Calcutta High Court (Appellete Side)
The West Bengal State ... vs Punjab National Bank & Ors on 18 May, 2022
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
Present:
The Hon'ble Justice Aniruddha Roy
WPA 19959 of 2014
The West Bengal State Co-Operative Bank Ltd. & