Delhi District Court
Bank Of Maharashtra vs M/S Sri Sai Tours And Travels on 24 October, 2007
IN THE COURT OF SH. MANOJ JAIN: ADDL. DISTRICT JUDGE:
DELHI
Suit No. 208/03
IN RE:
Bank of Maharashtra,
having its head office at Lok Mangal,
1501, Shivaji Nagar, Pune
and branch office at 5/67, Padam Singh Road,
Karol Bagh, New Delhi.
..................Plaintiff.
Versus
1 M/s Sri Sai Tours and Travels,
1574, Main Bazar,
Pahar Ganj,
New Delhi.
2 Sh C.S. Yuvraj,
3272,/28, Beedon Pura,
Karol Bagh,
New Delhi.
3 The Chairman and Managing Director,
Oriental Bank of Commerce,
Harsh Bhava, E Block,
Cannaught Place, New Delhi.
4 The Chief Manager
Oriental Bank of Commerce,
1649, Main Bazar, opp. Krishan Market,
Delhi.
Date of filing: : 12.09.2000
Date on which judgment has been reserved : 15.10.2007
Date of decision : 24.10.2007
1
JUDGMENT
1 Plaintiff bank had received a draft No.801503 dated 18.08.1997 for Rs.4,30,000/- through local clearing house on 03.09.1997. Defendant No.2 has been alleged to be the proprietor of defendant No.1 and the aforesaid draft had been submitted by defendant No.1 through its proprietor with Oriental Bank of Commerce and Oriental Bank of Commerce accordingly transmitted the aforesaid draft to the plaintiff bank for necessary collection and encashment. Plaintiff bank did not find any suspicion and under the bonafide belief that the demand draft had been sent for collection by a nationalized bank i.e. Oriental Bank of Commerce cleared the same. However, later on, it was learnt by the plaintiff bank that the aforesaid draft was in the list provided by the central office of the plaintiff bank amongst the lost/stolen demand drafts and the plaintiff bank immediately approached the defendant No.4 and apprised them about the aforesaid vital fact. Defendant No.4, however, informed that a sum of Rs.3,24,002/- was still lying in the account of defendant No.1 firm and the balance amount under the aforesaid draft had been withdrawn by the concerned account holder. Plaintiff bank requested the defendant bank to seize the account and mark the lien to the plaintiff bank. Letter was accordingly written on 18.10.1997 and the account was frozen by the defendant bank.
2 2 Simultaneously, plaintiff bank also lodged complaint with local police station at Pahar Ganj and FIR No.596/97 was accordingly registered.
3 Case of the plaintiff bank is to the effect that the demand draft was forged and fabricated one and was intentionally used by defendant No.2 as proprietor of defendant No.1 firm and they were not entitled for any payment under the aforesaid forged demand draft. It has been claimed that they collected the payment under the forged demand draft for some unauthorized person and they are, therefore liable to refund the entire amount with interest. However, as regards the liability of Oriental Bank of Commerce, plaintiff has restricted their claim to the balance amount of Rs.3,24,000/- but the interest on the aforesaid balance amount has also been sought from Oriental Bank of Commerce. It is in these circumstances that the suit has been filed.
4 It would be however, worthwhile to mention here that there are two identical matters between the same parties. Present Suit i.e. Suit No. 208/03 is with respect to draft No.801503 dated 18.08.1997 for a sum of Rs.4,30,000/- and the another suit has been registered as Suit No.209/03 which is with respect to draft No.801507 dated 02.09.1997 for a sum of Rs.5,20,000/-. All the allegations are identical. However, it is very pertinent to mention that as per the defendant bank only a sum of Rs.3,24,002/- is presently lying in the account of defendant No.1 firm. Thus, out of the total principal amount of Rs.9,50,000/- ( Rs.5,20,000/- + 3 Rs.4,30,000/-), defendant bank has in its possession an amount of Rs.3,24,002/-.
