High Court Kerala High Court

Indian Overseas Bank vs V.V.Soman on 20 January, 2010

Kerala High Court
Indian Overseas Bank vs V.V.Soman on 20 January, 2010
       

  

  

 
 
  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withdrawn Rs.12,000/- from his account making use of fabricated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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