Bangalore District Court
Ramesh B.Jain vs H.D.F.C. Bank Limited on 10 December, 2024
KABC0A0023372007
IN THE COURT OF THE XXVI ADDL. CITY CIVIL &
SESSIONS JUDGE, AT MAYO HALL, BENGALURU (CCH.20)
P r e s e n t:
Smt.Sujata.M.Sambrani, B.Com. LL.B.,
XXVI Addl. City Civil & Sessions Judge, Bengaluru.
Dated this the 10th day of December, 2024
O.S.No.26401/2007
Plaintiff:- Sri.Ramesh.B.Jain,
S/o Babulal Jain,
Aged about 29 years,
Proprietor, M/s.Millions Selections,
Ambica Cloth Market,
No.70, D.K.Lane, Chickpet Cross,
Bengaluru-560 053.
[By M/s. Jose Sebastian & Associates-
Adv]
Vs.
Defendants:- 1. H.D.F.C. Bank Ltd.,
BWSSB Extension Counter,
Cauvery Bhavan, K.G.Road,
Bengaluru-560 009,
Rep, by its Chief Officer/Manager.
2. EDC Machine Risk Manager,
HDFC Bank Ltd., CMH Road,
Indiranagar, Bengaluru-560 038.
2 OS No.26401/2007
3. Bangalore Area Manager,
HDFC Bank Ltd, CMH Road,
Indiranagar, Bengaluru-560 038.
[By Sri.JR-Advocate]
Date of Institution of suit: 04.08.2007
Nature of the Suit (Suit for Money Suit
Pronote, Suit for Declaration and
Possession, Suit for Injunction,
etc.):
Date of Commencement of 26.02.2009
recording of evidence:
Date on which the Judgment was 10.12.2024
pronounced:
Total Duration:
Years Months Days
17 04 06
(Sujata.M.Sambrani)
XXVI Addl. City Civil Judge, Mayo Hall,
Bangaluru.
J U D G M E N T
This is a suit filed by the plaintiff for recovery of amount of Rs.2,50,000/- from the defendants, together with current and future interest, from the date of suit till the date of realization.
3 OS No.26401/2007
2. Brief facts of the plaint are as under:-
That, the plaintiff is the proprietor of M/s. Millions Selections, who is engaged in textile business and having its business place at No.70, Ambica Cloth Market, Chickpet, Bengaluru and has been doing both retail and wholesale business.
It is the further case of the Plaintiff that, they are doing the business both on credit and cash apart from selling the products on the credit card basis. The Plaintiff had account with the first defendant Bank at Cauvery Bhavan Branch, Bengaluru and having current account vide No.5092290001782. The plaintiff has started account with the first defendant Bank during June, 2004 and at the time of the commencement of the business, the defendant bank provided EDC Machine for acceptance of credit and debit cards, so also sent cheque book and debit cards from the Bank along with the covering letter. Subsequently, a Letter 4 OS No.26401/2007 was sent from the First Defendant Bank narrating the discount rates with regard to the use of the credit card.
It is the further case of the Plaintiff that, it has been doing the business by making use of the EDC Machine with regard to the credit card as well as the debit card transaction and the transaction was quite satisfactory for the month of June and July, 2004. During the month of August, 2004, one A.Yousuff of Coimbatore approached the plaintiff for the purchase of suiting, shirting's and sarees and after selecting certain items, the said A.Yousuff made payments of Rs.38,500/- by using EDC Machine and so too A.Ahmed placed order for textile item for Rs.36,500/- and thereafter, the credit cards were all inserted in the EDC machine, which gave approval and also after obtaining the charge slip and verification of the specimen signature, the bills were cleared by delivering the goods. On the same day evening, they once again approached the plaintiff for procurement of some more textile items and accordingly, 5 OS No.26401/2007 A.Yousuff purchased materials worth about Rs.34,450/- and A.Ahmed purchased goods worth Rs.33,570/- thereafter, A.Yousuff taken sarees and other mix design items to the tune of Rs.38,560/-. With regard to the said respective purchases, credit cards were inserted to the EDC machine for payments, which were approved and after taking charge slip and on verification of the signatures the goods were delivered. On the same day evening at the time of closing the business, the plaintiff taken Batch closed as well as well as settlement accepted copy with regard to 1 to 5 transactions through EDC machine. On 05.08.2004, morning the HDFC Bank sent account extract giving the particulars of the transactions took place on 04.08.2004. The plaintiff also got statement of account from HDFC Bank periodically, wherein the statement for the month of August, 2004 discloses that, the amount of Rs.1,86,768.40 was remitted to the account of the plaintiff. Inspite of the entry made in the account, the amount was not released by the Bank. The 6 OS No.26401/2007 plaintiff was obliged to approach the bank manager of the first defendant with regard to the release of the amount, but the bank manager evaded on one pretext or the other, which prompted the plaintiff to issue complaints to the Managing Director of HDFC bank, Karnataka Area Chief Manager, Bangalore Area Manager as well as EDC Card Risk Operator/Manger. Since no proper action was taken, the plaintiff got issued a Legal notice on 10.09.2004 to the managing Director of HDFC Bank, Mumbai. A reply was sent on 20.09.2004 to the HDFC Bank. In fact, they ventured to deny the liability on the ground that, the transactions were done without proper and valid documents, which are required by the Bank in settling the issue for that, the plaintiff produced all the documents to the Bank. Subsequently on 02.10.2004 once again a notice/reminder was sent through the advocate, to the defendants, for which an evasive answer was sent by the 7 OS No.26401/2007 Bank. Inspite of various contacts, personal visits no purpose was served.
