IN THE HIGH COURT OF KERALA AT ERNAKULAM
SA.No. 768 of 2001()
1. INDIAN OVERSEAS BANK
... Petitioner
Vs
1. V.V.SOMAN
... Respondent
For Petitioner :SRI.P.B.SAHASRANAMAN
For Respondent :SMT.ELIZABETH MATHAI IDICULLA
The Hon'ble MR. Justice THOMAS P.JOSEPH
Dated :20/01/2010
O R D E R
THOMAS P.JOSEPH, J.
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S.A. No. 768 of 2001
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Dated this the 20th day of January, 2010
J U D G M E N T
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Heard both sides.
2. The following substantial questions of law are framed for
a decision.
(i) Whether courts below ought to
have found in view of Exts.B1 and B2 that
claim of deceased plaintiff is barred by the law
of limitation?
(ii) Whether in the light of Exts.B1 to
B3 courts below are legally correct in holding
that the sum of Rs.9,900/- is due to the
deceased plaintiff?
3. Second Appeal arises from concurrent finding
entered by the courts below in A.S. No.130 of 1995 and O.S. No.1 of
1993 and the decree granted in favour of the deceased plaintiff
allowing him to recover the sum of Rs.9,900/- with interest at the
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rate of 12% per annum from 19.9.1986 till date of decree and
thereafter at the rate of 6% per annum till date of realisation with
costs and compensatory costs of Rs.250/-.
4. Facts of the case necessary for a decision of the
questions above framed are: Deceased plaintiff (respondents are his
legal representatives) was holding a SB A/c with the appellant
during the relevant time, opened on 03.03.1980. His case is that he
has been depositing various amounts in the said account and on
5.9.1986, then Cashier of the appellant had unauthorisedly
withdrawn Rs.12,000/- from his account making use of fabricated
withdrawal slip. The Cashier was charge sheeted by the CBI and
convicted for various offences in connection with that withdrawal.
On 5.9.1986 deceased plaintiff had Rs.22,521.30 by way of balance
in his account. On 19.9.1986 he deposited a further sum of
Rs.15,000/- making the balance amount due as on that day to
Rs.37,521.30. His original passbook (Ext.A1) was taken custody by
the CBI in connection with the criminal case against the Cashier.
Appellant issued Ext.A2, duplicate passbook to deceased plaintiff
showing the balance as on 9.10.1986 as Rs.121.30. On 6.11.1986
appellant credited Rs.27,500/- in the SB account under caption “by
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claim”. Original plaintiff was made to sign an indemnity bond and
balance confirmation letter. According to the deceased plaintiff he
did not know banking laws and he signed the documents without
understating the contents. He therefore laid the suit for recovery of
of Rs.9,900/- which according to him ought to have been in his
account by way of balance amount but for the misappropriation by
the Cashier. Appellant contended that on 9.10.1986 balance
amount due in the account of deceased plaintiff was only Rs.121.30
and on 6.11.1986 there was a settlement of the account between
appellant and the deceased plaintiff as per which appellant had
credited Rs.27,500/- in the account of the deceased plaintiff under
caption “by claim”. Thus the balance amount due in the account of
deceased plaintiff was Rs.27,621.30. That balance in the account
was confirmed by the deceased plaintiff as per Ext.B1. He also
executed Ext.B2, indemnity bond undertaking to make good the loss
caused to the appellant in case the balance is not found to be
Rs.27,621.30. It is incorrect to say that the balance in the account
of deceased plaintiff should have been Rs.37,521.30. Trial court
upheld the claim of deceased plaintiff, found that the balance
amount as on 19.9.1986 was Rs.37,521.30 and hence deceased
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plaintiff is entitled to recover Rs.9,900/- from the appellant.
Appellate court has confirmed that finding and decree. Hence this
Second Appeal on the substantial questions of law above framed.
Learned counsel for appellant would contend that the suit is
hopelessly barred by limitation since even as on 6.11.1986 when
Exts.B1 and B2 were executed by the deceased plaintiff in favour of
appellant, the former was aware that balance amount in his
account was only Rs.27,621.30 including the sum of Rs.27,500/-
credited by the appellant under the caption “by claim” in view of the
settlement reached between appellant and the deceased plaintiff.
Learned counsel would contend that the mere fact that notice was
issued to the appellant on 28.3.1992 cannot confer any cause of
action for the deceased plaintiff or extend the period of limitation.
