Delhi District Court
Corporation Bank vs Sh. Arun Bhagwat Raut on 22 March, 2016
IN THE COURT OF SHRI A.K. AGRAWAL CIVIL JUDGE01
( WEST), TIS HAZARI COURTS, DELHI..
Unique ID No. : 02401C00827320114
CS No. 485/14
Date of Institution : 18.02.2014
Date of reservation of judgment : 17.03.2016
Date of pronouncement of Judgment : 22.03.2016
Corporation Bank
LIC Card Centre, New Delhi
having its Head Office at Mangalore
( South Kanara, Karnataka State)
and having a branch at Corporation Bank
LIC Card Dentre
13 & 14, First Floor, Old Market
Tilak Nagar, New Delhi18.
....................Plaintiff
Vs.
Sh. Arun Bhagwat Raut
S/o Sh. Bhagwat Revannath Raut
69/13, Swaminarayan Nagar, at PO Savda
TalRaver, District Jalgaon425502 ( Maharashtra)
Also at :
1. At POBramhani , TalRahuri
District Ahmednagar414 105 (Maharashtra)
2. IDBI Bank, Samarth Nagar
NeardShani maharaj Mandir
Aurangabad431001
3. LIC of India, 96A, POSavda
BO A/PSavda, TalRver
District: jalgaon425502 ( Maharashtra)
..............Defendant
C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 1/13
SUIT FOR RECOVERY
JUDGEMENT
1. Brief facts are that this is a suit filed by plaintiff bank through its Attorney Smt. Anuja Mehta, Manager of plaintiff bank, against the defendant for recovery of Rs. 1,75,550.48/ which amount has accumulated on account of credit card used by the defendant and consequent interest, service tax, late payment fee and other charges levelled on the outstanding amount, by the plaintiff.
2. As per plaintiff bank, the defendant had approached it for issue of one LIC credit card and a duly filled form was submitted by him in this regard alongwith attested copies of his PAN Card, Driving License, LIC ID Card, Pay slip, etc. After considering the said request, the plaintiff bank issued LIC credit card bearing no. 4628460001753003 to the defendant with a fixed sanctioned limit of Rs.35,000/ on 06.11.2009. The defendant used the said credit card for making purchases of goods/things from different stores and shops between 25.04.2010 to 12.01.2011. The amount of the above transactions were paid by plaintiff bank on behalf of defendant and the credit card account of the defendant was debited with the said amount.
3. It is further stated that by making use of LIC credit card, the defendant had duly accepted the terms and conditions of LIC credit card and he had also agreed to reimburse/remit the outstanding amount as reflected from his account statement/bills, within fifteen days of the receipt of said statement. The account statements were prepared and duly dispatched to defendant on 21st day of each month through courier, SMS, emails, etc. The defendant did not dispute the credit card account statement hence, he was liable to pay the entire amount as demanded by the plaintiff bank.
C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 2/13
4. It is further stated that the defendant failed to make payments of the outstanding amount for the use of credit card, despite receiving statements/ bills sent by plaintiff bank. Accordingly, the plaintiff bank issued a recall notice dt. 25.11.2013 to the defendant calling upon him to pay the amount of Rs. 1,75,550.48/ which was due and outstanding against his account as in October 2013. However, no reply was sent by the defendant to the said notice nor amount was paid. Hence this suit has been preferred by plaintiff before this court for recovery of Rs.1,75,550.48/ which amount includes Rs. 1,47,592.88/ as principal amount and Rs.27,957.60/ as interest, finance charges, late payment and overlimit charges, etc.
5. Though the suit was initially filed as a suit U/o 37 CPC, however vide order dated 18.02.2014, it was converted into ordinary suit of recovery. The defendant was duly served and he filed his Written statement on 18.07.2014.
6 In the written statement, defendant took the preliminary objection that the suit was bad for nonjoinder of necessary party i.e. LIC as the application form of credit card was issued by LIC Credit Card Services Ltd., and it does not bear the name of Corporation Bank. Further submits that this court does not have territorial jurisdiction to decide the present suit as all the transactions took place in Savda, Distt. Jalgaon, Maharashtra. Further alleges that plaintiff's AR took part in mediation proceedings wherein the matter was settled between the parties for Rs. 50,000/ however despite receiving the cheque of the aforesaid amount, the plaintiff bank later backed out from the settlement.
