Delhi District Court
M/S. Hans Raj Jain vs Punjab & Sind Bank on 19 December, 2009
Page numbers
IN THE COURT OF SH. SIDHARTH SHARMA: ASCJ, DELHI.
SUIT NO:112/04.
In the matter of:
1. M/s. Hans Raj Jain
C4F/102, Janakpuri,
New Delhi.
Through its sole proprietor:
Sh. A.K. Jain.
2. Sh. A.K. Jain
R/o C4F/102, Janakpuri,
New Delhi. ..........Plaintiffs
Versus
Punjab & Sind Bank
Malkaganj Branch,
Delhi110007.
Through its Manager. ...........Defendant.
SUIT FOR DECLARATION, PERMANENT INJUNCTION AND
RECOVERY OF RS.1,12,500/.
:JUDGMENT:
1. Facts of the case are that the plaintiff firm undertakes contractorship assignments. The plaintiff firm was having a current Account No.3054 with the defendant bank. It needed a bank guarantee for a sum of Rs.2,50,000/ to be given to the Delhi Development Authority in lieu of contractorship for some work for which the plaintiff firm approached the defendant bank. It is stated that the defendant bank demanded an Hans Raj Jain v. Punjab & Sind Bank Page numbers FDR of Rs.62,500/ and some security for the remaining amount. Accordingly, the plaintiff made an FDR for a sum of Rs.62,500/ and deposited the original sale deed of a shop situated at Kamla Nagar in the name of Sh. Trilok Chand Jain and executed various documents required by the defendant bank. After the completion of the work with the Delhi Development Authority, the bank guarantee deposited with the said authority was got realised by the defendant bank. Thereafter, the plaintiff firm approached the defendant bank for release of the abovesaid FDR and the original documents of the shop at Kamla Nagar. A written request was also made by the plaintiff by a letter dated 5.8.1997. However the plaintiff was instead apprised of the fact that there was a debit balance standing in his account due to overdraft facility availed by him. The plaintiff in his letter dated 6.8.1997 informed the defendant bank stating that he never applied for the alleged overdraft facility and his account be rectified. The plaintiff firm has alleged indulgance in malpractices by one Mr. Bhatia employee of the defendant bank. The plaintiff wrote several letters to the defendant bank including the letter dated 20.11.1997 but the defendant did not even given any reply to the same. It is the grievance of the plaintiff that the defendant bank is not releasing the FDR and the Hans Raj Jain v. Punjab & Sind Bank Page numbers original documentsof the shop which were kept as security for the abovesaid bank guarantee. The plaintiff firm received a letter dated 7.5.1999 from the defendant bank in which a debit balance of Rs.1,76,493.96/ was shown against it. Hence, the present suit praying for a declaration whereby the original documents pertaining to the shop at Kamla Nagar be returned and seeking permanent injunction against defendant restraining the defendant, their servants, agents, employees etc from disposing off, alienate or part with the title of the shop at Kamla Nagar which is in the name of Sh. Trilok Chand Jain and for decree of recovery of the principal sum of Rs.62,500/ alongwith interests.
2. In the written statement filed by the defendant bank, preliminary objections were taken that the plaintiff has not come to the court with clean hands and has suppressed the material facts and not entitled to equitable reliefs of declaration and permanent injunction. On merits, it has been averred that the plaintiff no.1 gave the FDR amounting to Rs.62,500/ to the defendant bank against the overdraft facilities prorvided to it. It has been further averred that the property No. D 174, Ground Floor, Kamla Nagar, Delhi is owned by Sh. Ravi Kumar Jain Hans Raj Jain v. Punjab & Sind Bank Page numbers and Sh. Rajesh Kumar Jain sons of Sh. Trilok Chand Jain and was mortgaged by the said owners against the financial facilities given by the defendant bank to said Sh. Ravi Kumar Jain and Sh. Rajesh Kumar Jain in account No.3144, 3097. It has been specifically denied that the plaintiffs ever deposited/handed over any title deed of alleged property. It is also averred that the FDR in question was deposited with the defendant bank with the undertaking that the bank is at liberty to set off/appropriate the amount of the said FDR in the account of the plaintiffs in case the plaintiffs fail to make the payment of overdue amount of the defendant bank at any time. It is also stated that the complaint lodged by plaintiffs bearing No. 467/9899 dated 8.10.98 before the Banking Ombudsman, Jeevan Bharti Tower has already been dismissed. Rest of the contents of the plaint were also denied.
