Delhi District Court
M/S Shree Ganpati Traders vs Idbi Bank on 23 May, 2014
IN THE COURT OF SHRI RAJ KUMAR: ADDL. DISTRICT
JUDGE17 (CENTRAL) : TIS HAZARI COURTS : DELHI
Suit No. 267/14 (Old Suit no. 179/05)
Unique Case ID No. 02401C0749082005
M/s Shree Ganpati Traders,
2257/5, Gali Raghunandan,
Naya Bazar, Delhi
Through its proprietor
Sh. Ramanand Jain S/o Sh. O.P. Jain. ........... Plaintiff.
VERSUS
1. IDBI Bank,
Through its Principal Officer / Branch Manager,
Aggarwal Chambers, Local Shopping Centre,
CD Block, Pitampura, Delhi110034.
2. Sh. Chander Tayal,
S/o Sh. Vinod Tayal,
R/o A281, Ground Floor,
Prashant Vihar, Delhi ........ Defendants.
Date of institution of the suit : 24.08.2005
Date on which order was reserved : 05.05.2014
Date of decision : 23.05.2014
SUIT FOR RECOVERY OF Rs. 7,01,083/
JUDGMENT
Suit No. 267/14 (Old Suit no. 179/05) Page No. 1/31
The facts in brief, necessary for the disposal of the present suit for recovery filed by the plaintiff are that the plaintiff is a proprietorship firm dealing in the business of foodgrains and pulses and Sh. Raghunath Jain is the proprietor of the plaintiff firm. It has been further stated that the defendant no. 1 is a limited bank and the defendant no. 2 is the person, who had opened a fake account in the name of the plaintiff firm with the defendant no. 1 by presenting and attaching forged and fabricated documents in connivance with the officials of the defendant no. 1. It has been further stated that M/s Pawan Kumar Mukesh Kumar having its office at Kolkatta, West Bengal had sent a cheque bearing no. 000073 dated 14.09.2004 drawn on HSBC in favour of the plaintiff firm for an amount of Rs. 5,06,420/ in discharge of its financial liability. It has been further stated that M/s S.P. Rai & Company also sent two drafts bearing nos. 979923 and 979924, both dated 14.09.2004 for an amount of Rs. 48,000/ and Rs. 47,663/ respectively in the name of the plaintiff firm issued by the State Bank of India in discharge of its financial liability towards the plaintiff firm. It has been further stated that the said cheque and the demand drafts were sent through courier known as Vayu Courier. It has been further stated that the said cheque and the demand drafts were stolen from the custody of Vayu Courier service during transit at Delhi and the matter was reported to the police vide DD no. 55B on 16.09.2004 at PS Lahori Gate by the Courier Company. It has Suit No. 267/14 (Old Suit no. 179/05) Page No. 2/31 been further stated that subsequently, an FIR bearing no. 322/04 U/s 379/411/420/468/471/120B IPC was registered at PS Lahori Gate. It has been further stated that during the investigation by the police, it was found that the said cheque and the demand drafts were presented by the defendant no. 2 after opening an account no. 037102000011219 on 17.09.2004 in the name of the plaintiff firm by attaching forged and fabricated documents with the defendant no. 1. It has been further stated that the defendant no. 2 was introduced by one Sh. Ashish Goel, employee of the bank as is clear from the Account Opening Check List. It has been further stated that the defendant no. 2 after opening the fake and forged bank account with the defendant no. 1 withdrew Rs. 3.5 Lacs on 21.09.2004 and Rs. 2.5 Lacs on 24.02.2004 in cash from the defendant no. 1 after presenting self cheque no. 031652 and 031654 showing therein himself as Proprietor of the plaintiff firm. It has been further stated that the defendant no. 1 presented the cheque and the demand drafts for collection to the bank concerned. It has been further stated that the said cheque and the demand drafts were duly honoured by the concerned bank under the bonafide belief that the said cheque and the demand drafts were bonafide. It has been further stated that as per the practice, the settled procedure and the guidelines issued by the Reserve Bank of India, a bank has to take introduction of an existing account holder before opening the bank account and has also to verify the documents annexed Suit No. 267/14 (Old Suit no. 179/05) Page No. 3/31 by the prospective customers before opening the bank account. It has been alleged by the plaintiff that it is prima facie proved from the record that the bank account was opened by the defendant no. 2 fraudulently in collusion with the bank officials of the defendant no. 1 bank. It has been alleged that the plaintiff firm has been fraudulently deprived of Rs. 6,03,083/. It has been alleged that in the present case, the defendant no. 1 bank has not only violated the guidelines, the rules and regulations of the RBI, but the defendant no. 1 bank has also acted most negligently. It has been alleged that the defendant no. 1 bank in collusion with the defendant no. 2 has played a fraud upon the plaintiff resulting in financial loss to the tune of Rs. 6,03,083/ to the plaintiff firm. It has been further alleged that the documents presented by the defendant no. 2 to the defendant no. 1 bank at the time of the opening of the bank account were not got verified by the defendant no. 1 bank. It has been further stated that the defendants are jointly and severally liable to compensate and pay to the plaintiff for the loss caused to the plaintiff. It has been further stated that the defendant no. 2 is one of the accused in the FIR lodged with PS Lahori Gate. It has been further stated that the defendant no. 1 bank has been called upon several times to pay the amount of Rs. 6,03,083/. It has been further stated that a complaint was filed before the Banking Ombudsman, Jeewan Bharti Building. It has been further stated that the defendants are liable to pay the principal amount of Rs. Suit No. 267/14 (Old Suit no. 179/05) Page No. 4/31 6,03,083/ together with the interest @ 24% per annum, which is the usual rate of interest charged by any nationalized bank. It has been further stated that the total amount due from the defendants to the plaintiff firm is Rs. 6,03,083/ + Rs. 98,000/ as the interest, thus, totaling to Rs. 7,01,083/. It has been further stated that despite the legal notice dated 30.11.2004, which was duly served upon the defendant no. 1, the defendants failed to pay the said amount. It has been further stated that rather, the defendant no. 1 sent a reply dated 22.12.2004, which was baseless and frivolous. It has been further stated that the said amount still remains to be paid and hence, the present suit.