It is the further case of the Plaintiff that, the defendants are due in a sum of Rs.1,86,768.40 as on 04.08.2004 till the date of filing the suit. They have not released the said amount for the willful negligence on their part. After making entry in the account extract, it is not open for the bank to withhold the amount. As such, the plaintiff is entitled to interest on the principal amount from 05.08.2004 till the date of filing suit, which comes to about Rs.90,000/- in all, which the defendants have not released and the due comes to Rs.2,76,768.40 wherein the plaintiff has restricted his claim to Rs.2,50,000/- only. Therefore, the plaintiff has filed this suit for recovery of the said amount from the defendants.
3. In pursuance of the suit summons, the defendants appeared and filed written statement.
8 OS No.26401/2007
4. The Defendants, in the written statement, contended that, the suit is not maintainable either in law or on facts of the case and the same is liable to be dismissed. That, the suit suffers from want of jurisdiction. That, as per the agreement executed between the Plaintiff and the defendants, only the Courts at Mumbai have the exclusive jurisdiction with regard to any dispute between the plaintiff and defendants. As such, this court does not have the jurisdiction and on this ground the suit has to be dismissed.
It is the further case of the Defendants that, the suit has not been filed within the period of limitation and the suit has to be dismissed on the said ground. The plaintiff has furnished the invoices dtd. 04.08.2004 and the suit ought to have been filed on or before 04.08.2007, but the suit has been filed on 03.08.2007, which is not maintainable. The suit fails for non joinder of necessary parties. The defendants are not aware whether the plaintiff did business both on credit or on cash or on credit card. 9 OS No.26401/2007 But admitted that, the plaintiff has an Account in their Bank at the Cauvery Bhavan branch. It is further admitted that, the plaintiff was provided with Electronic Data Capturing (EDC) Machine, for acceptance of credit and debit cards. The defendants have denied with regard to the purchase of goods by the said A.Yousuff and A.Ahemd. It is further denied by the defendants that, the EDC machine gave approval after obtaining the charge slip and verification of the specimen signature the bills were cleared after delivering the goods. It is stated that, mere swiping of the credit card in the EDC machine and the printing of the receipt does not amount to an approval of the transaction. The five bills at Annexure-C to G are specifically denied by the defendants. The documents furnished at Annexure-H, J and K are being used by the plaintiff to suit his own convenience. It is admitted that, a sum of Rs.1,86,768.40 was remitted to the account of the plaintiff. However, the said remittance is subject to the condition that, the 10 OS No.26401/2007 transaction pertaining to the said remittance being lawfully done in accordance with the accepted norms and regulations of the defendants Bank. The defendants provided a facility of processing payments to merchant establishments for use of credit/debit cards by customers visiting the merchant establishments. The merchant establishments have to swipe the credit card through the EDC machine. The credit card will contain the name of the cardholder, the validity period of the card, the card number, the name of the bank issuing the card, the signature of the cardholder and the agency (VISA/ MASTER) processing the payment. The EDC will read the aforesaid information, which is stored in the magnetic strip behind the card and transmit the information to the Bank which has issued the credit card. The Bank issuing the credit card will process the transaction which is again re-transmitted to the merchant establishments. The said re-transmission is printed by the EDC and the print out so taken is called as a charge slip. If 11 OS No.26401/2007 the information on the charge slip machines with that of the credit card furnished by the customer, the transaction is complete. The role of an EDC is only to process the information between the merchant establishment and the Bank issuing the card. The payment to be made to the merchant establishment is in effect done by the Bank issuing the card.
It is the further case of the Defendants that, the plaintiff has accepted a fraudulent credit card. The said transactions have been questioned by the cardholder themselves. Further more, it has been specifically stated that, the credit cards used in the present transactions have been done so by people other than the card holders. The plaintiff has chosen not to sue the aforesaid A.Yusuf and A.Ahmed, they being the purported credit card holders. If the plaintiff has not received money for the goods sold, it is only natural that, he sues the purchasers namely A.Yusuf and A.Ahmed for the said amounts. The defendants being 12 OS No.26401/2007 only the processing bank is not in any way liable for the said amounts. The plaintiff has also failed to implead the bank issuing the credit card. This only goes to show that, the plaintiff intends to make an unlawful gain at the cost of the defendants. Further more, it is stated that the plaintiff in connivance with the said Yusuf and Ahmed have fabricated these transactions with intent to make unlawful gain. The transactions purported to have been done by the said Ashamed and Yusuf is specifically denied as false, fabricated and conducted.
It is the further case of the Defendants that, it has come to the light of the defendants that, numerous credit cards have been obtained by various people by furnishing the address and contact details, same as that, of the plaintiffs. There are outstanding amounts payable against these said credit cards which have not been paid till date. It is strongly suspected that, the plaintiff has obtained the said credit cards under dubious names with an intent to 13 OS No.26401/2007 defraud the defendant banks. It is denied that the defendants are due and liable for a sum of Rs.1,86,768.40 as on 04.08.2004. There is no negligence on the part of the defendants as alleged by the plaintiff. The plaintiff is not entitled to the principal or the interest amounts as claimed by him. The plaintiff has been totally negligent in accepting a fraudulent credit card. The defendants have not in any way delayed the payment on whimsical grounds. In fact, it is the plaintiff who has delayed in responding to the defendants. The defendants act in withholding the said amount from the plaintiff is wholly justified for the reasons stated in the above paras. It is stated that the EDC machine facility has been withdrawn from the Plaintiff premises as the same has been misused as stated in the above paras. As such the question of providing them with the said facility does not arise at all. Therefore, the defendants have prayed to dismiss the suit with costs.
14 OS No.26401/2007
5. In view of pleadings of both parties, following issues are framed by my learned predecessor:-
1. Does plaintiff prove that, the defendants were liable to pay a sum of Rs.1,86,768.40 as on 04.08.2004?
2. Does plaintiff proves that the defendants liable to pay interest on the said amount from 05.08.2004?
3. Does defendant proves that, the court has no jurisdiction to try the suit?
4. Does the defendant prove that the suit is barred by time?
5. Does the defendant prove that the suit is barred by non joinder of necessary parties?
6. Does the defendant further prove the plaintiff has colluded with one A.Yousuff and A.Ahmed for fabricating the transactions with intention to make wrongful gain?
7. Whether plaintiff is entitled for suit claim?
8. What decree or order?
6. In support of plaintiff's case, the plaintiff, is examined as P.W.1. He has got marked 37 documents as 15 OS No.26401/2007 Ex.P.1 to Ex.P.37. On behalf of defendant one Mr. Satish Kumar.S. filed the Evidence affidavit in lieu of Chief Examination, as D.W.1. But, the witness DW.1 had left the job and unable to appear, it is taken as DW.1 is not offered for cross examination, as per order sheet dtd. 01.08.2011 and one Mr.Jayakrishnan is examined as DW.2 and through DW.2, 3 documents have been marked as per Exs.D.1 to Ex.D.3.
7. Heard the arguments and also perused the Written Arguments.
8. For the reasons stated in the subsequent paragraphs, I answer above issues as follows:-
Issue No.1 :- In the Affirmative Issue No.2 :- In the Affirmative Issue No.3 :- Already decided Issue No.4 :- In the Negative Issue No.5 :- In the Negative Issue No.6 :- In the Negative Issue No.7 :- Partly in the Affirmative Issue No.8 :- As per final order for the following 16 OS No.26401/2007 R E A S O N S
9. Issue No.1:-
The plaintiff inorder to establish the suit claim, examined himself as PW1 and filed affidavit in the form of chief examination, wherein he has reiterated the plaint averments. Insupport of his chief examination, he has produced 37 documents, which are marked as Ex.P1 to Ex.P37. As per his evidence, the plaintiff being the business man, selling their products on credit and also on cash. The plaintiff was using machine by accepting the credit and debit cards. He was having the bank account at Cauvery Bhavan (BWSSB Extension Counter) Branch, Bangalore in HDFC Bank. This EDC machine was issued by the defendant Bank. In this regard, the plaintiff has produced the letter issued by the HDFC Bank dtd.18.06.2004. The Ex.P1 reveals that, the plaintiff opened the bank account with the defendant Bank, during the month of June 2004 and the defendant has provided 17 OS No.26401/2007 EDC machine for accepting the credit and debit cards. The plaintiff has also sent cheque book and debits cards from the bank along with covering letter. Based on this Ex.P1, it can be held that, the defendant bank has issued EDC machine to the plaintiff for receiving payments from the customers. This fact is not disputed by the defendants.