5 Summons were issued. However as far as defendants No.1 and 2 are concerned, they did not put any appearance despite there being publication and affixation and they both were accordingly proceeded against ex parte vide order dated 16.12.2002. However, defendants No.3 and 4 have resisted the suit and in their written statement, they have claimed that they were not aware about any alleged forgery and rather the plaintiff should have been careful as it was their own draft and they were the best persons to adjudge the genuineness of such draft. It has also been claimed that simply because the clearing house was a nationalized bank does not absolve the plaintiff bank in this regard and plaintiff bank should have cleared the draft after verification. However, at the same time, it has also been claimed by them that the balance amount of Rs.3,20,000/- was still lying with them and was put in sundry account and they have no objection in releasing the aforesaid amount to the plaintiff bank but without any interest thereon.
6 Following issues were framed on 04.02.2004:-
(i) Whether the defendants No.1 and 2 has encashed the cheque No.801503 unauthorizedly/illegally or not. OPP
(ii)Whether the plaintiff bank is entitled to recover the amount from the defendant No.1 and 2 or not ?OPP 4
(iii)Whether the plaintiff bank is entitled to recover amount of Rs.3.24 lacs from the defendants No.3 and 4?OPP
(iv)Whether the defendant No.3 and 4 are liable to pay interest on Rs.3.24 lacs and at what rate? OPP
(v)Relief.
7 I have heard ld counsel for the plaintiff bank and also Shri Umesh Suri, counsel for defendants No.3 and 4.
8 My issue wise findings are as under:-
ISSUE NO.1 and 2
Whether the defendants No.1 and 2 has encashed the cheque No.801503 unauthorizedly/illegally or not. OPP Whether the plaintiff bank is entitled to recover the amount from the defendant No.1 and 2 or not ?OPP
9 Instead of word 'draft' it seems that due to some inadvertence word 'cheque' has been mentioned in issue No.1.
10 It has already been noticed above that defendants No.1 and 2 are being proceeded against ex parte. Testimony on record, so far as it pertains to them, is totally unrebutted and uncontroverted. From the side of the plaintiff bank Shri G.S. Jagan Nath and Shri A.M. Gokhle have entered into witness box. Shri Jagan Nath has deposed that defendant No.1 is 5 proprietorship firm and defendant No.2 is its proprietor. He has also deposed that defendant No.1 was maintaining its account with defendant No.4 bank and defendant No.1 had illegally and unauthorizedly claimed the payment under the demand draft by forging signatures and other particulars. Demand draft has been proved as Ex. PW 3 / A and it has been deposed that defendant No.2 was having knowledge that such draft was not genuine and was in fact missing from the plaintiff bank's branch and, therefore, defendants No. 1 and 2 were not entitled for any payment under the aforesaid draft. Criminal matter is already pending before the concerned court. In view of unrebutted testimony of the witnesses examined by the bank and documents proved on record, it become apparent that the draft in question had been submitted for encashment by defendant No.1 firm with defendant No.4 bank where it was having an account and defendant No.4 bank accordingly sent the draft for clearance/collection to plaintiff bank and plaintiff bank cleared the same as by that time, it was not known to them that forgery had been committed and a stolen bank draft had been used. It might be possible that even the defendants No.1 and 2 might have been cheated by some one else but in such an eventuality it was incumbent for them to have appeared before the court and to have defended the matter. Since they have not bothered to defend the matter in any manner whatsoever, I do not find any reason to disbelieve the case set up by the plaintiff and it stands established that defendants No. 1 and 2 were not justified in receiving any amount under the aforesaid demand draft. Issue No.1 and 2 are accordingly decided in favour of the plaintiff bank and against the defendants No.1 and 2.