2. On the basis of the above said allegations as contained in the plaint, the plaintiff has prayed for a decree for an amount of Rs. 7,01,083/ together with the pendente lite and future interest @ 24% per annum. The plaintiff has also prayed for the costs of the suit.
3. The defendant no. 1 bank has filed on record the written statement stating therein that the present suit is without any cause of action and the same is not maintainable against the defendant no.1. It has been further stated that the suit is bad for nonjoinder of the necessary and proper parties. It has been further stated that M/s Vayu Courier Service has not been added as a party in the present suit and the plaintiff has also not added the paying banker as a party. It has been further stated that the defendant no. 1 bank has acted merely as a collecting banker and Suit No. 267/14 (Old Suit no. 179/05) Page No. 5/31 the proceeds of the cheque have only been collected after the same were cleared and paid by the paying banker. It has been further stated that there is no liability of the defendant no. 1 bank because the defendant no. 1 bank has acted in good faith and without negligence. It has been further stated that the defendant no. 1 bank has acted merely as a collecting banker, who has collected the proceeds of the cheque in question for its customer namely Sh. Chander Tayal, Proprietor of one M/s Ganapati Traders. It has been further stated that the answering defendant having collected the money in good faith and without negligence cannot be held liable in view of the provisions of Section 131 of the Negotiable Instruments Act and as such, the suit of the plaintiff is liable to be dismissed. It has been further stated that there is no privity of contract in between the plaintiff and the answering defendant and as such, the present suit is liable to be dismissed.
4. On merits, the defendant no. 1 bank has reiterated and reaffirmed the stand as taken by it in the preliminary objections. The defendant no. 1 bank has denied that Sh. Raghunath Jain is the proprietor of the plaintiff firm. The defendant no.1 bank has admitted that it is a limited bank and one of its branches is functioning at Pitampura, New Delhi. The defendant no. 1 bank has denied that any fake or forged account was opened by the defendant no. 2 in the name of the plaintiff. The defendant no. 1 has taken the stand that the defendant no. 2 had Suit No. 267/14 (Old Suit no. 179/05) Page No. 6/31 approached the defendant no. 1 bank for opening a bank account and the defendant no. 1 bank had asked for the required documents. It has been further stated that the defendant no. 2 produced the original Permanent Account Number card for identity and signatures, a certificate from the Chartered Accountant certifying the business of Proprietorship concern of the defendant no. 2 and a rent agreement to indicate the residential proof. It has been further stated that after submission of the said documents by the defendant no. 2, an account was opened in the name of M/s Shree Ganpati Traders. It has been further stated that the said account was opened after following the due procedure as laid down by the Reserve Bank India from time to time. It has been further stated that the proper verification was also done by the defendant no. 1 bank at the time of opening of the said account. The defendant no. 1 bank has denied that the said account was opened in connivance and collusion with the officials of the defendant no. 1 bank by the defendant no.2. It has been further stated that at the time of the opening of the said account, Mr. Tayal deposited Rs. 5,000/ in cash and also deposited two demand drafts for an amount of Rs. 48,000/ and Rs. 47,663/ respectively, both drawn on State Bank of India. It has been further stated that the said account was opened on 17.09.2004 and the said amount of Rs. 5,000/ along with the said two demand drafts were deposited on 17.09.2004. It has been further stated that after depositing the said two demand drafts, Mr. Tayal Suit No. 267/14 (Old Suit no. 179/05) Page No. 7/31 again deposited a cheque for an amount of Rs. 5,06,420/ in his account, which was deposited by him in the drop box of the bank. It has been further stated that the amount of the said two demand drafts was collected by the defendant no. 1 bank and necessary credit was given in the account of Mr. Chander Tayal on 20.09.2004. It has been further stated that the amount of the cheque was also collected by the bank and due credit was given on 20.09.2004. It has been further stated that the amount of Rs. 3.5 Lacs in cash was withdrawn by Mr. Tayal on 21.09.2004 from the Pitampura Branch of the defendant no. 1 bank and thereafter, an amount of Rs. 2.5 Lacs was again withdrawn by Mr. Tayal on 24.09.2004 by cheque drawn under "Self" from the Nehru Place Branch of the defendant no. 1 bank. The defendant no.1 bank has denied that the cheque bearing no. 000073 dated 14.09.2003 drawn on HSBC Bank was issued in favour of the plaintiff. It has been further stated that the said cheque was presented by the defendant no. 2 in his account for collection, which has since been collected. It has been further stated that the drawer of the said cheque has till date never approached the defendant no. 1 or his bankers in respect of the said cheque. It has been further stated that the drafts as stated herein above were also got collected by the defendant no. 1 bank for its customer namely defendant no. 2 in good faith and without negligence. The defendant no. 1 bank has denied for want of knowledge that the cheque and the demand drafts were sent Suit