10. It is further contended by the plaintiff that, subsequently a letter was sent by the defendant No.1 bank narrating the discount rates with regard to the use of credit card. In this regard, the plaintiff has produced the said letter dtd.19.06.2004, as per Ex.P2, which reveals the said facts. The said fact is also not disputed.
11. Thereafter in the month of August 2004, one A Yousuff of Coimbatore approached the plaintiff for purchase of suiting's, shirting's and sarees and he used credit card for making payments for the purchase of goods worth 18 OS No.26401/2007 Rs.38,500/-. On the same day, A. Ahmed also placed an order for Rs.36,500/- towards the textiles items and he also used credit card for making payments by using the EDC machine. On the same in the evening again the said A Yousuff purchased the materials worth Rs.34,450/- and A. Ahmed purchased goods worth Rs.33,570/-. Thereafter A Yousuff again purchased sarees and other mix design items worth Rs.38,560/-. All these payments were made by using credit cards and said credit card was inserted in the EDC machine issued by the defendants. On the same date, evening at the time of closing the business, the plaintiff has taken printout of batch closed as well as statement accepted copy with regard to transaction Nos.1 to 5 through EDC machine. In this regard, the plaintiff has produced the said payment receipts dtd.05.08.2004, which is marked as Ex.P3.
12. The defendants have admitted that the plaintiff was provided with an electronic data capturing machine for 19 OS No.26401/2007 acceptance of credit and debit cards by the defendant bank. Even it is specifically admitted by the defendant that a sum of Rs.1,86,764.40 was remitted to the account of the plaintiff and the same was not released to the plaintiff. But it is denied by the defendant that mere swiping of the credit card in the EDC machine and the printing of the receipt does not amount and approval of the transaction. The said remittance of Rs.1,86,768.40 is subject to condition that the transaction pertaining to the said remittance being lawfully done in accordance with the accepted norms and regulations of the defendants. Thereby the defendants have admitted remittance of Rs.1,86,768.40 to the account of plaintiff, but specifically contended that the said remittances subject to lawful transaction as per the norms and regulations of the bank. Therefore, now the question before the court is that, whether the said transactions for Rs.1,86,768.40 were being done in 20 OS No.26401/2007 accordance with the accepted norms and regulations of the defendants?
13. In this regard, the defendants have specifically stated in their written statement with regard to the norms and regulations of lawful transactions in Para No.8 of the written statement. In Para No.8(b), it is stated that the bank issuing credit card will process the transaction which is again re-transmitted the merchant establishments. The said re-transmission is printed by the EDC machine. The printout so taken is called as a charge slip. If the information on the charge slip matches with that of the credit card furnished by the customer, the transaction is complete.
14. In this case, the plaintiff on 04.08.2004 transacted with A Yousuff and A Ahmed through credit cards and inserted the said credit cards in the EDC machines which gave approval and also there after obtained the charge slip 21 OS No.26401/2007 and after verification of the specimen signature, the bills were cleared by delivering the goods. The plaintiff has inserted the credit cards of said A Yousuff and A Ahmed in the EDC machine provided by the defendants and collected payments and EDC machine has approved the transaction and after taking the charge slip and on verification of signatures bills have cleared by the plaintiff. In this case, the plaintiff generated the printouts, that is charge slip which can be held as completion of transaction as stated by the defendant in the written statement of Para No.8(b). Therefore based on the written statement averments, it can be held that, the charge slip generated by the plaintiff is a complete and successful transaction.
15. As per Ex.P3- the merchant payment report generated on 05.08.2004 issued by the defendants bank clearly reveals that the five transactions are stated by the plaintiff was transacted on 4/8/2008 for an amount of 22 OS No.26401/2007 Rs.1,86,768.40 and out of the said transactions, one was the international card and 2 were master cards that is domestic cards. The said report reveals that, totally 3 cards used by the customer on 04.08.2004. This Ex.P3 also reveals that this amount was remitted to the account of plaintiff. The plaintiff has also produced one more merchant payment report for the month of July 2004, which reveals that on 25.07.2004, the similar other Master Cards were used by the other customers with the plaintiff and an amount of Rs.38,500/- was remitted and released to the account of the plaintiff. This merchant payment report is very similar to that of Ex.P3 except the use of international card. Therefore, it can be held that similar merchant payment reports generated by the defendant bank after the use of EDC machines and the said amount was released to the plaintiff.
23 OS No.26401/2007
16. The Ex.P5, 6 and 7 are the chargeslips generated on 04.08.2004 for the amounts Rs.1,81,580/- Rs.9000/- and Rs.1,81,580/- respectively, which reveals that, after the completion of the transactions, these charge slips are generated. These documents are not disputed.