6 ISSUE NO.3 and 4
Whether the plaintiff bank is entitled to recover amount of Rs.3.24 lacs from the defendants No.3 and 4?OPP Whether the defendant No.3 and 4 are liable to pay interest on Rs.3.24 lacs and at what rate?OPP 11 As far as issue No.3 is concerned, defendants No.3 and 4 have no objection whatsoever in returning the balance amount of Rs.3,24002/- to the plaintiff. However, they have claimed that they are not liable to pay any interest on such amount. From the careful perusal of the record. I also do feel the same way . Plaintiff, when they detected the forgery, sent a letter to the defendant bank and informed them in this regard. Letter dated 18.10.1997 has been proved as Ex. PW 1 /4. In that letter, the plaintiff bank had also asked the defendant bank to expedite refund and in the meanwhile to give them a certificate that such amount was kept by them and account in question has been frozen by them. Defendant bank sent information to the plaintiff bank on the same day and it was certified that the account had been frozen and a sum of Rs.3,24,000/- was kept in sundry account. Concerned Investigating officer SI Chander Singh had also sent one letter to Oriental Bank of Commerce and such letter dated 19.09.1997 has been proved as Ex. DW 1 / 2 and in such letter regarding sealing of the account No.3855 (belonging to defendant No.1 and 2), concerned bank manager was requested not to disburse the amount to any one. In such a situation, the defendant bank was naturally not in a position to remit the 7 amount to any one including plaintiff. Admittedly, a meeting had taken place on 15.07.99 in the Committee Room cabinet Secretariat , Rashtrapati Bhawan, New Delhi and the minutes of the meeting have been placed on record and have been proved as Ex. PW 1/7 and the dispute between bank of Maharashtra ( plaintiff bank) with Oriental Bank of Commerce (defendant bank) was also considered and it was resolved as under:-
'' The committee, having regard to the fact that the relief to be sought by Bank of Maharashtra would primarily lie against the private party, permitted Bank of Maharashtra to implead Oriental Bank of Commerce as performa party. The committee, however, directed bank of Maharashtra to restrict the liability toward Oriental Bank of Commerce to Rs.3.24 lakhs, the amount lying with it on behalf of the party.
12 However, as already noticed above, since the account had been frozen as per the request of investigation agency and since the plaintiff itself had also requested the defendant bank to freeze , defendant bank was not in a position to remit the account to any one including the plaintiff. There was no one to prevent the plaintiff bank from contacting either the I.O. or approaching the concerned court where the criminal case was pending with a request for defreezing the account or refund of the amount. However, no action in this regard was ever taken by the plaintiff bank. Plaintiff bank could have very well approached the concerned criminal court and could have very easily sought refund of the amount on some conditions but for the reasons best known to the plaintiff bank, no step in this direction was ever taken by the plaintiff bank. In such a 8 peculiar situation, plaintiff bank is not justified in demanding interest upon the aforesaid amount from the defendant. More so, when the amount in lying in sundry account and did not yield any income in the shape of interest. Moreover, surprisingly even in the written statement, the defendant bank had made it loud and clear that it had no objection in refunding the aforesaid balance amount and was willing to release the amount as per the order of the court. This fact was made clear by the defendant bank in the year 2001 but despite that plaintiff bank did not move any application even before this court. Had any such application been moved, desired relief would have been granted to the plaintiff bank? Thus it becomes apparent that plaintiff can only legitimately recover the balance principal amount and not the interest. Issue No.3 is decided in favour of the plaintiff bank and against the defendants No. 3 and 4. IssueNo.4 is, however, answered against the plaintiff and in favour of the defendants No.3 and 4.
13 In view of my aforesaid discussion, suit of the plaintiff bank is hereby decreed and a decree of Rs.7,29,527/- is passed in favour of the plaintiff bank and against the defendants No.1 and 2 with interest @ 10% per annum from the date of filing of the suit till its realization. 14 A decree is also hereby passed in favour of the plaintiff and against defendants No.3 and 4 directing the defendants No.3 and 4 to refund the balance amount of Rs.3,24,002/- within four weeks from today to the plaintiff bank. In case said amount is not remitted within the aforesaid 9 period of four weeks, plaintiff bank would be held entitled to recover said amount with interest @10% per annum from the date of the decree till realization.
15 Suit is also decreed with cost. However, such cost would be recoverable from defendants No.1 and 2 only. I also make it clear that if defendant bank remits the balance amount, then plaintiff would give necessary adjustment in this regard while filing execution against defendants No. 1 and 2.
16 Decree sheet be prepared accordingly.
17 File be consigned to Record Room.
Announced in the open Court on this 24th day of October, 2007.
(MANOJ JAIN) ADDL. DISTRICT JUDGE: DELHI 10