7. It is further submitted that the maximum sanctioned limit of defendant was Rs. 35,000/ and the card automatically gets blocked once this limit is exceeded. Hence the defendant cannot be saddled with a liability in excess of the maximum sanctioned limit. It is C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 3/13 averred that corporation bank is a stranger to the suit hence it does not have the right to sue plaintiff. It was denied that the defendant was liable to pay the amount as alleged by the plaintiff. Other averments of plaint were denied and prayer is made for dismissal of the suit.
8. On the basis of pleadings of the parties, following issues were framed:
1. Whether the plaintiff is entitled to the decree of sum of Rs. 1,75,550.48/ as prayed for ? OPP.
2. Whether the plaintiff is entitled to interest @ 2.5 % p.m till the date of realization as prayed for ? OPP.
3. Whether this court has jurisdiction to try the present suit ? Onus on parties
4. Whether the suit is bad for nonjoinder as well as misjoinder of necessary parties ? OPD
5. Relief.
9. During PE, the plaintiff bank examined only one witness, who is Sh. Manish Singh, the Manager of the plaintiff bank. In his testimony, the following documents were exhibited: "The affidavit in evidence of PW1 is Ex. PW1/A wherein the averments of the plaint have been reproduced. The other documents are : Ex. PW1/1 is the Application for LIC Credit Card, Ex. PW1/2 to Ex.
PW1/44 are Estatements/Bills, Ex. PW1/45 is Recall notice dated 25.11.2013, Ex. PW1/46 is Postal receipt dated 05.12.2013, Ex. PW1/47 is Computer generated card holder details / screen shot, Ex. PW1/ 48 is C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 4/13 Certificate under Bankers Book's Evidence Act, Ex. PW1/ 49 is copy of Terms and conditions, Ex.PW1/50 is Agreement dated 30.03.2009, Ex. PW1/51 is Agreement executed between OPUS Software Solutions Pvt. Ltd. and the plaintiff Bank, General Power of Attorney dated 22.07.2013 of Mrs. Anuja Mehra is mark E."
10. The witness was duly crossexamined andd discharged and PE was closed. In defendant evidence, defendant only got himself examined as DW1. He relied on his affidavit in evidence which is Ex. DW1/A. He was also crossexamined and discharged. DE was closed and final arguments were addressed on behalf of both parties.
11. I have now considered the rival contentions from both parties and perused the evidence on record. My issuewise findings are as under: 12 ISSUE No. 3
3. Whether this court has jurisdiction to try the present suit ? The onus was on the parties to prove their respective contentions whether this court had jurisdiction or not. As far as territorial jurisdiction of civil court is concerned, it is determined as per Sec 20 of CPC which reads as follows: Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction--
(a) The defendant, or each of the defendants where there are more than one, at the time of the commencement of the Suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 5/13 of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
With respect to territorial jurisdiction, the judgment of the Hon'ble Supreme Court in ABC Laminart Pvt. Ltd. vs A.P. Agencies, Salem AIR 1989 SC 1239 is highly relevant. It has been held by Hon'ble Apex Court in the said judgment and I quote: "(13) Under Section 20(c) of the Code of Civil Procedure subject to the limitation stated therefore, every suit shall be instituted in a court within the local limits of whose jurisdiction the cause of action, wholly or in part arises. It may be remembered that earlier section 7 of Act 7 of 1888 added Explanation III as under:
Explanation III In suits arising out of contract the cause of action arises within the meaning of this section at any of the following places, namely (1) the place where the contract was made (2) the place where the contract was to be performed or performance thereof completed (3) the place where in performance of the contract any money to which the suit relates was expressly or impliedly payable.
(14) The above Explanation III has now been omitted but nevertheless it may serve a guide.
There must be a connecting factor.
(15) In the matter of a contract there may arise causes of action of various kinds. In a suit C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 6/13 for damages for breach of contract the cause of action consists of the making of the contract, and of its breach, so that the suit may be filed either at the place where the contract was made or at the place where it should have been performed and the breach occurred. The making of the contract is part of the cause of action. A suit on a contract, therefore, can be filed at the place where it was made. The determination of the place where the contract was made is part of the Law of Contract. But making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. Ordinarily, acceptance of an offer and its intimation result in a contract and hence a suit can be filed in a court within whose jurisdiction the acceptance was communicated. The performance of a contract is part of cause of action and a suit in respect of the breach can always be filed at the place where the contract should have (been) performed or its performance completed. If the contract is to be performed at the place where it is made, the suit on the contract is to be filed there and nowhere else. In suits for agency actions the cause of action arises at the place where the contract of agency was made or the place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressly or impliedly payable under a contract. In cases of repudiation of a contract, the place where repudiation is received is the place where the suit would lie. If a contract is pleaded as part of the cause of action giving jurisdiction to the Court where the suit is filed and that contract is found to be invalid, such part of cause of the action disappears. The above are some of the connecting factors."
Hence as per the ratio of this landmark judgment of the Hon'ble Supreme Court, in contractual matters, cause of action arises at any of the places where (a) a contract is made or (b) where acceptance of a contract is communicated or (c) where a contract is C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 7/13 performed or is to be performed or (d) where money under the contract is either payable or paid; or (e) where repudiation of a contract is received.
13. Coming to the facts of the case, perusal of the Application form Ex. PW1/1 shows that it has been filled up by the defendant in Savda, Distt. Jalgaon, Maharashtra i.e. outside Delhi. So, the defendant did not come to Delhi for filling and submitting the said application form. The form was sent to Delhi for processing where the same was considered and allowed in the absence of defendant. So offer and acceptance of contract were effected at different places. In these circumstances, as per above judgment of Hon'ble Supreme Court, jurisdiction will be of that place where the acceptance of contract is communicated. In the instant case, the acceptance of contract i.e. sanction of LIC credit card was communicated to defendant at his native place at Savda, Distt. Jalgaon, Maharashtra where he resides/ works for gain, which is beyond jurisdiction of Delhi court.
14. As far as the place where the contract is to be performed is concerned, the defendant was at liberty to use the credit card at any place and its use was not confined to the native place of defendant. However the plaintiff bank has filed no document to suggest that the credit card was ever used in Delhi, by the defendant. Defendant has also denied having used it in Delhi. Hence there is no jurisdiction of Delhi Court even as per this parameter.
15. The next place which can be treated as the place where cause of action arose is the place where the money under the contract, is either payable or paid. Perusal of statement of account filed by the plaintiff bank shows that all payments which have been made by the defendant, are in cash. As per subclause no.4 (b) of clause 'D' of MITC (most important terms and conditions) Ex. PW1/49, a credit card holder could make payment of amount due C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 8/13 on credit card, by paying in cash in any branch of Corporation Bank in India. The plaint merely states that the payment were to be received in Karol Bagh Branch in the credit card account of defendant and later on at Tilak Nagar Branch of plaintiff bank, without specifying the place where cash payment was actually deposited by the defendant.
16. In the modern age of technology, all the accounts are maintained in digital form and there is no physical transfer of funds as may have happened in older days. An account maintained in digital form does not have any physical location and is server based. Anyone can access an account maintained in digital form from any part of the world and can also make transactions through the same. The processing of application form and maintenance of account by the plaintiff bank at a particular place, is its own internal affair with which the defendant is not at all concerned. In such circumstances, the place from where account is being operated by defendant, or the place from where the transaction is made or the payment is received, would be the place where the cause of action or its part thereof arises. This again rules out jurisdiction of Delhi Court.
17. As per the last requirement, the cause of action also arises at the place where the repudiation of contract is received. In the instant case, the recall notice has been served by the plaintiff bank upon the defendant, at his native address which is again beyond the jurisdiction of Delhi Court.
18. The plaintiff bank has instituted the present suit solely on the ground that it is maintaining the defendant's account at Delhi. In the application form filled by the defendant, there is no mention of either Karol Bagh Branch or Tilak Nagar branch of plaintiff bank. Further merely maintenance of account at a particular place, by either of the parties to a contract, cannot confer jurisdiction upon the court within whose jurisdiction, C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 9/13 such account is being maintained. Maintenance of account has nothing to do with institution and performance of contract.
14.The plaintiff bank ought to have instituted the present suit, where the defendant resided/worked for gain or where the cause of action or any part thereof, arose. In view of above observations and findings, in my considered opinion, no cause of action has arisen in Delhi and the territorial jurisdiction does not lie with this court.
This issue is decided in favour of defendant and against the plaintiff.