3. In the replication filed by the plaintiff, the averments made in the plaint were reiterated and the contents of the written statement were denied.
4. On the pleadings of the parties following issues were framed on 7.3.2001: Hans Raj Jain v. Punjab & Sind Bank Page numbers
i) Whether the plaintiff has due cause of action to institute the present suit? OPP.
ii) Whether the plaintiff has concealed the material facts? Its effect?
iii) Whether the plaintiff is entitled to a decree of declaration and permanent injunction as prayed for?
iv) To what amount of decree the plaintiff is entitled against the defendant and with what rate of interest?
v) Relief.
5. In order to prove its case, plaintiff examined Sh. Anand Kumar Jain as PW 1. Sh. Paramjeet Singh Pahwa, Senior Manager of the defendant bank, Malkaganj Branch was examined as DW 1.
6. I have heard the counsel for both the parties and my issuewise finding is as under:
ISSUE NO.1
7. The burden to prove this issue was upon the plaintiff. The plaintiff has not been able to explain anything about the overdraft facilities which he took from the defendant bank. He had given a simple denial that he used to overdraw the facility even though the bank is a public sector bank and has proved the cheques issued and signed by the plaintiff Hans Raj Jain v. Punjab & Sind Bank Page numbers no.2. The defendant bank had also proved the accounts of plaintiff no.1 as well as plaintiff no.2 and substantial overdrafts were drawn by the plaintiff. The defence taken by the plaintiff was that he had sufficient amount for honouring the cheque but he did not prove any document to show that he had money in his bank account and he had not drawn any overdraft facility. On the contrary, the defendant bank through DW 1 has been able to prove various documents Ex DW 1/1 to Ex DW 1/7 which consist of the statement of account of the plaintiffs as well as Sh. Ravi Kumar Jain and Sh. Rajesh Kumar Jain who are the owners of the mortgaged property and the plaintiffs never deposited any title deed of alleged property. It is also shown that Sh. Rajesh Kumar and Sh. Ravi Kumar also took substantial loan from the defendant bank and had mortgaged their property. The plaintiffs have not been able to show that the shop of which the title deeds were allegedly mortgaged with the defendant bank belonged to them. The defendant witness has not been cross examined by the plaintiffs. The plaintiffs want to come out of their contractual obligation and had also filed a complaint with the Banking Ombudsman on 8.10.98 which was subsequently dismissed by the Ld. Ombudsman after hearing the bank. In view of the above evidence on record, I am of the opinion Hans Raj Jain v. Punjab & Sind Bank Page numbers that the plaintiff has no cause of action to file the present suit. ISSUE NO.2
8. The burden to prove this issue was upon the defendant. The defendant has been able to show that the plaintiffs concealed the material facts to the extent that they did not disclose that they had overdrawn the overdraft facility and did not pay back the same. The bank fairly used their right of set off of the FDR of Rs.62,500/. As the plaintiffs have concealed the material facts regarding their overdrawing of the account, I am of the opinion that the plaintiffs concealed the material facts and therefore, they are not entitled for relief of declaration and permanent injunction against the defendant bank. ISSUE NO.3
9. The plaintiff entered into a contractual obligation with the defendant and mortgaged their property for issuance of the Bank Guarantee by the defendant bank. It is the case of the defendant bank that the bank used its right of set off on the amount of FDR towards the liability of current account No. 3054 which belonged to the plaintiffs. The bank has also been able to prove the account statement of the plaintiffs Ex Hans Raj Jain v. Punjab & Sind Bank Page numbers DW 1/3 and Ex DW 1/6 which clearly shows the facility of overdraft having been used by the plaintiffs. The bank has also been able to establish that the owners of the property whose title deeds were mortgaged with the bank had taken loan from the bank as shown in the account statement Ex DW 1/1, Ex DW 1/2 & Ex DW 1/5. The bank had also proved the Form 84A jointly executed by Sh. Rajesh Kumar and Sh. Ravi Kumar as Ex DW 1/7. The plaintiffs did not examine the said Sh. Rajesh Kumar and Sh. Ravi Kumar who were the owners of the property whose title deeds were kept with the defendant bank. The plaintiffs do not have any locus standi to ask for the title documents of which the registered owners have taken a separate loan from the bank. It is also seen that the plaintiffs approached the ombudsman and filed a complaint on 8.10.98 which is Ex DW 1/D1 and the said complaint was disposed of by the Banking Ombudsman which has been proved on record as Ex DW 1/8 wherein the Ld. Ombudsman had held that bank has exercised its right of set off whereby the amount deposited as security for bank guarantee has been used to set off the overdraft account. The complaint was accordingly dismissed.
10. For claiming a declaratory decree, plaintiff has to establish a legal Hans Raj Jain v. Punjab & Sind Bank Page numbers right in status. In Mahabir Shumsher v. Loyds Bank, AIR 1968 Cal. 361, wherein, the plaintiff filed a suit for declaration alleging that defendant has wrongfully debited the amount to the other account, it was held : "Where the decree sought is not merely declaratory decree but there is also a prayer for a decree for a specified sum by way of consequential relief, such a suit can lie. A declaration which affects only pecuniary relationship cannot be granted. Consequently a constituent of a bank who does not sue for a decree for any money due to him on a closed account but wants a declaration to the effect that the bank has wrongly debited his subsisting current account is not entitled to such a declaration as it would be outside the purview of the Section and the power of the courts in India to make merely declaratory decrees being governed by Specific Relief Act." Similarly, for obtaining declaration inspite of the contractual obligation, it was held in Ramakrishana Pattar v. Narayana Pattar, AIR 1915 Mad. 584 where a declaration was claimed that a personal contract subsisted between plaintiff and defendant. The contract related to some tax. It was held that "declaration about contractual right could not be claimed or granted under Section 42 (old) of the Specific Relief Act. Also, in Tian Sahu v. Mool Chand Sahu, AIR 1922 Patna 432 plaintiff claimed Hans Raj Jain v. Punjab & Sind Bank Page numbers declaration that he would be entitled to contribution from defendant if and when occasion arose. It was held that such suit was not maintainable.
11. So far as decree for injunction against enforcing bank guarantee is concerned, it was held in U.P. Cooperative Federation Ltd. v. Singh Consultants (1988) 1 SCC 174, Bank Guarantee is an independent contract which cannot be affected by the disputes between the parties to the underlying transaction. The Courts should not normally grant injunction restraining performance of Bank Guarantee or Irrevocable Letter of Credit. As held by the apex court in General Technical Services v. Punj Sons Pvt. Ltd. AIR 1991 Supreme Court 1994, the bank should not be injuncted from getting the Bank Guarantee encashed in absence of fraud or irretrievable injustice between the parties. This proposition of law was reiterated in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works Pvt. Ltd. (1997) 6 SCC 450 : 1997 (3) R.C.R. (Civil) 134: 1997 A.I.R (SC) 2477 , where the Hon'ble Supreme Court held that in the absence of established fraud and not a mere allegation of fraud, the Court could not have granted an injunction relating to encashment of bank guarantee.
Hans Raj Jain v. Punjab & Sind Bank Page numbers
12. In view of the decisions as discussed aforesaid and in view of the evidence of the bank and nonexamining of the owner of the title deeds, I am of the opinion that the plaintiff is not entitled for decree of declaration or injunction as prayed. Accordingly, the issue is decided against the plaintiffs and in favour of the defendant bank. ISSUE NO.4
13. In view of the decision of Issues No. 1, 2 & 3 against the plaintiffs, the plaintiffs are not entitled to any amount or interest. RELIEF
14. As the plaintiffs have failed to prove their case, I am of the opinion that the suit of the plaintiffs is liable to be dismissed. Ordered accordingly. Decree sheet be prepared in terms of the order. No order as to costs. File be consigned to the record room.
PRONOUNCED IN THE OPEN COURT
th
ON: 19 December, 2009.
(SIDHARTH SHARMA)
ASCJ/DELHI.
Hans Raj Jain v. Punjab & Sind Bank