Delhi District Court
Suit No. 168/03 vs Anoop Kumar on 8 March, 2010
1 IN THE COURT OF SH. SAMAR VISHAL, CJ02 (North), DELHI SUIT NO. 168/03 MEMO OF PARTIES. Canara Bank, through its manager Sh. K. S. Salvan, East of Kailash, New Delhi. ..................Plaintiff Versus Anoop Kumar Prop. M/s Bhagwati Electronic, A86, Devli Extension, New Delhi62. ...........Defendant SUIT FOR RECOVERY OF RS.11,610/ Date of institution of Suit: 28.07.2003 Date on which judgment was reserved: 22.02.2010 Date of announcement of judgment: 08.03.2010 Judgment This is a suit for recovery of money filed by the plaintiff, who is a public sector bank against the defendant. Plaintiff alleges that the plaintiff is a body incorporate. The present suit has been filed by Sh. K.S. Selven, who is the manager and principal officer of the bank at East of Kailash Branch. He was fully conversant with the facts of the case and he also holds a 2 GPA in his favour executed by the bank to file the present suit. Defendant is a proprietor of M/s Bhagwati Electronics dealing in the business of electronics. Defendant approached the plaintiff bank for the opening of Current Account in the year 2000 and after completing of formalities the current account of the defendant was opened. It was given the number 5802. Plaintiff has also executed the proprietorship letter of account opening form on 18.4.2000. Defendant started operating the account and he approached the plaintiff bank and requested for a temporary overdraft as he was in dire need of money and accordingly the plaintiff bank granted him temporary overdraft of Rs.6,000/ on 31.8.2000. The defendant utilized this facility and assure that he will deposit the amount. Plaintiff bank approached the defendant but despite various assurances, he never kept his promise and neglected to pay the outstanding amount due on him. The plaintiff bank also sent a legal notice through its Advocate dated 14.7.2003 calling upon the defendant to clear the outstanding amount due on him. Plaintiff has also claimed an interest @ 15% per annum as per the Reserve Bank of India directions. Plaintiff averred that according to their statement of account an amount of Rs.11,610/ is due and outstanding which includes the principal interest and other charges upto 25.7.2003. To recover this amount, the present suit has been filed. Only defendant no.1 has filed his written statement in this case alleging that the plaintiff has neither ever provided any overdraft facility to the defendant nor the defendant has ever requested for the same. The defendant never utilized any overdraft facility. It is alleged by the defendant that Sh. Lakhi Ram i.e. Defendant no.2 3 is an employee of the plaintiff bank and the bank in connivance with defendant no.2 has opened the account of defendant no.1. In the month of July, 2000, the defendant no. 1 approached the plaintiff bank with an application for closing his bank account, and the defendant no.2 met defendant no.1 and asked him to give the application form for closing the account as well as cheque book to him for its return to the bank. But later on the defendant was shocked to see the notice of this suit and he has averred that he has never issued any self cheque. It is alleged by him that defendant no.2 and plaintiff bank in connivance with each other have cheated the defendant no.1 and committing a forgery as the cheque no. shown in the statement does not match with the numbers of the cheque book of the defendant. It is averred in the written statement that no amount of Rs.11,610/ is due and outstanding in his account. With these averments he has requested for the dismissal of the suit. In replication there is a repetition of plaint averments and denial of material allegations made in the written statement. Defendant has also filed a counter claim in this case, which was already decreed vide decree dated 25.5.2005. In this case following issues were framed on 25.5.2005; 1. Whether any overdraft facility has been granted by the plaintiff to the defendant? OPP. 2. Whether the suit has been signed, verified or filed by duly authorised person? OPP. 3. Whether the plaintiff is entitled for the recovery of Rs.11,610/? OPP. 4 4. Whether the plaintiff is entitled for any interest, if so, at what rate and for what period? OPP. 5. Relief. In order to prove his case, plaintiff has examined Sh. K.S. Selven, Manager of plaintiff bank who has filed the present suit. He has relied upon documents Ex.PW1/1 to Ex.PW1/7. On the other hand, defendant has examined himself as defendant witness. My issuewise findings are; Issue no.1 Whether any overdraft facility has been granted by the plaintiff to the defendant? OPP. In order to prove this issue, plaintiff has examined Sh. K. S. Selven who is the plaintiff witness, who has deposed on oath that the defendant approached the plaintiff and requested for temporary overdraft facility and he was given a temporary overdraft facility of Rs.6,000/ on 31.8.2000 and the self cheque dated 31.8.2000 bearing no. 046680 was cleared amounting to Rs.6,000/. This cheque was duly signed by the defendant and is Ex.PW1/5. In his cross examination this witness has deposed that he was posted in the bank from July, 2003 to 23.9.2003. It means that the time at which the overdraft facility was granted to the defendant, he was not posted in the bank and therefore, whatever has transpired between the defendant and plaintiff bank had not transpired in his presence. His deposition