No. 267/14 (Old Suit no. 179/05) Page No. 8/31 through M/s Vayu Courier Service. The defendant no. 1 has admitted the lodging of the complaint and the subsequent FIR no. 322/2004 with PS Lahori Gate. The defendant no. 1 bank has denied that Mr. Tayal was introduced by the employee of the bank namely Mr. Ashish Goel. It has been further stated that the money deposited by the defendant no. 2 in his account was withdrawn by the defendant no. 2 by cheque, which is permissible in law. It has been further stated that the money was not withdrawn from the account of the plaintiff. The defendant no. 1 has not denied the guidelines issued by the Reserve Bank India, but the defendant no. 1 bank has stated that anyone holding an account with the bank can introduce an account. It has been further stated that it is not mandatory to take the introduction while opening the account. The defendant no. 1 bank has denied any collusion of its officials with the defendant no.2. The defendant no.1 bank has denied that it has acted in defiance of the guidelines issued by the Reserve Bank India. The defendant no. 1 bank has denied its liability to pay any amount to the plaintiff. Rest of the contents of the plaint have been denied and it has been prayed that the suit of the plaintiff be dismissed with costs.
5. Vide orders dated 01.05.2007, defendant no. 2 was proceeded exparte by the Ld. Predecessor of this Court. No written statement has been filed on record by the defendant no. 2.
6. Vide orders dated 22.05.2007, out of the pleadings of the Suit No. 267/14 (Old Suit no. 179/05) Page No. 9/31 parties, the following issues were framed by the Ld. Predecessor of this Court :
1) Whether the suit is bad for nonjoinder of the necessary parties?OPD.
2) Whether the defendant no. 1 as an collecting banker was negligent in collecting the amount of the cheque in the present case? If so, its effect?OPD.
3) Whether the plaintiff is entitled to recover the
amount as claimed? If so, from which of the
defendants?OPP.
4) Whether the plaintiff is entitled to recover any
amount on account of interest? If so, at what rate, for what amount and to which period?OPP.
5) Relief. EVIDENCE :
7. The plaintiff has examined its sole proprietor Sh. Ramanand Jain as PW1 and in his evidence by way of affidavit, he has reiterated and reaffirmed the stand as taken by the plaintiff in the plaint. He has filed on record his evidence by way of affidavit Ex. PW1/A, the copy of the Account Opening Form of the defendant no. 2 as Ex. PW1/1, copy of the legal notice dated 30.11.2004 as Ex. PW1/2 and the reply dated Suit No. 267/14 (Old Suit no. 179/05) Page No. 10/31 22.12.2004 as Ex. PW1/3.
8. In the crossexamination, PW1 states that he is the proprietor of the plaintiff firm. PW1 admits it to be correct that in para no. 1 of the plaint, it has been mentioned that Sh. Raghunath Jain is the proprietor of the company. By way of volunteer, PW1 states that it may be case of misprinting. PW1 denies the suggestion that he is not the proprietor of Shree Ganpathi Traders. PW1 further states that he knows the banking procedure. PW1 denies the suggestion that anybody can open an account in the name of Ganpathi Traders. PW1 denies the suggestion that the cheque and the demand drafts, which have been mentioned in para no. 3 of the plaint were not sent for the plaintiff. PW1 further states that he cannot say whether the said cheques were sent through Vayu Courier or through any other courier. By way of volunteer, PW1 states that normally, he used to receive Dak through Vayu Courier. PW1 further states that he has stated the averments as mentioned in para no. 8 of his affidavit on the basis of the information given to him by Sh. Pawan Kumar and Sh. Mukesh Kumar and also by Vayu Sewa Courier. PW1 further states that the fact regarding the theft was told by Vayu Sewa Courier. By way of volunteer, PW1 states that Vayu Sewa Courier had lodged a complaint on 16.09.2004 and he lodged a complaint in this regard on 17.09.2004. PW1 further states that Vayu Sewa Courier informed him about the theft of two parcels belonging to him on Suit No. 267/14 (Old Suit no. 179/05) Page No. 11/31 16.09.2004. PW1 denies the suggestion that the said cheques were never sent through Vayu Sewa Courier. PW1 further states that he had asked Pawan Kumar Mukesh Kumar and S.P. Rai & company to get the payment of the cheques/ drafts on 22 or 23.09.2004, but by that time, the cheques had already been encashed by some unscrupulous person. PW1 further states that he came to know that Sh. Chander Tayal had opened an account with the defendant no. 1 bank in the name of Shree Ganpathi Traders on 25 or 26.09.2004. PW1 further states that I had not asked the defendant no. 1 bank not to release the payment to Sh. Chander Tayal as by that time, the said cheques had already been encashed. PW1 further states that he cannot say whether the defendant no. 1 bank had opened the account of the defendant no. 2 in the name of Shree Ganpathi Traders after fulfilling the Reserve Bank India guidelines or not. PW1 further states that he cannot say whether defendant no. 1 acted negligently in this regard or not. By way of volunteer, PW1 states that he can only say that it was a fraud. PW1 further states that there was no occasion for Pawan Kumar Mukesh Kumar and S.P. Rai & Company to raise any dispute as they had already made the payment by sending the cheques. PW1 denies the suggestion that he never had any dealing with Pawan Kumar Mukesh Kumar or with S.P. Rai & Company. PW1 denies the suggestion that the plaintiff was not the rightful owner of the drafts in question.