17. The statement of accounts of the plaintiff maintained in the defendants bank is produced by the plaintiff, which are marked as Ex.P8 to 20. The Ex.P8 is pertaining to the month of August 2004 and September 2004, Ex.P9 is pertaining to the month of March 2008, Ex.P10 is statement of account for the month of April 2008, Ex.P11 is pertaining to April 2008, Ex.P12 is pertaining to April 2007, Ex.P13 is pertaining to February 2008, Ex.P14 is pertaining to January 2008, Ex.P15 is pertaining to May 2008, Ex.P16 is pertaining to May 2007, Ex.P17 is pertaining to July 2002, Ex.P18 is pertaining to September 2007, Ex.P19 is pertaining to October 2007, Ex.P20 is 24 OS No.26401/2007 pertaining to December 2007. These documents shows that, the transaction made by the plaintiff with the defendant bank. These documents are not disputed by the defendants.
18. On 14.08.2004, the plaintiff has issued representation to the defendant bank as per Ex.P22, which reveals that, by issuing this letter, the plaintiff has sought to release of Rs.1,86,688.40 by the defendant bank. Thisletter was immediately issued by the plaintiff within 10 days of the transaction. The contents of the letter reveals about the similar facts as stated in the plaint. By issuing this letter, the plaintiff called upon the defendants to release the funds forthwith to avoid further complications. Thereafter on 11.09.2004 again the plaintiff has issued legal notice as per Ex.P23 to the defendants calling upon them to release the funds forthwith. On 20 th of September 2004, the defendant bank has issued reply as per Ex.P26 stating that an additional training was conducted by the bank to 25 OS No.26401/2007 reinstate the acceptance procedures and specially confirming the method of acceptance of international cards on the machines. Also it was clearly stated that, when an international card is accepted on the EDC machine, the clients need to obtain some identification proof from the card holder so as to confirm the identity of the holder of the card and it was informed that the clients need to obtain an ID proof which is internationally accepted and issued by a governmental body recognized globally. It was suggested to receive a copy of the passport driving licence based on that country to get the valid ID proof of the card holders. The transactions processed by the plaintiff are kept on hold. The said transactions need to be supported with identification documents of the card holders. But the plaintiff with absolute disregard to the procedures as outlined above accepted international cards without complying the requisite acceptance practices and failed to receive and collect the documents. Hence defendants have 26 OS No.26401/2007 taken up the contention that the plaintiff has not followed the procedure while using the EDC machine by receiving the identity cards which are globally accepted when the international cards are accepted by the clients.
19. According to defendants, the amount of the plaintiff was withheld for the first reason that, the plaintiff has not taken the ID proof of the customers. Secondly, the said transactions are taken place by using fraudulent transactions.
20. No doubt, the plaintiff has not produced any identity cards of his customer, who have transacted on 04.08.2000. But on the said sole ground, his funds cannot be retained by the defendant bank, as the same is not the mandatory and statutory requirements. Even it is not mentioned in the Ex.P3, the Mercantile Agreement. 27 OS No.26401/2007
21. Further the defendants in their reply, further stated that, transactions of the plaintiff were under investigation and hence they will continue to hold the funds until the point that the investigations are completed and the HDFC Bank is adequately satisfied with the verification of the transactions. This reply reveals that the defendant bank was verifying about the transactions of the plaintiff whether there is any genuine or fraudulent transactions and they stated that until the completion of the investigation they will hold the funds. If that is so, the defendant bank after the investigation would have reported or intimated the same to the plaintiff whether the said transactions are fraudulent transactions or genuine.
22. Even similar reply was given by the defendant bank on 09.10.2004 stating that the matter was still under investigation, when such being the case, if the investigation was really conducted by the defendant bank there would be 28 OS No.26401/2007 some investigation report. Merely because the plaintiff has not obtained necessary identity documents from the customer, his funds remitted through the credit cards from the use of EDC machine issued by the defendant cannot be with held by the defendants.
23. The defendants have also led evidence in this case. The Legal Manager at HDFC Bank Ltd., by name Satish Kumar has examined as DW1 and filed examination in chief supporting the written statement. Apart from the pleadings, this Sri. Satish Kumar has stated in his chief examination that, it has come to the knowledge of the defendants that, numerous credit cards have been obtained by the plaintiff in different names by furnishing the same address and contract details as mentioned in the aforesaid Merchant Agreement. The details of the same are mention below:-
(a) R. Asokan- Card No. 5176351000598486;
(b) M. V Sreekanta- Card No.4346781000399865. 29 OS No.26401/2007
(c) Bhanwarlal Motilal- Card No.4346781000399915.
