TaxTMI 
TaxTMI 
TaxTMI 
2012 (7) TMI 1063
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.... deposit was made through duly authorising his Manager Mr.Anis.A.Abid. The second respondent issued six receipts each for ₹ 95 lakhs and 7th receipt for ₹ 65 lakhs. The maturity of the fixed deposit was on 13.8.2011. As the fixed deposits were to mature on 13.8.2011, the petitioner requested through his manager to issue pay order by discharging the F.D. receipts. However, the second respondent staff directed the petitioner to contact one Mr.D.R.Naik, the erstwhile Chief Manager, who was working as Divisional Manager in third respondent bank. Though the petitioner's manager contacted the said Mr.D.R.Naik, the respondent bank did not take any step to pay the amount, compelling the petitioner to write a letter on 25.8.2011 and again on 26.8.2011. Thereafter, the petitioner issued notice dated 31.8.2011 to pay the amount. The first respondent replied on 7.9.2011. However, no step was taken by the respondent bank. Therefore, the petitioner is before this Court. 3. The second and third respondents filed counter affidavit denying the contentions made in the writ petition. 4. It is contended that even though the petitioner deposited ₹ 6.35 crores and the date of mat....
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....ounts were already paid, the second respondent bank did not comply with the petitioner's request for payment. Meanwhile, the respondent bank instituted a criminal complaint before the Superintendent of Police, Economic Offence Wing, Central Bureau of Investigation, Chennai and a case has been registered by CBI under RC.No.15 (E) of 2011 and investigation is in progress. Till the investigation is over, the amounts cannot be paid. 7. By giving the above version, the second and third respondent bank questioned the maintainability of the writ petition. It is contended that the writ petition is not maintainable as disputed questions of facts and triable issues are involved and the proper course is to approach the civil court for remedy and the petitioner is guilty of suppression of material facts and wanton mis-representation and he has not approached the court with clean hand and therefore, the writ petition is liable to be dismissed. 8. Mr.George Cheriyan, learned counsel for the petitioner submitted that the petitioner only made the deposits through his Manager Mr.Anis A Abid, who is authorised to transact with the respondent bank; The petitioner did not give any authorisation ....
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....dy lodged a criminal complaint with CBI and the investigation is in progress. Therefore, pending investigation, the amount cannot be paid. In nutshell, he submitted that equity can be worked out in proper forum and not before the Writ Court. He relied upon a constitution Bench judgement of the Hon'ble Apex Court in State of Madhyapradesh and another vs. Bhailal Bhai and others reported in AIR 1964 SC 1006 to contend that when the disputed question of fact are involved, the discretionary relief under Writ Jurisdiction cannot be granted. 10. Heard the parties and perused the records carefully. It is an admitted fact that the petitioner deposited a sum of ₹ 6 crores 35 lakhs in seven fixed deposits with the maturity date on 13.8.2011. The the FDR receipts details are as here under: No. FDR No. Deposit Amount Maturity Amount 1 0909401003525/2 95,00,000.00 1,01,84,614.00 2 0909401003525/3 95,00,000.00 1,01,84,614.00 3 0909401003525/4 95,00,000.00 1,01,84,614.00 4 0909401003525/5 95,00,000.00 1,01,84,614.00 5 0909401003525/6 95,00,000.00 1,01,84,614.00 6 0909401003525/7 95,00,000.00 1,01,84,614.00 7 0909401003525/8 65,00,000.00 1,01,84,614.00 T....
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....e above letter should have been taken note of by the officials and the authencity of the letter should have verified from the petitioner. That apart one another important aspect is that Mr.Anis.A.Abid was the original authorised agent who made the deposit whereas the subsequent letter authorised a stranger Lawrence. When such a letter is produced for encashment of FDR proceeds, that too to the tune of ₹ 3.80 crores, (Pre closure of 4 FDR receipts), it is the bounden duty of the concerned bank officials to verify the authencity of the letter either with the petitioner or with Mr.Anid A Abid. 13. The procedure for repayment of deposit before maturity is contained in clause 30.1.1, 30.2.1, 30.2.2 of the bank manual of the second respondent bank. The said clauses are extracted as follows: " 30.1.1 Term deposits are contracts whereby the depositor agrees to receive principal amount after a certain period agreed upon at the time of deposit, interest being received either periodically or at maturity. Hence, a depositor who seeks payment before maturity is not acting as per the contract. Subject to observance of rules and procedure governing repayment of Term Deposits before ....