9. The plaintiff has further examined Sh. Rakesh Goel, Suit No. 267/14 (Old Suit no. 179/05) Page No. 12/31 Proprietor of M/s Vayu Sewa Courier Service as PW2 and this witness in his evidence by way of affidavit, has reiterated and reaffirmed the stand as taken by the plaintiff in the plaint. PW2, in his affidavit has stated that he knows the plaintiff firm since long time back as he has been delivering couriers/ packages in his general course of business. PW2 further states that on 16.09.2004 at about 10:55 am, his employee had informed him about the theft of parcels. PW2 further states that this incident was reported to the police and an FIR no. 322/2004 was got registered with PS Lahori Gate on 24.09.2004. PW2 further states that on inquiry from the branch situated at Calcutta, he came to know that cheque bearing no. 000073 dated 14.09.2004 drawn on HSBC in favour of M/s Ganpathi Traders was posted by one M/s Pawan Kumar Mukesh Kumar and two drafts bearing nos. 979923 and 979924, both dated 14.09.2004 for an amount of Rs. 48,000/ and Rs. 47663/ drawn on State Bank India were posted by one M/s S.P. Rai & Company in favour of M/s Ganpathi Traders. He has filed on record his evidence by way of affidavit as Ex. PW2/A, the copy of the FIR as Ex. PW2/1.
10. In the crossexamination, PW2 states that Sh. Santosh Kumar was the employee, who was carrying the parcels. PW2 further states that Sh. Santosh Kumar is not working with Vayu Courier Service as on the date of his deposition before the Court. PW2 further states that at Calcutta, the office is of Sh. Shyam Air Services. PW2 further states Suit No. 267/14 (Old Suit no. 179/05) Page No. 13/31 that the couriers sent from Calcutta through Sh. Shyam Air Services were received through Vayu Sewa Courier at the Delhi office. PW2 admits it to be correct that the contents of the parcels are not known to the courier service. By way of volunteer, PW2 states that the contents of the parcels are not known to the courier service unless they are insured. PW2 further states that he came to know about the fact that the parcels contained cheque at the police station where talks in this regard were going on. PW2 further states that he came to know of the said fact after 24.09.2004. PW2 denies the suggestion that the cheques / drawers in question were never received by Vayu Sewa Courier.
11. The defendant no. 1 bank has examined its Relationship Manager and Constituted Attorney Sh. Akshay Agnihotri as DW1 and this witness, in his evidence by way of affidavit, has reiterated and reaffirmed the stand as taken by the defendant no. 1 bank in the written statement. He has filed on record his evidence by way of affidavit as Ex. DW1/A, copy of the seizure memo dated 27.09.2004 in FIR no. 322/2004 as Ex. DW1/1 and the copy of the seizure memo dated 08.10.2004 in the said FIR as Ex. DW1/2.