24. There are outstanding amounts of Rs.12,80,992.75 ps payable against these said credit cards, which have not been paid till date. The defendants found in their internal investigation that the plaintiff himself had produced all foregoing cards vide given false, concocted and fabricated information and he is in due of Rs.12,80,992.75ps as on February 2011 to the defendants. It is provided in the Card Member Agreement that if the defendants were convinced that the plaintiff had procured the cards vide giving false and fabricated information, they should have lien over the deposits/account of the plaintiff. As in this case, it was concluded in the internal investigation of the defendants that, the plaintiff had procured the cards vide giving false and fabricated information, the defendants exercised the option of lien and hold back an amount of 30 OS No.26401/2007 Rs.1,86,768.40ps from the plaintiffs Account bearing No.5092290001782.
25. Thus, the DW1 has introduced new facts in his chief examination stating that, an amount of Rs.1,80,992.75ps procured under the different cards by the plaintiff by giving false and fabricated information. The defendants after internal investigation, procured the cards provided by the plaintiff and they got to know that the plaintiff has procured these cards by false and fabricated information. But in this regard, there is no pleadings pleaded and no supportive documents produced. Even, this DW1 not tendered for complete cross examination. Hence, the said facts cannot be taken for consideration.
26. The defendants have produced Ex.D2, which is according to defendants is, Investigation Report. But on perusal of this Ex.D2, it appears that, it is a document 31 OS No.26401/2007 prepared by the Manager, Risk Control Unit by name Umashankar Krishnan, who has issued this document has stated that, "whom soever it may concern" and furnished the information that, the frauds alleged by the debit and credit cards during the month of August 04 th and September 04th through the plaintiff business. The EDC machine issued to the plaintiff bearing No.47004685. This document also reveals that, Visa/Master cards swiped in the EDC machine on 25.07.2004 and on 04.08.2004 were fraud cards and swiped by fraudulent means. But there is no detailed report of investigation, how these information gathered by this Risk Control Unit. Therefore there is no detailed report with regard to investigation conducted by this Risk Control Unit. In the absence of such detailed report as to the nature and description of the investigation, to arrive at the conclusion that, these are the fraudulent transactions. Except this statement generated in the computer, there nothing on record to believe that, this the investigation 32 OS No.26401/2007 report prepared scientifically based on the thorough investigation. Moreover, the defendants have not examined this Risk Control Unit, who is author of this document. Mere production is not sufficient to hold that this is proved as per law. Hence, it is held that, the defendants have failed to prove this material document.
27. Thereafter, the defendants have examined one more witness, by name Jayakrishnan as DW2 working as Manager attached to Debt Management serving at HDFC Bank Ltd., who also filed affidavit in the form of chief examination and supported the version of the written statement. During the course of cross examination, this DW2 has testified that, Ex.D2 is a computerized report and was prepared after the receipt of the plaintiff. Thereby it appears that, it was not a thorough investigation and scientific investigation conducted by the defendants, after receipts generated by the plaintiff towards disputed 33 OS No.26401/2007 transactions. Therefore no validity and legality can be attached this documents.
28. The testimony of this DW2 play an important role in deciding the dispute between the parties. During the course of cross examination, he has specifically testified that, "on the said transaction is based on credit card. It is true to suggest that, EDC machine was installed in the business premises of the plaintiff. EDC machine works on the basis of data's will transfer from credit card to EDC machine. Intern transmitted to the bank which issued the credit card. After receipt of data from EDC machine that bank which issued the credit card will transfer to the EDC machine. If data's are matching with the bank records than the bank will transmit information to the EDC machine. The defendant further suggest that, before charge slip is generated the EDC is approve the credit card. Once credit card is approved machine will work automatically and issue charge slip."
"In this case in all five transactions are involved. In respect of five transactions machine has approved the credit card and charge slip is generated. The Ex.P29, 31, 33, 35 and 37 are generated charge slip. Inrespect of the above said charge slips the credit card issuing bank has okayed the credit cards thereafter EDC machine 34 OS No.26401/2007 has generated the charge slip. As EDC machine as accepted the credit card, the HDFC bank will remitted the amount to the account of plaintiff.
"The transactions were made by 3rd party by either using visa card or master card. Master card is controlled by the master card agency and visa card controlled by visa card agency. It is true to suggest that once card is swipe in ECD machine information will go to concern agency either visa agency or master card agency. All 5 transaction in this case are made by using master card. After swiping the card first information is go to the bank which have installed the ECD machine then got the card issuing bank. After that master card issuing agency will give clearance to our bank. It is true to suggest that thereafter we will remit the amount to the account of our customer in this case plaintiff. It is true to suggest that in this case plaintiff has submitted charge slip copy with the signature of his customer and bill to defendant bank. After charge slip is generate visa agency, master card agency, as well as the bank which installed EDC machine are the authority to decide gene unity of such cards swip. It is true to suggest that only after getting clearance from the visa or master card agency bank will remit the amount."