19. ISSUE No.4 Whether the suit is bad for nonjoinder as well as misjoinder of necessary parties ?
The onus to prove this issue was upon the defendant.
At the outset, it is pertinent to mention that the averment made in the plaint by plaintiff bank that defendant had approached it for issuance of LIC credit card, is incorrect as the application form through which credit card was allegedly applied by the defendant, had been issued by LIC Card Services Ltd. and not by the plaintiff bank and was signed by defendant in Savda, Dist. Jalgaon, Maharashtra. Infact there is no privity of contract between the plaintiff and defendant. The contract of plaintiff bank was with LIC Cards Services Ltd., which in turn had entered into contract with the defendant for issuance of credit card. Hence the said LIC Card Services Ltd. was a necessary party in the present suit but has not been made a party for reasons best known to the plaintiff. No effective relief can be granted to plaintiff in the absence of a necessary party.
20. However I do not find the suit to be bad for misjoinder of necessary party since the defendant had been provided with all the relevant documents to show that his C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 10/13 credit card account was to be maintained and managed by Corporation Bank, the plaintiff herein. Simply because the defendant did not read the contents of the agreement, he cannot assert that the Corporation Bank had no locus standi against the defendant.
However this issue is decided in favour of defendant and against the plaintiff for the reason that the suit is bad for nonjoinder of necessary party. 21. ISSUE NO. 1 and 2
1. Whether the plaintiff is entitled to the decree of sum of Rs. 1,75,550.48/ as prayed for ?
2. Whether the plaintiff is entitled to interest @ 2.5 % p.m till the date of realization as prayed for ? OPP.
Both issues are based on similar set of facts and hence decided together. From perusal of evidence on record, I do not find the case of plaintiff to be proved as per law. The plaintiff has examined only one witness in support of its case i.e. PW1 Manish Singh, the Manager of the plaintiff bank. He is also the Power of Attorney Holder of the plaintiff bank. The witness has got all the relevant documents pertaining to the credit card's sanction, use, statements, etc., exhibited in his testimony. However from Affidavit Ex. PW1/A and other documents, it is apparent that the defendant did not approach the plaintiff bank for credit card in his presence or that the credit card was sanctioned in his presence. None of the documents bear his signatures. He can neither identify the signatures of defendant nor can he identify the defendant. Infact PW1 has only deposed as per the documents of bank and is not personally aware of the above facts as his status is akin to that of a complete stranger except that he is an employee of plaintiff bank. As far as this case is C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 11/13 concerned, he is merely a person who has produced the documents and is not a competent witness who can prove those documents.
22. Moreover as per the plaint, the liability of defendant to pay the outstanding amount of LIC credit card was dependent upon receipt of statements/bills generated in this regard. No proof has been filed by the plaintiff as to when and in what mode and manner, the statements/bills were dispatched/intimated to the defendant. The plaintiff ought to have produced evidence in this regard but has failed to do so.
23. Furthermore, perusal of Ex. PW1/2 to Ex. PW1/44 and Ex. PW1/47, shows that the same are computer generated documents. The witness PW1 has also filed a Certificate regarding genuineness of statement of accounts which is Ex.PW1/48. However this document is neither in confirmity with the provisions of Sec 2A of the Bankers Book Evidence Act nor is as per the directions given by Hon'ble Supreme Court in the landmark case of Anvar P.V. v. P.K. Basheer, Civil Appeal No. 4226 of 2012, decided on 18.09.2014, pertaining to admissibilty of electronic evidence. Further the Certificate has not been proved by the person who has signed the same or by any person who can identify the signature of the said signatory, in case the signatory was not available. There is no recital as to who was having the control and supervision of the computers installed at the plaintiff bank. The plaintiff was under obligation to properly prove the above document and hence the person who had issued the certificate, should have also been examined. In such circumstances, document Ex.PW1/48 cannot be considered to be proved and accordingly, the other computer generated documents cannot be relied.
Hence both these issues are also decided in favour of defendant and against the plaintiff.
C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 12/13 24. RELIEF
In view of above observations and findings, the suit of the plaintiff stands dismissed. No order as to Costs.
Decree Sheet be prepared accordingly.
File be consigned to record room after due compliance.
Announced in the open court ( A.K. Agrawal) today 22.03.2016 Civil Judge01 (West)/Delhi C.S No. 485/14 Corporation bank vs Arun Bhagwal Raut 13/13