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....eds to be verified by the supervisor/manager. In the absence of the signature of the Supervisor/Manager in the FDR issued by the bank, would certainly prove that the verification was not done by the Supervisor/Manager and it is the violation of the norms of the banks and the bank officials acted in negligent and carelessness manner deliberately with malafide motive. 15.It is the contention of the second respondent bank that as per the alleged petitioner's letter dated 19.11.2010, the petitioner informed about the loss of two original FD receipts and requested to issue duplicate FDRs in lieu of the original FDR receipts bearing No.090401003525/7 and 090401003525/8 for the value of ₹ 95 lakhs and 65 lakhs. A close scrutiny of the said letter dated 19.11.2010 would reveal that the authorised person Mr.C.H.Lawrence name is neither stated in the body of the letter nor typed in the bearer column and only the name is found to be hand written below his alleged signature. When a person looses original FD receipts that too to the tune of ₹ 95 lakhs and ₹ 65 lakhs receptively, the best expected is a police complaint to be given. Neither police complaint was given nor th....
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....# 761023 for ₹ 95 lakhs( This Deposit receipt was issued by the branch by changing the value date of the original deposit receipt bearing Sl # 761016. The original deposit was not obtained by the branch at the time of issuing fresh deposit receipt). ii) Two Duplicate Deposit Receipts bearing Sl # 761556 and 761557 for ₹ 95 lakhs and ₹ 65 lakhs repsectively. iii) In respect of the remaining 4 Deposit receipts for ₹ 95 lakhs each closed before maturity, Bank's water mark is not appearing. Hence, the same appear to be fake." As the two duplicate receipts bearing Sl.No.761556 and 761557 were issued by the bank in the place of alleged loss of original FDRs, naturally the duplicate receipts would have water mark of the bank. The penultimate paragraph of the above complaint dated 12.10.2011 reads as follows: "Thus, it is clearly evident that there appears to be a criminal conspiracy among the perpetrators to defraud the bank and to make an unlawful gain. It is also evident that there is involvement of Sri D.R.Naik, Chief Manager, of our Guindy Branch, Chennai, ( who has since been placed under suspension) which facilitated the fraudsters to per....
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....hat the bank officials only acted fraudulently with malafide motive with the connivance of third parties and paid the amounts to strangers illegally. Therefore the second respondent bank is responsible for the fraudulent and negligent acts which cannot be disowned by the bank. Entertainment of forged documents and payments are admitted in the complaint given by the bank to CBI, which would only show that there is nothing wrong on the petitioner and the bank acted negligently and unlawfully to deprive the petitioner's legitimate dues. The bank is answerable for the fraud or negligence committed by the bank officials. Therefore this court holds that the petitioner is entitled to get the proceeds of the 7 FD receipts from the second respondent bank. 21. As per class 1.5 of RBI circular-RBI/2011-12/74 dated 01.07.2011, it is the bounden duty of the bank to report the frauds involving ₹ 1 crore and above to the Special Committee of the Board, which is to be constituted as per class 5.2.4 of the circular and the said committee should monitor and follow up the acts of fraud involving ₹ 1 crore and above. However, there is no mention in the counter affidavit about the repo....
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....e judgement of the Hon'ble Apex Court in paragraph 17, which has been categorically stated by the constitution bench as follows: "17. At the same time we cannot lose sight of the fact that the special remedy provided in Article 226 is not intended to supersede completely the modes of obtaining relief by an action in a Civil Court or to deny defences legitimately open in such actions. It has been made clear more than once that the power to give relief under Article 226 is a discretionary power. This is specially true in the case of power to issue writs in the nature of mandamus. Among the several matters which the High Courts rightly take into consideration in the exercise of that discretion is the delay made by the aggrieved party in seeking this special remedy and what excuse there is for it. Another is the nature of controversy of facts and law that may have to be decided as regards the availability of consequential relief. Thus, whereas in these cases, a person comes to the court for relief under Article 226 on the allegation that he has been assessed to tax under a void legislation and having paid it under a mistake is entitled to get it back, the court, if it finds t....