29. The DW2 further testified that, "Defendant bank has not issued any legal notice or intimation in respect of suit 5 transaction regarding card used is fraudulent card. In respect of 5 transaction our bank has lodged police 35 OS No.26401/2007 complaint to the police. I am not aware whether copy of complaint is produced in this case or not. I am not aware date of complaint. It is true to suggest that plaintiff had issued notice demanding payment to defendant bank & also address notice to our managing director. It is not true to suggest that bank has not taken any steps on receipt of demand notice, but we have informed the plaintiff that the transaction are fraudulent, defendant is not liable to pay the amount. After receipt of complaint from plaintiff investigation was commenced. It is true to suggest that complaint was also given to manager of EDC machine risk manager. After generation of charge slip plaintiff deliver the goods to his customers.
30. This testimony of DW2 reveals that, the transactions made by the plaintiff is in accordance with Mercantile Establishment Agreement and only after the approval of EDC machine, the charge slip were issued with respect to all the financial transactions, which are now disputed before the court. This DW2 has specifically admitted that, Ex.P29, 31, 33, 35 and 37 are the said charge slips, which were generated only after the approval of EDC machine. Even it is specifically admitted by the DW2 that, the amount generated under these five 36 OS No.26401/2007 transactions amounting to Rs.1,86,768.40 is with them. When such being the case, it is held that, the plaintiff is entitled for release of said amount, to which the defendants have no right to retain. Therefore the defendant bank is under the obligation to release the amount of plaintiff immediately.
31. It is also very relevant to note here that, after the receipt of complaint from the plaintiff, the investigation was commenced by the defendants. According to defendants, the investigation team of the defendant Bank investigated and found all the said five transactions including the cards used on 4th July 2004 (as found in Ex.P4) were fraudulent transactions. Inspite of the said fraudulent transactions, they have not taken any legal action against the card holders or the persons who made used the said cards. This conduct of the defendants clearly held that, it is negligence on the part of the banker. The defendants being the Bank 37 OS No.26401/2007 and after coming to know that EDC machine issued by them, was a fraudulent cards, they ought to have taken proper legal steps by initiating complaint before the competent authority. Why no such legal action is taken by the defendants and why the amount was not released to plaintiff? In the absence of such conduct by the defendants, it can be held that, the defendants have not acted in accordance with law, which is required to be done by a banker. Therefore the plaintiff is entitled for compensation for the said negligence on the part of the defendant, apart from the release of said amount.
32. It is rightly argued by the learned counsel for the plaintiff that, there is no mandate in Ex.D3 to taken identify proof documents while using the credit/debit cards in EDC machine. In this regard, the learned counsel for the defendant nothing submitted, excep the cross examination of PW1. On perusal of Ex.D3, there is nothing 38 OS No.26401/2007 mentioned/stated as to receiving of identify proof, while transacting through the EDC machine. Hence such a contention of the defendants is not tenable. Accordingly, Issue No.1 is answered in the Affirmative.
33. Issue No.2:- It is held in the Issue No.1 that, the defendants are liable to pay a sum of Rs.1,86,760.40ps as on 04.08.2004. The plaintiff was deprived of his money from 04.08.2004 without his fault. The defective service of the defendants made the plaintiff to wonder to courts from 2004 to 2024 without any valid reason. He has spent money, time and energy on the litigation for 20 years. The plaintiff was deprived of this amount for which he was legally entitled. Hence, the defendants are entitled to pay interest at the rate of 10% from 04.08.2004 till the date of actual payment of entire amount. Accordingly, Issue No.2 is answered in the Affirmative.
39 OS No.26401/2007
34. Issue No.4:-
It is contended by the defendants that, suit of the plaintiff is barred by limitation. The plaintiff ought to have filed this suit on 03.08.2007. But he has filed this suit on 04.08.2007. The law of limitation requires, the suit for recovery of money ought to have filed within three years from the date of default. In this case, the transactions held on 04.08.2004, the defendants refused to release the amount on 05.08.2007. Hence the grievance or cause of action arose on 05.08.2007. Hence, it is held that, suit is filed within the period of limitation. Accordingly, Issue No.4 is answered in the Affirmative.