are only on the basis of records maintained by the bank. He has also accepted this fact in his cross examination where he has deposed that he has not 5 received any application for granting overdraft facility from the defendant. Overdraft facility was provided to the defendant but he cannot tell the exact date but it was done in the year 2000. He has deposed that no document was executed while granting temporary overdraft facility. He has denied that overdraft facility is only given on written documents. There is no doubt that at the time of granting overdraft facility, no documents were executed by the defendant in favour of the plaintiff and it was an oral overdraft facility. The person with whom the defendant has requested for oral overdraft facility has not been examined by plaintiff who could have been very material witness in this case. But the statement of account Ex.PW1/7, shows that there must be an overdraft facility available to the defendant otherwise it is beyond imagination how his cheque dated 31.8.2000 was cleared when he do not have sufficient amount on 31.8.2000. Defendant has not disputed any particular entry in the statement of account. Although, he has made a general statement that the statement of account showing the balance of Rs.11,610/ is false. This statement of account is duly certified under the Banker Book Evidence Act and therefore, admissible in evidence and presumed to be correct unless a particular entry is clearly disputed by the some person. In his cross examination, the defendant has admitted that he has signed on the cheque Ex.PW1/5. He has not averred anywhere that this cheque has been lost and he has not explained how the cheque has reached the bank and how 6,000/ rupees was cleared in his account. He has averred in his plaint that he has returned the cheque book to the defendant no.2 but this signed cheque clearly compels this Court to make a 6 presumption against him that this cheque has been duly signed by him for a good consideration. The presumption is unrebutted. For the purpose of creating liability on the defendant no.1, I am relying upon a judgment of Hon'ble Bombay High Court cited as 1986 60 CompCas 163 Bom, titled as Bank Of Maharashtra vs United Construction Company And Others on. The facts of the case on which I relied although are different but the issue involved in this case was also that whether the defendant has taken an overdraft facility because the defendants in that case also denied that they had taken an overdraft facility. Although, in the present case, the particular person with whom the defendant agreed for an overdraft facility has not proved by the plaintiff in this case but the cheque Ex.PW1/5, statement of account Ex.PW1/7 clearly shows that there was some overdraft facility available with the defendant which he has duly availed and therefore, now he cannot escape from his liability. In the case mentioned above regarding the issue of overdraft facility it was observed that ''As to the question whether there was any agreement to grant overdraft facility, it might be useful to note that in Halsbury's Laws of England (fourth edition) volume 3, at page 155, it has been stated as follows : "A customer may borrow from a banker by way of loan or by way of overdraft. A loan is a matter of special agreement. In the absence of agreement, express or implied from a course of business, a banker is not bound to allow his customer to overdraw. An agreement for an overdraft must be supported by good consideration, and it may 7 be express or implied. Drawing a cheque or accepting a bill payable at the bankers where there are not funds sufficient to meet it, amounts to a request for an overdraft." 8. In Cuthbert v. Robarts, Lubbock and Co. [1909] 2 Ch 226, CozensHardy M. R. (at page 233 of the report) has observed as follows : "If a customer draws a cheque for a sum in excess of the amount standing to the credit of his current account, it is really a request for a loan, and if the cheque is honoured the customer has borrowed money." 9. Further observations go on to show that it was held that such borrowing would be a simple transaction of borrowing and would not amount to borrowing upon security. But we are not concerned with that question here. Paget in his classic treatise on the Law of Banking (1972 edition) at page 132 has observed as follows : "A banker is not obliged to let his customer overdraw unless he has agreed to do so or such agreement can be inferred from course of business; borrowing and lending are a matter of contract not necessarily premeditated but, possibly, spontaneous, as where a customer, without previous arrangement, draws a cheque, payment of which overdrawn his account." 10. Unfortunately, the aforesaid decision and the aforesaid books were not shown to the learned trial judge. If the legal position set out in the same is taken into account there is no doubt that where a customer, namely, an accountholder in bank, even without any express grant of an overdraft facility overdraws on his account and the cheque issued by him is honoured, the transaction amounts to a loan and the customer is bound to make good the loan to the bank with reasonable interest. As far 8 as Mr. Sayed, learned counsel for the respondents, is concerned, he did not point out
any decision or textbook where a view contrary to the above has been propounded. He merely stated that he supported the decision of the trial court and had nothing more to say.
