RSA No. 3181 of 2009 (1)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
RSA No. 3181 of 2009
Date of Decision: 2.9.2009
M/s Ganesh Dal, Oil and General Industires and others
......Appellants
Versus
State of Bank of India .......Respondent
CORAM: HON’BLE MR. JUSTICE HEMANT GUPTA.
1. Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
Present: Shri Mohit Garg, Advocate, for the appellants.
HEMANT GUPTA, J. (Oral).
Defendants No. 1 to 5 are in second appeal aggrieved against
the judgment and decree passed by the learned first Appellate Court,
whereby suit for recovery of Rs.5,42,099.30p along with interest @ 9% per
annum from the date of filing of the suit till payment has been decreed with
costs.
Defendant-appellants entered into number of agreements for
availing financial assistance such as cash credit facility, demand draft
purchase facility etc. As per the plaintiff, in order to avail demand draft
purchase facility, the defendants submitted eight bills for the value of
Rs.2,53,598/- from 2.7.1982 to 14.7.1982 along with Railways
Receipts/Motor Transport Receipts. The same were accepted, but were
dishonoured on presentation and returned unpaid. After adjusting the
credit and debit entries, a sum of Rs.5,05,545.72, stood recoverable from
RSA No. 3181 of 2009 (2)
the defendants on account of advances availed of by the defendants under
the cash credit limit. A sum of Rs.36,553.58 is the interest recoverable and
thus, the plaintiff claimed the aforesaid amount.
The findings recorded by the learned first Appellate Court are
that the defendants executed the documents towards demand draft purchase
facility and the cash credit limit and that the suit is within time. Such
findings are not disputed in the present appeal.
Learned counsel for the appellants has firstly argued that the
Motor Transport Receipt and/or Railways Receipts having been accepted
by the Bank and payment made to the defendants in terms of the demand
draft purchase facility, therefore, the plaintiff Bank is not entitled to
recover the amount from the defendants as their right is to recover the
amount from the consignee alone or the transporters and not the defendant-
appellants. In support of such contention, reliance is placed upon
Corporation Bank and another v. Navin Shah, (2000)2 Supreme Court Cases
628 and Dena Bank v. The M.P. National Textiles Corporation Ltd., AIR
1982 Madhya Pradesh 85. It is further argued that the findings recorded are
not based upon pleadings. It is not the case of the plaintiff that the goods
receipts were fake, but finding has been so recorded. Lastly, it is argued that
the cheques signed by Bhushan Kumar on behalf of the defendant-firm are
the unauthorized payments made by the Bank and, therefore, the appellants
are entitled to set off the amount of the said cheques. Reliance is placed
upon Meenakshi Achi and another v. P.S.M. Subramanian Chettiar and
others, AIR 1957 Madras page 8.
I do not find any merit in any of the arguments raised by the
learned counsel for the appellants.
RSA No. 3181 of 2009 (3)
The fact that the defendants have withdrawn the amount on the
strength of goods allegedly consigned by it through the Motor Transporters
or Railways is not disputed by the appellants. In fact, such is finding of fact
on the basis of statement of PW2 -S.M. Kataria, the Manager of the Bank.
The bills and the receipts are Exhibits P.18 to P.32 produced on record.
Exhibits P.51 to P.68 are the cheques by which the defendant-appellants
have withdrawn the amount of Rs.2,53,598/-. The Bills were received back
unpaid by the Collecting Branches of the Bank. Learned counsel for the
appellants has vehemently argued that the first Appellate Court has returned
a finding that such receipts were fake. There was no pleading of the
plaintiff that the Motor Transport Receipts or the Railways Receipts are
fake. Therefore, the finding recorded by the learned first Appellate Court is
not based upon the pleadings of the plaintiff.
The learned first Appellate Court has relied upon notices
Exhibit P.70 to P.73 served upon the transporters to return the bills. Such
notices were served upon the defendants vide Exhibit P.74. Exhibit P.81 is
the reply given by respondent No.2 undertaking to pay the balance amount.
It was found that the goods were never dispatched against the Motor
Transport Receipts produced by the defendants.
The amount of the Bills against which the defendants released
payment on proof of the dispatch, was never paid by the consignees,
therefore, the appellants have been rightly made liable for payment. It is the
defendants, who have been paid for the amount of the bills of the goods
allegedly sent by the defendants. Since the appellants are the beneficiaries
of the payment, they alone are responsible for making the payment to the
Bank.
RSA No. 3181 of 2009 (4)
The judgment in Corporation Bank’s case (supra), is not
applicable to the facts of the present case. It has been held therein that once
the Bank has purchased or discounted an instrument from a customer and
credited the customer with the amount of the instrument and allowed the
customer to draw against the amount as credited before the bill or
instrument is cleared, then the Bank would be collecting the money not for
the customer but chiefly for itself. There is no dispute about the proposition
of law laid down in the aforesaid judgment, but the controversy in the
present appeal arises on account of dishonour of the instruments. When the
bills were presented for payment, they have not been honoured. It is the
defendant-appellants who have taken the benefit in advance with the goods
allegedly sent by the defendants. Therefore, the ratio laid down in the
aforesaid judgment is of no assistance to the argument raised by the learned
counsel for the appellants.
Similarly, in Dena Bank’s case (supra), the Court has held that
if the relevant documents are discounted by the bankers without waiting for
its collection by the drawee by giving full credit for the entire amount of the
document, the banker itself becomes a purchaser and the holder thereof for
full value. The aforesaid judgment is again not helpful to the argument
raised by the learned counsel for the appellant for the reason as given in
Corporation Bank’s case (supra).
The argument that the plaintiff has not set up a case of fraud in
presentation of the bills, whereas the first Appellate Court has returned a
finding that the goods receipts were fake is again inconsequential The
primary reason to claim the amount of bills is their dishonour. The bills can
be dishonoured for variety of reasons including the same being actuated by
RSA No. 3181 of 2009 (5)
fraud. It is not the case of the appellants that such bills have been honoured
by the consignees. Once the bills are not honoured, the liability to pay and
the benefits thereon, would be on the person, who has drawn such benefits.
Therefore, I do not find any substance in the argument raised by the learned
counsel for the appellants.
About 700 cheques were issued by the defendants. Out of such
cheques, 275 cheques in the sum of Rs.2 lacs were issued under the
signatures of Bhushan Kumar. Bhushan Kumar is admittedly not a partner
of the defendant-firm. It has been found by the learned first Appellate Court
that Bhushan Kumar is not a stranger but son of defendant No.3 and
defendant No.4, brother of defendant No.2 and husband of defendant No.5.
The issuance of a large number of cheques by Bhushan Kumar shows that
he has implied authority to act on behalf of defendant No.1-firm and its
partners never raised any objection about the encashment of cheques by
Bhushan Kumar. The said finding cannot be said to be erroneous when
Bhushan Kumar is not a stranger . In fact, the defendants permitted him to
be a representative of the firm. Such representation was never disputed by
the defendants for a long period of time.
Consequently, I do not find any patent illegality or material
irregularity in the finding recorded or that the finding recorded gives rise to
any substantial question of law in the present second appeal.
Hence, the present appeal is dismissed.
(HEMANT GUPTA)
JUDGE
02-09-2009
ds