35. Issue No.5:-
It is contended by the defendants that, the suit is barred by nonjoinder of necessary parties. According to defendants, A Yousuff and A Ahamad are required to be made as parties to the suit. But as already stated above, 40 OS No.26401/2007 the sale transactions within these persons made by using credit cards and the said amount is already remitted to the defendants bank, towards these transactions. Under such circumstances, there is nothing to be received from these customers. Hence, this presence is not required for just and complete adjudication of the matter. They are neither the necessary parties nor the proper parties to the suit. Hence, Issue No.5 is answered in the Negative.
36. Issue No.6:-
It is contended by the defendants that, the plaintiff has colluded with A Yousuff and A Ahamad and fabricated the transaction with an intention to make wrongful gain. In this case, the defendants have conducted the investigation and according to the defendants, the Ex.D3 is the investigation report. But in this document, it is not reported that the plaintiff by colluding with A Yousuff and A Ahamad and fabricated these transactions. Therefore 41 OS No.26401/2007 based on Ex.D3, the investigation report, it cannot be believed that the plaintiff has colluded with said persons and fabricated the transactions. Even the defendants have not taken any legal action by lodging police complaint on the basis of investigation report against the fraudulent transactions. Hence the said contentions of the defendants is not tenable. Accordingly, Issue No.6 is answered in the Negative.
37. Issue No.7:-
In this case, the plaintiff has successfully established that, the defendants are liable to pay a sum of Rs.1,86,760.40ps as on 04.08.2004. It is also established by the plaintiff that, defendants are liable to pay the interest on the said amount from 05.08.2004. At the same time, the defendants have failed to establish that, the plaintiff by colluding with one A Yousuff and A Ahamad fabricated the transactions with an intention to make the wrongful gain. 42 OS No.26401/2007 Hence, plaintiff is entitled for suit claim to the extent of Rs.1,86,760.40 ps from 05.08.2004 with interest from 12% interest, till the date of actual payment. But the plaintiff has claimed Rs.2,50,000/- from the defendants bank and restricted his claim for Rs.2,50,000/- along with interest. But the transactions of this case is purely commercial in nature and the plaintiff is entitled for the amount for which he is due i.e., an amount of Rs.1,86,760.40ps along with 12% of interest. The defendant No.1 being the banker is liable to pay his amount, along with litigation expenses and the compensation. The defendant Nos.2 and 3 are being the service provider are also jointly and severally liable to the said amount. Accordingly, Issue No.7 is answered Partly in the Affirmative.
38. Issue No.8:- In view of the reasoning given above, I proceed to pass the following:-
43 OS No.26401/2007
O R D E R The suit of the plaintiff is decreed, in part, with cost.
The defendants are directed to pay a sum of Rs.1,86,760.40ps along with the interest at the rate of 12% from 05.08.2004, till the date of actual payment.
Apart from that, acting U/Or.XX Rules 1 and 2 of CPC, the defendants are directed to pay Rs.50,000/- towards the litigation expenses and Rs.50,000/- towards other expenses.
Draw decree accordingly.
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(Dictated to the Stenographer directly on the computer, typed and then corrected and pronounced by me on this the 10th day of December 2024) (Sujata.M.Sambrani) XXVI Addl. City Civil Judge, Mayo Hall, Bangaluru.44 OS No.26401/2007
A N N E X U R E
1. List of witnesses examined for the plaintiff/s:
P.W.1 Sri.Ramesh.B.Jain
2. List of witnesses examined for defendant/s:
D.W.1 Sri.Satish Kumar.S. D.W.2 Jayakrishnan
List of documents exhibited for the plaintiff/s:
Ex.P.1 Letter dtd. 18.06.2004 of HDFC
Ex.P.2 Letter dtd. 18.06.2004 of HDFC
Ex.P.3 Merchant Payment Receipt dtd.
05.08.2004
Ex.P.4 Merchant Payment Receipt dtd.
6.07.2004
Exs.P.5 to 7 Batch complete settlement
accepted documents.
Exs.P.8 to 20 Statement of Accounts
Ex.P.21 Original Charge Back receipt
Ex.P.22 Copy of the Representation dtd.
14.08.2014 of the Plaintiff
Ex.P.23 Copy of the Legal notice dtd.
11.09.2004
45 OS No.26401/2007
Ex.P.24 Reply notice of the Defendant.
Ex.P.25 Another Legal notice dtd
02.10.2004
Ex.P.26 Reply notice of the Defendant.
Ex.P.27 Newspaper cutting dtd.
17.08.2007
Exs.P.28 to 37 5 Invoices and 5 chart slips.
4. List of documents exhibited for defendant/s:
Ex.D.1 Copy of the Power of Attorney
Ex.D.2 Report of the Manager dtd.
31.10.2007
Ex.D.3 Merchant Establishment Agreement
(Sujata.M.Sambrani)
XXVI Addl. City Civil Judge, Mayo Hall,
Bangaluru.