11. We are, therefore, of the view that the learned trial judge was, withrespect, in error in dismissing the suit of the plaintiff on the ground that there was no express oral agreement regarding the grant of overdraft as alleged by the plaintiff. Even in the absence of such an express agreement, in our view, in the circumstances of the case, there was an implied agreement for grant of overdraft or loan facility and the customer, namely, defendant No. 1 was liable to make good to the bank the amount overdrawn in its aforesaid current account with reasonable interest''. The clearance of cheque in the accont of the defendant on the cheque issued by him clearly shows that he has availed the overdraft facility and hence is liable to pay for the same. Therefore, this issue is decided against the defendant and in favour of the plaintiff.
Issue no.2 Whether the suit has been signed, verified or filed by duly authorised person? OPP.
To prove this issue, plaintiff has examined the manager of Canara Bank Sh. K.S. Selven, who has filed the present suit in the capacity of the manager of the Canara Bank. He has deposed on oath that that he was fully conversant with the facts of the case on the basis of the records pertaining to this case. He also hold GPA in his favour from the bank which is still valid and hence he was fully authorised and 9 empowered by the plaintiff bank to sign, verify and institute, sign pleadings, file documents, as may be just and necessary in the interest of the plaintiff bank and to do each and every correlated acts on behalf of plaintiff bank as he deem fir and proper in the interest of the plaintiff bank in connected with the present case. This witness has placed on record the GPA in his favour which is Ex.PW1/1. The burden to prove this issue is on the parties. Defendant has alleged that Sh. K. S. Selven was not competent to file the present suit but he has not averred any basis for alleging this fact. The present suit has been filed by Sh. K. S. Selven who at the time of filing was the branch manager of plaintiff bank. In United Bank of India Vs. Naresh Kumar & Ors AIR 1997 (SC) 3, 1996 (6) SCC, 600, Hon'ble Supreme Court held that'' In cases like the present where the suits are instituted or defended on behalf of Public Corporation, public interest should not be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts under the Code of Civil Procedure to ensure that injustice is not done to any party who has a just cause. As far as possible a substantive right ought not be allowed to be defeated on account of procedural irregularity which is curable Therefore, when the suit is filed by a principal officer or the bank manager, I do not find any infirmity in the filing of the suit in view of this judgment. This issue is decided against the defendant and in favour of the plaintiff. Issue no.3 Whether the plaintiff is entitled for the recovery of Rs.11,610/? OPP. While deciding issue no.1, I come to the conclusion that an overdraft facility was 10 granted to the defendant in this case. The plaintiff has not disputed the correctness of the entries in the statement of account Ex.PW1/7. Defendant has duly admitted the execution of the cheque through which the overdraft facility has been availed by him. The defence averred by him that he has given the cheque to defendant no.2 or that the defendant no.2 in collusion with the plaintiff has cheated him is not proved in this case. He could have summoned defendant no.2 and could have cross examined him in respect of the allegations made by him against the defendant no.2, which he has not done in this case. Defendant no.1 has admitted the execution of the loan application form Ex.PW1/2 and proprietorship form Ex.PW1/3. He has not denied the opening of the current account. Therefore, in the facts and circumstances of the case, defendant is completely liable and the defence alleged by him are not proved. This issue is decided against the defendant and in favour of the plaintiff. Issue no.4 Whether the plaintiff is entitled for any interest, if so, at what rate and for what period? OPP.
The plaintiff has claimed an interest @ 15% per annum according to the guidelines of Reserve Bank of India. No agreement has been proved on behalf of plaintiff regarding the rate of rent and according to the plaintiff, the rate of rent was claimed on the basis of Reserve Bank of India guidelines in this case. The overdraft facility is not proved in the present case and it has been ascertained only on the basis of the other witness in this case.
The plaintiff has claimed an interest @ 15% per annum which according to the plaintiff is the rate of rent approved by the Reserve Bank of India on the commercial 11 transactions like in the present case. Therefore, the plaintiff is also awarded the interest @ 15% per annum.
Issue no.5 Relief.
On the basis of aforesaid discussions, the suit of the plaintiff is decreed for a sum of Rs.11,610/ along with pendentelite and future interest @ 15% per annum till its actual realization against defendant no.1.
Announced in the open court (SAMAR VISHAL) On 08.03.2010 CJ02 (North)/Delhi 08.03.2010 12 08.3.2010 Suit No.168/03 Vide separate judgment, the suit of the plaintiff has been decreed. Decree sheet be prepared accordingly.
File be consigned to the record room.
(Samar Vishal) CJ02/North/Delhi.