12. In the crossexamination, DW1 states that he was working in the Vaishali Branch in the year 2005. DW1 further states that at present, he is posted at Sri Fort (Khelgaon), branch of the defendant. DW1 admits it to be correct that he was not posted in Vaishali Branch at the time, Suit No. 267/14 (Old Suit no. 179/05) Page No. 14/31 when the defendant no. 2 opened his account. DW1 admits it to be correct that he has deposed in his affidavit on the basis of the record/ information provided by Vaishali Branch and he has no personal knowledge. DW1 further states that he is not aware, who filed affidavit on behalf of the defendant alongwith the written statement. DW1 admits it to be correct that there is no circular issued by Reserve Bank India showing that it is not mandatory for a person at the time of opening an account to have an introducer. By way of volunteer, DW1 states that in case, where KYC norms are complete, no introducer is necessary. DW1 further states that he has no knowledge of any circular issued by the Reserve Bank India, as per which, it is mandatory for everyone to open an account only with an introducer having account in the same branch. DW1 again states that there is no such circular from Reserve Bank India. DW1 further states that in the normal practice, the bank does not require introducer in every case of opening a new account. DW1 further states that without seeing the records, he cannot say as to how many transactions were done in the account in dispute. DW1 further states that he has not brought the statement of account. DW1 further states that he can bring the statement of account, if directed by the Court. DW1 admits it to be correct that as per statement of account, a sum of Rs. 5,06,420/ was deposited in that account on 17.09.2004 and a sum of Rs. 3.5 Lacs was withdrawn on 21.09.2004 and RS. 2.5 Lacs were withdrawn on Suit No. 267/14 (Old Suit no. 179/05) Page No. 15/31 24.09.2004. DW1 admits it to be correct that apart from the aforestated transaction, there was no other transaction in the said account. DW1 admits it to be correct that more than minimum amount was deposited in cash alongwith two demand drafts in the said account at the time of opening of the said account. DW1 admits it to be correct that in the account opening form, Rs. 10,000/ have been mentioned and after cutting the said entry, an amount of Rs. 1,00,663/ has been mentioned. DW1 further states that he does not know in whose hand writing, the said form has been completed. DW1 further states that the form is signed by Mr. Ashwani Mehra, the then Branch Manager and also by Ms. Deepali Jain, the then Service Operation Manager. DW1 admits it to be correct that Sh. Ashish Goel (Team Leader) is shown as a witness in the nomination form. DW1 further states that an inquiry was conducted by Sh. Ashish Goel, the Team Leader about the nature of the work, which the account holder was doing. By way of volunteer, DW1 states that the said Sh. Ashish Goel had personally visited the premises of the account holder at Prashant Vihar. DW1 admits it to be correct that this fact has not been mentioned anywhere in the account opening form. DW1 further states that he had discussions with Sh. Ashish Goel about this case 34 years back. DW1 admits it to be correct that a criminal case is pending against defendant no. 2. DW1 further states that he does not know whether any officer or official of the bank has been cited as a witness in Suit No. 267/14 (Old Suit no. 179/05) Page No. 16/31 the said case. DW1 further states that he has no knowledge as to whether any document of the bank was seized by the police in that case. DW1 denies the suggestion that a false account was opened in connivance with the officials of the bank or that a substantial amount was withdrawn by the defendant no. 2 within a short span of time. DW1 denies the suggestion that the officials of the bank did not personally enquire about the contents/ genuineness of the documents furnished by the defendant no. 2 at the time of the opening of the account. DW1 denies the suggestion that there was dereliction, negligence and criminal conspiracy on the part of the bank with the defendant no. 2 resulting into huge financial loss to the plaintiff. DW1 further states that he has no special authority letter from the defendant no. 1 bank to depose in this case. By way of volunteer, DW1 states that he had received a written mail in this regard. DW1 further states that copy of the said mail has not been filed on record.
13. I have carefully gone through the entire material available on record and heard the rival submissions of Ld. counsels for both the parties. Ld. Counsel for the plaintiff has filed on record the written final arguments as well. I have also carefully gone through the written final arguments filed on record by the Ld. Counsel for the plaintiff.
14. My issuewise finding on the abovesaid issues is as under:
Issues No. 1 :
15. The onus to prove this issue has been placed upon the Suit No. 267/14 (Old Suit no. 179/05) Page No. 17/31 defendants. The defendant no. 1 has taken an objection in the written statement that M/s Vayu Courier Service is a necessary party and the paying banker is also a necessary party.
16. Certain facts are not in dispute. It is not in dispute that the defendant no. 2 opened a bank account bearing no. 037102000011219 with the defendant no. 1 bank on 17.09.2004 acting as the proprietor of Shree Ganpathi Traders. It is not in dispute that the defendant no. 2 deposited two demand drafts bearing nos. 979923 and 979924, both dated 14.09.2004 for an amount of Rs. 48,000/ and Rs. 47,663/ and a cheque bearing no. 000073 dated 14.09.2004 drawn on HSBC for an amount of Rs. 5,06,420/ in the said account. It is not in dispute that the defendant no. 2 withdrew an amount of Rs. 3.5 Lacs from the said account on 21.09.2004 and an amount of Rs. 2.5 Lacs on 24.09.2004 from the said account. It is not in dispute that an FIR bearing no. 322/04 U/s 379/411/420/468/471/120B IPC with PS Lahori Gate against the defendant no. 2 and others with regard to the theft of the said cheque and two demand drafts. The plaintiff has alleged that the said cheque and the two demand drafts were stolen during transit from the custody of M/s Vayu Sewa Courier and the defendant no.1 bank has been negligent. The defendant no. 1 bank has denied any negligence on its part.
