copy of audit report. Since it is the case of the defendant/Irrigation Department that the D.D was obtained for a sum of Rs.1,68,600/- in favour of South Central Railways was towards fright charges, but subsequently, the contract for supply of cement was cancelled. But the original D.D. Dated 07.02.1991 drawn on the South Central Railways has been encashed by the payee-railways on 19.02.1991. It is the 10 RFA No.517/2005 case of the plaintiff/Bank that it has credited Rs.1,68,000/- to the defendant account on 31.10.1991 as against reutrn of Duplicate D.D. In my view, for effective adjudication of the suit, Andhra Cements Limited and South Central Railway should have been impleaded as co-defendants to the suit. Neither the plaintiff/Bank nor the defendant/Irrigation Department have taken the right course of action. In view of the above, I am of the opinion that the impugned Judgment and Decree are liable to be set aside and the matter has to be remitted to the Trial Court with liberty to the defendant/Irrigation Department to implead Andhra Cements Limited and South Central Railways to the suit as parties to the suit. The plaintiff/Bank and the defendants shall be given an opportunity to produce additional documents and adduce further evidence on merits including on point of limitation. Trial Court shall dispose off the suit afresh, in accordance with law.
6. In the result, I pass the following Order: 11 RFA No.517/2005
Appeal is allowed and the impugned Judgment and Decree dated 17.01.2005 made in O.S.No.86/1999 on the file of II Addl. Civil Judge at Madikeri, are set aside and the matter is remitted to the Trial Court for fresh disposal of the suit in the light of the observations made above and in accordance with law. The appellants and the respondent are directed to appear before the Trial Court on 10.04.2014 for further proceedings, without notice.
Registry is directed to refund the Court Fee paid on the memorandum of appeal. No costs.
Registry is directed to return the L.C.R to the Trial Court.
Sd/-
JUDGE bnv*