According to the learned counsel suit filed in the year 1993 is barred
by limitation. It is also contended by learned counsel that at any
rate courts below went wrong in holding that balance amount in the
account of deceased plaintiff as on 19.9.1986 was Rs.37,521.30,
ignoring Exts.B1 to B3. So far as Ext.B3 is concerned learned
counsel would contend that it is the true extract of the ledger of the
account of deceased plaintiff maintained by the appellant in the
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usual course of business and hence it could be admitted in evidence
under Section 4 of the Banker’s Book Evidence Act. Learned counsel
placed reliance on the decisions in Krishna Gopal Kakani v.
Bank of Baroda (AIR 2008 SCW 7379) and Bihar State
Electricity Board, Patna v. M/s.Green Rubber
Industries (AIR 1990 SC 699). In response it is contended by
learned counsel for respondents that no plea of limitation has been
raised in the written statement, no such question was urged in the
trial court, that question was raised for the first time only in the first
appellate court and hence that plea cannot be allowed to be raised
in the Second Appeal since question of limitation is a mixed question
of law and fact. So far as acceptability of Exts.B1 to B3 is
concerned learned counsel submits that courts below rightly
disregarded Exts.B1 to B3 and at any rate Exts.B1 to B3 cannot
override Ext.A1, original passbook issued by the appellant so far as
the entires therein are not shown to be incorrect.
5. I shall refer to the substantial question of law framed as
to the issue of limitation. It is true that in the written statement no
specific plea of limitation is raised. But it is not disputed that in
the first appellate court that plea was raised, though it was not
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decided. As pointed out by learned counsel on both sides question
of limitation is one of law and fact. A question of law could be
raised for the first time in the appeal. Now question of limitation is
urged on the facts admitted and proved. Therefore I propose to
decide the question regarding limitation raised in the Second
Appeal.
6. Contention raised by learned counsel for appellant is that
period of limitation for the suit must begin to run from Exts.B1 and
B2 dated 6.11.1986 when deceased plaintiff acknowledged the
balance amount payable to him as Rs.27,621.30. Under Article 22
of the Limitation Act (for short, “the Act”) the period of limitation for
a suit for recovery of the money deposited under an agreement that
it shall be payable on demand including the money of a customer in
the hands of his banker so payable is three years and period of
limitation will begin to run from the date when the demand is made.
The agreement to pay on demand need not be express but may also
be implied. The agreement could also be deduced from course of
dealings. It is not disputed that deceased plaintiff was a customer
of the appellant (banker) and that he was maintaining a SB A/c with
the appellant which is a running account. Though in the case of
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loan or deposit it could be said that there is no fiduciary relationship
between banker and customer as the repayment of loan or deposit is
governed by the terms of the contract, it could not be said so in the
case of a running account. In the case of running account it is
possible to say that money is being retained by the banker in a
fiduciary capacity. In Krishna Gopal Kakani v. Bank of Baroda
(supra) the Supreme Court considered the relationship between a
banker and customer so far as deposit of money is concerned and
held that Article 22 of the Act would not be attracted on the facts
of that case. It was also held that banker was not the trustee for
the money. That is because deposit is on the terms of contract
between customer and the banker. But in paragraph 21 of the
judgment quoting the observations in UCO Bank v. Hem
Chanda Sarkar (AIR 1990 SC 1329) it was held that “we may
also state that in practice bankers do not set up the statute
of limitations against their customers or their legal
representatives, and we see no reason why this case should
be an exception to that practice”. On the facts of this case I am
persuaded to accept the contention of learned counsel for
respondents that there was a fiduciary relationship between
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appellant and the deceased plaintiff as the account of the latter
with the appellant was a running account and it is not a case of loan
or deposit which is governed by the terms of the contract between
them. Appellant was keeping the money in safe custody to be given
to the deceased plaintiff as and when the latter desired. Even as per
Article 22 of the Act period of limitation for suit for recovery of
money of a customer in the hands of his banker is three years
beginning from the date on which demand is made which in the
present case was on 20.3.1992. Suit was filed within three years
from that date. Hence it cannot be said that suit is barred by
limitation.