17. In the light of the abovesaid factual position, I am of the opinion that the defendant no. 1 bank has utterly failed to show as to how Suit No. 267/14 (Old Suit no. 179/05) Page No. 18/31 the present suit is bad for nonjoinder of either the paying banker or the Vayu Sewa Courier. I am of the opinion that the defendant no. 1 has failed to prove this issue and accordingly, issue no. 1 is decided against the defendants and in favour of the plaintiff.
Issues no. 2, 3 & 4 :
18. All these issues are taken up together as the same are connected interse and overlap each other. Issue no. 2 pertains to the stand of the defendant no. 1 as contained in the written statement of the defendant no. 1, whereas issues no. 3 and 4 relate to the prayer clause of the present suit. The onus to prove issue no. 2 has been placed upon the defendant no. 1, whereas the onus to prove the issues no. 3 and 4 has been placed upon the plaintiff.
19. The factual controversy, which is within a narrow compass in the present suit and the evidence led by the parties has already been narrated herein above.
20. The crux of the controversy involved in the present suit is as to whether the defendant no. 1 bank has been negligent in collecting the proceeds of the cheque and the two demand drafts for the defendant no.
2. This Court has to consider as to whether the plaintiff has been able to prove the negligence on the part of the defendant no.1 bank in opening the account of the defendant no. 2 and in collecting the proceeds of the Suit No. 267/14 (Old Suit no. 179/05) Page No. 19/31 abovesaid Negotiable Instruments. This Court has to further consider as to whether the defendant no. 1 bank has been able to prove that it has acted in good faith and it has not been negligent in opening the account of the defendant no. 2, in collecting the proceeds of the said Negotiable Instruments and in further disbursing the same to the defendant no. 2.
21. Ld. Counsel for the plaintiff has relied upon an authority cited as 2004(2) CC Cases (SC) 233 titled as Kerala State Co operative Marketing Federation Vs. State Bank of India and Ors., wherein, the Hon'ble Supreme Court of India has held as under :
"Negotiable Instruments Act, 1881, Section 131 - Failure to discharge burden - Transaction of opening of account, depositing exact amount for being entitled to receive a cheque book, depositing of cheque of Rs. One Lakh and withdrawal of sum of Rs. 50,000/ were all part of same transaction - Bank made no enquiry regarding nature and place of business of person opening account - No enquiry made by Bank with introducer when it was found out that a cheque had been forged and a stop payment notice issued - No attempt made by Bank to lead evidence of person who had introduced account holder - Held : Bank not discharged burden which lay upon it to show that it had acted in good faith and without negligence Suit No. 267/14 (Old Suit no. 179/05) Page No. 20/31
- Appeal allowed."
22. The Hon'ble Supreme Court of India in the said authority has cited certain principles governing the liability of a collecting banker in the following manner :
1) As a general rule the collecting banker shall be exposed to his usual liability under common law for conversion or for money held and received, as against the 'true owner' of a cheque or a draft, in the event the customer from whom he collects the cheque or draft has not title or a defective title.
2) The banker, however, may claim protection from such normal liability provided he fulfils strictly the conditions laid down in Section 131 A of the Act and one of those conditions is that he must have received the payment in good faith and without negligence.
3) It is the banker seeking protection who has on his shoulders the onus of proving that he acted in good faith and without negligence.
4) The standard of care to be exercised by the collecting banker to escape the charge of negligence depends upon the general practice of bankers which may go on changing from Suit No. 267/14 (Old Suit no. 179/05) Page No. 21/31 time to time with the enormous spread of banking activities and cases decided a few decades ago may not probably offer an unfailing guidance in determining the question about negligence today.
5) Negligence is a question of a fact and what is relevant in determining the liability of a collecting banker is not his negligence in opening the account of the customer but negligence in the collection of the relevant cheque unless, of course, the opening of the account and depositing of the cheque in question therein from part and parcel of one scheme as where the account is opened with the cheque in question or deposited therein so soon after the opening of the account as to lead to an inference that the depositing the cheque and opening the account are interconnected moves in a integrated plan.
6) Negligence in opening the account such as failure to fulfill the procedure for opening an account which is prescribed by the bank itself or opening as account of an unknown person or nonexisting person or with dubious introduction may lead to a cogent, though not conclusive, proof of negligence particularly if the cheque in question has been deposited in the account soon after the opening Suit No. 267/14 (Old Suit no. 179/05) Page No. 22/31 thereof.
7) The standard of care expected from a banker in collecting the cheque does not required him to subject the cheque to a minute and microscopic examination but disregarding the circumstances about the cheque which on the face of it give rise to a suspicion may amount to negligence on the part of the collecting banker.
8) The question of good faith and negligence is ot be judged from the stand point of the true owner towards whom the banker owes no contractual duty but the statutory duty which is created by this section and it is a price which the banker pays for seeking protection, under the statutre, from the otherwise larger liability he would be exposed to under common law.
9) Allegation of contributory negligence against the paying banker clause provide no defence for a collecting banker who has not collected the amount in good faith and without negligence."
