Document Fragment View
Fragment Information
Showing contexts for: stop payment of draft in Sanjay Hiralal Shah vs Hdfc Bank Limited on 4 April, 2008Matching Fragments
9. The plaintiff did not issue any notice nor did he file any Criminal Case against HDFC i.e. defendant No. 7 under Section 138 of the N.I. Act. As it appears from the record the plaintiff for the first time issued notice to HDFC defendant No. 7 and present respondent only on 4.09.2000 for payment on the ground that the bankers" cheques issued by Defendant No. 1 to 6 were in fact Demand Draft and as such HDFC could not have acted upon the illegal instructions of stopping payment issued by the defendants No. 1 to 6. On this premise the plaintiff instituted Special Summery Suit under Order 37 of CPC in the court of Chief Judicial Magistrate (SD) Vadodara against defendant 1 to 6 and present respondent HDFC Bank being defendant No. 7 for recovering an amount of Rs. 7,08,10,040/- The suit was instituted on 13/3/2001. In the Special Summery Suit, being Spl. Suit No. 202 of 2001 under Order 37 of the CPC against defendant No. 1 to 6 as well as defendant No. 7, the Plaintiff has alleged that there existed an agreement between Charotar Nagrik Sahkari Bank Defendant No. 1 and HDFC Defendant No. 7 for issuing Demand Drafts. Therefore HDFC Defendant No. 7 could not have returned the Demand Drafts issued by the Charotar Nagrik Sahkari Bank Defendant No. 1 upon HDFC on the ground of 'stop payment' instructions received from the drawer. The plaintiff on this basis contended that the Banker"s cheques were in fact demand draft only and the HDFC Bank ought to have honoured the same.
28. The advocate for the plaintiff relied upon the decision in support of his submission that under Order 37 Rule 4 the party cannot claim better rights than the rights available to appellant. He also relied upon the decision of Ramkarandas Radhavallabh v. Bhagwandas Dwarka das on the point that while considering the plea for setting aside decree under Order 37 Rule 4 the Court cannot have recourse to the inherent powers under Section 151 of CPC. Rajni Kumar v. Suresh Kumar Merhotra on the point that special circumstances required to be established for setting aside decree under Order 37, Rule 4 are not defined any where in the Code. The defendant not only will have to show existence of special circumstances which prevented him from filing appearance and or obtaining leave to defend but he has also to demonstrate that he has reasonably arguable case in trial. In case of Trilok Singh Thakur v. Madan Singh Nirala wherein the Himachal Pradesh High Court held that when the ex parte decree is passed under Order 37 Rule 2 than the provisions of Order 9 Rule 13 for setting it aside would have no applications, In case of Smt. Maha Devi v. Ravi Kumar the Court held that when in summary suit the defendant instead of filing an application on affidavit for seeking leave to defend filed written statement along with an application for condonation of delay the said written statement cannot be taken on record and any plea of such irregularity happening bonafide not acceptable. In case of Jitendra Gupta v. Ramchandra Sardare on the point that under Order 37 Rule 3 and 6 the defendant has to apply for leave to defend within 10 days from the receipt of summon however the learned judge has power to condon the delay on sufficient cause being made out but in case if no delay condonation application is made there could be no question of condoning delay and the Court have to pass decree in favour of the plaintiff. In case of Salil Dutta v. T.M. & M.C , the apex court held that advocate acts as an agent of the party and his acts ordinarily cannot be disowned. While distinguishing observations and facts in case of Rafiq v. Munshilal the Court observed that in given case the ex parte decree could be set aside on account of negligence or misdemeanor of the advocate of the party but in all the case decree need not be set aside only on account of negligence of advocate. The Courts have to look to the facts and circumstances of the case on hand. In case of State Bank of India v. Jyoti Ranjan Mazumdar wherein the Calcutta High Court held that Draft by a branch of Bank on its Head Office is a bill of exchange. Ordinarily different branches of a bank and their head offices constitutes one legal entity a branch being only an agency of the Head Office but for certain purpose the branch are treated as distinct entities Therefore in a demand draft by a branch of bank on its Head Office drawer and drawee are two different entities drawer being branch and drawee being Head Office and it is bill of exchange. And in case of any uncertainty as to character of instrument due to drawer and drawee being one legal entity holder can insist on treating it as bill of exchange under Section 17, In case of Punjab & Sindh Bank v. Vinkar Sahkari Bank Ltd. and Ors. 2001(6) Supreme 875 in support of the submission that 'Pay Order:' is like a demand draft and thus a cheque within the meaning of Section 138 of Negotiable Instruments Act, In case of Raghavendra Sinh Bhadoria v. State Bank of Indore and Ors. reported in AIR 1992 MP 148 the division bench of MP High Court relying upon the decision of Bombay HC in case of Tukaji Nikam held that once the draft has been delivered to the payee or his agent the purchaser is not entitled to ask the issuing bank to stop payment of the draft to payee on other grounds such as matters relating to consideration, and the issuing bank can thereafter pay back the amount of the draft to the purchaser of the draft only with the consent of the payee., In case of Suganchand & Co. v. Brahmayya & Co. (2) relying upon the observation of para 6 of the Madras High Court it was contended that a demand draft is a bill of exchange drawn by a bank to another bank or by itself on its own branch and is a negotiable instrument not offending the Reserve Bank of India Act It is very nearly allied to a cheque the difference between it and cheque consisting largely in two facts Firstly it can be drawn only by a bank on another bank and not by private individual as in case of cheque Secondly it cannot so easily be countermanded as a cheque either by the person purchasing it, or by the bank to which it is presented., In case of Smt. Kamlesh Kohli and Anr. v. Escotrac Finance & Investment Ltd. and Ors. Reported in 1999 (8) Supreme 414 the apex court has held that there is no bar under CPC to pass decree against some of defendant, In case of State of Gujarat v. Sayed Mohd.Baquir El Edross the apex court held that strong case on merits not a ground for condonation of delay in absence of any cause for delay, In case of A.C. Ananthswamy and Ors. v. Boraiah the apex court referring the case of Choksi Bhidarbhai Mathurbhai v. Purshotamdas Bhogilal Shah Court held that in the case on hand there was no evidence of fraud The case was a matter of non service of summons and there was only a bare allegation of fraud and when the only fraud alleged is a bare non-serve of summons then suit to set aside he decree on such ground was not maintainable. These were the judgments relied upon during the course of arguments.