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....of the disputed amount from the account, as well as bank liability was admitted and there was no justification for the bank to file suit on the ground of disputed questions of fact. It is further observed that such functioning of a nationalised bank is detrimental to public interest and it follows the practice of transferring money of its customer to some other person account on oral authority, people will loose faith in the credibility of the bank. The facts of the case is similar to the case in hand. In that case the amount was transferred on oral instruction. Whereas in this case, the amount was paid to strangers based on the alleged petitioner's authorisation letter which was not verified with the petitioner and bogus FDRs which is admitted by the bank itself. 25. The Hon'ble Supreme Court in State of West Bengal and others vs. Committee for Protection of democratic rights reported in 2010 (3) SCC 571 held in its constitution bench judgement that the High Courts are authorised under Article 226 of the Constitution of India to issue a direction or orders or writ to any person or authority including any government to enforce fundamental rights and for any other purposes.....
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....orrower, the Appellant bank therein failed to return latter's title deeds. Therefore, writ of writ of mandamus issued by the High Court for returning title deeds was upheld by the Hon'ble Supreme Court, rejecting the contention of the bank that the proper forum is Civil Court and further held that writ petition is maintainable in contractual matter. The above said position of law settled by the Hon'ble Supreme Court would make it clear that the writ petition is maintainable against the respondent bank. 27. The second respondent bank contended that adjudication of the disputed questions of facts cannot be made by the Writ Court. It has been held by the Hon'ble Supreme Court in ABL International Limited vs. Export Credit Guarantee Corporation of India Limited reported in 2004 3 SCC 553 that it is not an absolute rule that in all cases involving disputed questions of facts the party should be relegated to civil court. The Hon'ble Supreme Court followed the earlier judgement in Gunwant Kaur Smt and others vs. Municipal Committee Bhatinad reported in 1969 (3) SCC 769 and Century Spinning and Manufacturing Company Ltd. And another Ulhasnagar Municipal Council and ano....
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....follows: "79. Inaction, arbitrary action or irresponsible action would normally result in dual hardship. Firstly, it jeopardises the interest of the Bank and public funds are wasted and secondly, it even affects the borrower's interest adversely provided such person was acting bona fide. Both these adverse consequences can easily be avoided by the authorities concerned by timely and coordinated action. The authorities are required to have a more practical and pragmatic approach to provide solution to such matters. The concept of public accountability and performance of functions takes in its ambit proper and timely action in accordance with law. Public duty and public obligation both are essentials of good administration whether by the State instrumentality and/or by the financial institutions." In Kesharichand Jaisukhalal vs. Shillon Banking Corporation Limited Shilon ( in liquidation) reported in AIR 1965 SC 1711 (V52 (292). The Hon'ble Supreme Court held that the bank is bound to use reasonable skill and diligence in presenting and securing payment of the cheque and placing proceeds to its customers account in taking such other steps as may be proper to secur....
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....uments before this Court. On the contrary deliberate falsehood, by suppressing material facts, has been pleaded in their counter to gain advantage and to deny the dues to the petitioner unlawfully. Though the second respondent in paragraph 27 of the counter affidavit stated that the criminal complaint has been filed before the CBI, copy of the complaint was not filed as a document by the respondents. The petitioner only filed the FIR before this Court on 11.11.2011. Mere reference about CBI complaint in the counter is not enough and the pleadings should be in consonance with the facts stated therein without twisting the facts to its convenience. Though the compliant was filed against Mr.DR.Naik, then Chief Manager (under suspension) Guindy Branch of the second respondent Bank and others accusing the involvement of DR.Naik, criminal conspiracy to defraud and to make unlawful gain, the said fact is suppressed in the counter affidavit. It is submitted in the criminal complaint that no letter of authority is available on record for the payment made in respect of KDR No.3525/9 printed Sl.No.761023 for ₹ 95 lakhs and the payment was made on 12.11.2010. Whereas, in para-19 of the co....