23. The defendant no. 1 bank has taken the defence of Section 131 of the Negotiable Instruments Act. It has to be seen that in a catena of cases, it has been held that the onus of proving "good faith" and "absence Suit No. 267/14 (Old Suit no. 179/05) Page No. 23/31 of negligence" is on the banker claiming protection U/s 131 of the Negotiable Instruments Act. It has been further held that in deciding whether a collecting banker has or has not been negligent, it becomes necessary to take into consideration many factors such as the customer, account and the surrounding circumstances. It has been further held that if the cheque is of a larger amount, then the bank has to be more careful unless the customer is of long standing, good repute and with great personal credit and was one, who regularly deposited and withdrew cheques of large amount. It has been further held that before opening an account for a customer, who is not already known to him, a banker should make proper preliminary enquiries. In particular, he should obtain references from responsible persons with regard to the identity, integrity and reliability of the proposed customers. It has been further held in a number of cases that if a banker does not act prudently and in accordance with current banking practice, when obtaining references concerning a proposed customer, he may later have cause for regret.
24. In the light of the abovesaid guiding factors as laid down in various judgments, this Court has to examine the question of the alleged negligence on the part of the defendant no. 1 bank.
25. During the course of arguments, Ld. Counsel for the defendant no. 1 bank has argued that the plaintiff has failed to prove that the plaintiff was the true owner of the two demand drafts and the cheque Suit No. 267/14 (Old Suit no. 179/05) Page No. 24/31 in question. It has been further argued that neither Pawan Kumar Mukesh Kumar, nor S.P. Rai & Company has been examined by the plaintiff to prove that the abovesaid two demand drafts and the cheque were issued by them. It has been further argued that Shyam Air Services has not stepped into the witness box to corroborate the testimony of PW1.
26. Sh. Ramanand Jain has examined himself as PW1 and in his evidence by way of affidavit, he has categorically stated that the two demand drafts were issued by S.P. Rai & Company and the cheque in question was issued by the firm namely M/s Pawan Kumar Mukesh Kumar in the name of the plaintiff firm. During the entire cross examination of PW1, not even a single suggestion has been given to the said witness to the effect that Pawan Kumar Mukesh Kumar and S.P. Rai & Company never issued the said instruments in the name of the plaintiff. It has to be further seen that the plaintiff has further examined Sh. Rakesh Goel, proprietor of M/s Vayu Courier Service, who has testified in his evidence by way of affidavit about the issuance of the said instruments in the name of the plaintiff company. During the entire cross of PW2, not even a single suggestion to the contrary has been given to the PW2. As such, I am of the opinion that the plaintiff has been able to prove that the plaintiff was the true owner of the abovesaid instruments despite the fact that the plaintiff has failed to examine Pawan Kumar Mukesh Kumar, S.P. Rai & Company and Shyam Air Services. Suit No. 267/14 (Old Suit no. 179/05) Page No. 25/31
27. Ld. Counsel for the defendant no. 1 bank has further argued that in the plaint the name of the proprietor of the plaintiff firm has been mentioned as Sh. Raghunath Jain, whereas the plaintiff has examined Sh. Ramanand Jain as the proprietor of the plaintiff firm. In the title of the plaint, it has been categorically disclosed by the plaintiff that Sh. Ramanand is the proprietor of M/s Shree Ganpathi Traders. The affidavit accompanying the plaint is also that of Sh. Ramanand Jain. In his cross examination as well, PW1 has clearly stated that mentioning of the name of Sh. Raghunath Jain as the proprietor of the plaintiff firm in the para no. 1 of the plaint may be a case of misprinting. As such, I am of the opinion that the plaintiff has been able to prove on record that Sh. Ramanand Jain is the proprietor of the plaintiff firm.
28. Ld. Counsel for the defendant no. 1 bank has argued that it has acted in good faith and without any negligence in opening the account of the defendant no. 2 with the defendant no. 1 bank.
29. As stated and discussed herein above by me, it is not in dispute that the defendant no. 2 opened account no. 037102000011219 with the defendant no. 1 bank on 17.09.2004 acting as the proprietor of Shree Ganpathi Traders. It is not in dispute that the defendant no. 2 deposited two demand drafts bearing nos. 979923 and 979924 both dated 14.09.2004 for an amount of Rs. 48,000/ and Rs. 47,663/ and a cheque bearing no. 000073 dated 14.09.2004 drawn on HSBC for an amount of Suit No. 267/14 (Old Suit no. 179/05) Page No. 26/31 Rs. 5,06,420/ in the said account. It is not in dispute that the defendant no. 2 withdrew an amount of Rs. 3.5 Lacs from the said account on 21.09.2004 and an amount of Rs. 2.5 Lacs on 24.09.2004 from the said account. It is not in dispute that an FIR bearing no. 322/04 U/s 379/411/420/468/471/120B IPC with PS Lahori Gate against the defendant no. 2 and others with regard to the theft of the said cheque and two demand drafts.
30. It is crystal clear from the abovesaid admitted facts that the account was opened on 17.09.2004 and the amount was withdrawn on 21.09.2004 and 24.09.2004. If the law as laid down by the Hon'ble Supreme Court of India in the authority cited as 2004(2) CC Cases (SC) 233 and the law as laid down in various other cases discussed herein above is applied, I am of the opinion that it becomes evidently clear that the opening of the account, the depositing of the abovesaid two demand drafts and the cheque, the withdrawal of the amount of Rs. 3.5 Lacs on 21.09.2004 and withdrawal of the amount of Rs. 2.5 Lacs on 24.09.2004 form part and parcel of one scheme. I am of the opinion that it is writ large on the face of the said transaction that the depositing of the cheque and the demand drafts and opening of the account are interconnected moves in one integrated plan.
31. Furthermore, it has to be seen that in the written statement filed on record, the defendant no. 1 bank has categorically denied that the Suit No. 267/14 (Old Suit no. 179/05) Page No. 27/31 defendant no. 2 was introduced by one Sh. Ashish Goel, employee of the defendant no. 1 bank. However, it has to be seen that in the cross examination, DW1, who is the sole witness examined by the defendant no. 1 bank, categorically admits that Sh. Ashish Goel (Team Leader) has been shown as a witness in the nomination form. DW1 has further stated that an inquiry was conducted by Sh. Ashish Goel as a Team Leader about the nature of the work, which the account holder was doing. DW1 has further stated that Sh. Ashish Goel had personally visited the premises of the account holder at Prashant Vihar. DW1 admits it to be correct that the abovesaid facts have not been mentioned in the account opening form. DW1 further states that he had discussions with sh. Ashish Goel about this case 34 years back. It has to be seen that the defendant no. 1 bank has utterly failed to examine the said Sh. Ashish Goel despite the fact that he is an employee of the defendant no.1 bank. Admittedly, the knowledge of the DW1 is not the personal knowledge because as per his own admission in the crossexamination, DW1 was not posted in Vaishali Branch at the time, when the defendant no. 2 opened his account. There is no introducer in the account of the defendant no. 2. As such, I have no hesitation to hold that the defendant no. 1 bank has failed to discharge the onus placed upon it to show that it acted in good faith and without negligence.
32. So far as the defendant no. 2 is concerned, it has already Suit No. 267/14 (Old Suit no. 179/05) Page No. 28/31 come on record that the defendant no. 2 failed to appear before the Court despite service and as such, he was proceeded exparte. The testimony of PWs is uncontroverted and unchallenged so far as the defendant no. 2 is concerned.
33. Ld. Counsel for the defendant no. 1 bank has relied upon an authority cited as 1 (2000) BC 511 titled as Bank of Maharashtra Vs. M/s Balraj Sud & Ors., wherein it has been held that :
"Evidence Act, 1872 - Section 3 - Evidence : Anybody Can Give Evidence on Behalf of Bank In Court, If Acquainted With Facts of Case - Not necessary that such person should necessarily have Power of Attorney or authorization from Bank to give evidence in Court as witness on behalf of Bank - Impugned order set aside."
34. It has to be seen that the testimony of DW1, who is the sole witness examined by the defendant no. 1 bank has already been considered by this Court. As such, I am of the opinion that the ratio of the abovesaid authority stand already applied in the present case.
35. In the light of the abovesaid discussion, I have no hesitation to hold that the defendant no. 1 bank has utterly failed to prove issue no. 2 in its favour. Issue no. 2, thus, is decided against the defendant no. 1 bank and in favour of the plaintiff. I am also of the opinion that the plaintiff firm has been able to prove that the defendants jointly and Suit No. 267/14 (Old Suit no. 179/05) Page No. 29/31 severally are liable to pay an amount of Rs. 6,03,083/ to the plaintiff as the principal amount. The amount of Rs. 98,000/ has been claimed by the plaintiff as interest @ 24% per annum, but no calculation has been given by the plaintiff in para no. 11 of the plaint to the effect as to how the said amount has been calculated. As such, I am of the opinion that the plaintiff is entitled for the principal amount of Rs. 6,03,083/. Issue no. 3 is accordingly, decided in favour of the plaintiff.
36. So far as pendente lite and future interest is concerned, I hereby grant the interest to the plaintiff @ 12% per annum on the aforesaid principal amount of Rs. 6,03,083/ from the date of filing of the present suit till the date of the realization of the suit amount. Issue no. 4, thus, stand decided accordingly in favour of the plaintiff. Relief :
37. In the light of my findings on the foregoing issues, I hereby decree the suit of the plaintiff for an amount of Rs. 6,03,083/ along with pendente lite and future interest @ 12% per annum from the date of the filing of the present suit till the date of realization of the said amount in favour of the plaintiff and against the defendants. Costs of the suit are also awarded in favour of the plaintiff.
Decree sheet be prepared accordingly by the Reader after payment of the additional court fees, if any.
Suit No. 267/14 (Old Suit no. 179/05) Page No. 30/31
File be consigned to Record Room after due compliance.
Announced in the open court (RAJ KUMAR)
on this 23rd day of May 2014. ADJ17 (Central)
Tis Hazari Courts, Delhi.
Suit No. 267/14 (Old Suit no. 179/05) Page No. 31/31