7. Now what remained for consideration is whether on the
facts and evidence on record courts below were justified in not
acting upon Exts.B1 to B3 in preference to Ext.A1. It is not
disputed that Ext.A1 is the original passbook issued by the appellant
and as per that, on 19.9.1986 there was a deposit of Rs.15,000/-
making up the balance in the account of deceased plaintiff to
Rs.37,521.30. So far as Exts.B1 to B3 are concerned, Ext.B1 is the
confirmation letter dated 6.11.1986 where the balance as on that
day is stated to be Rs.27,621.30 including the sum of Rs.27,500/-
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admittedly credited by the appellant under the caption “by claim” on
that day. Learned counsel for appellant would say that the said
amount was credited in the account of deceased plaintiff following
a settlement reached between appellant and the deceased plaintiff
on 6.11.1986 as evidenced by Exts.B1 and B2. Exhibit B2 is the
indemnity bond for the said sum of Rs.27,500/- executed by the
deceased plaintiff. He has a case that he was not aware of the
contents. That contention of course cannot stand since it is admitted
by the deceased plaintiff that he has executed Exts.B1 and B2. In
Bihar State Electricity Board, Patna v. M/s.Green Rubber
Industries (supra) it is held that a person who executes the
document is normally bound by it even though he has not read it or
was ignorant of the precise legal effect of the document. I am at the
question whether Exts.B1 and B2 by itself would defeat the claim of
deceased plaintiff. Going by Exts.B1 and B2 I am unable to find that
deceased plaintiff had conceded that no amount was deposited by
him on 19.9.1986 or that there was no such balance of
Rs.37,521.30 as on that day. Circumstances in which Exts.B1 and
B2 came into existence has also to be looked into. It is not
disputed that even prior to Exts.B1 and B2, the CBI had proceeded
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against the Cashier of appellant and in connection with that case
Ext.A1, original passbook issued to the deceased plaintiff was taken
custody of by the CBI. Hence Ext.A1 was not with the deceased
plaintiff on 6.11.1986 when Exts.B1 and B2 were executed by him.
On the other hand it is not disputed that it is after Exts.B1 and B2
that Ext.A1, original passbook was returned to the deceased plaintiff
from the custody of the CBI. Exhibit B3 is the certified copy of the
ledger maintained by the appellant. First appellate court found fault
with Ext.B3 for the reason that some of the entries in it appeared to
be the result of overwriting. Learned counsel for appellant would
contend that first appellate court was not correct in observing so and
there is no material to show that Ext.B3 was falsified. In this
connection learned counsel placed reliance on Section 4 of the
Banker’s Book Evidence Act.
8. It is not clear how the balance sum of Rs.27,621.30 was
arrived at. Admittedly deposit of Rs.15,000/- allegedly made by the
deceased plaintiff on 19.9.1986 and shown in Ext.A1 has not been
given credit to in Ext.B3 to say that the balance as on 6.11.1986
(including Rs.27,500/- credited by the appellant on that day) was
Rs.27,621.30. Therefore Exts.B1 and B2 prepared on the basis of
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Ext.B3 necessarily escaped the sum of Rs.15,000/- seen deposited
by the deceased plaintiff on 19.9.1986. If that be so, merely based
on Exts.B1 and B2 appellant cannot wash off its hands so far as the
deposit of Rs.15,000/- is concerned. So far as Ext.A1 is
concerned, I do not find any challenge to it on the ground that it is
either fraudulently created by the deceased plaintiff or that entry
regarding deposit of Rs.15,000/- in the passbook on 19.9.1986 was
the result of collusion between deceased plaintiff and the then
Cashier. So far as the relevant entry in Ext.A1 is not shown to be
incorrect, appellant is bound by it. Taking into account the normal
banking practice and presumption being against illegality, I must
presume that the entry in Ext.A1 on 19.9.1986 was made genuinely
and correctly by the Cashier of the appellant in the course of
discharge of his official duty as Cashier. That binds the appellant. If
a corresponding entry is not made by the Cashier in the ledger
maintained by the appellant, that is not the fault of deceased
plaintiff. In the circumstances for the reason of corresponding entry
regarding deposit of Rs.15,000/- in the account on 19.9.1986 not
being made in the ledger, if at all be so, appellant cannot say that
no such amount was deposited on 19.9.1986. Thus, it is not shown
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that Ext.B3 to the extent it concerned the deposit of Rs.15,000/-
shown in Ext.A1 on 19.9.1986 is concerned, is true and correct. The
presumption attached to Ext.B3 so far as the impugned deposit is
concerned, stands rebutted by Ext.A1. If that be so, Exts.B1 and B2
prepared on the basis of Ext.B3 cannot be accepted in preference to
Ext.A1. Exhibit A1 binds the appellant. Appellant being in a
fiduciary capacity, was bound to pay the amount when asked for by
the deceased plaintiff on 20.3.1992. Courts below are therefore
justified in not preferring Exts.B1 to B3 to Ext.A1. The Substantial
questions of law framed are answered accordingly.
Second Appeal is dismissed. No costs.
Civil Miscellaneous Application No.1817 of 2001 shall stand
dismissed.
THOMAS P.JOSEPH, JUDGE.
vsv
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THOMAS P.JOSEPH, J.
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S.A. No.768 of 2001
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J U D G M E N T
20TH JANUARY, 2010
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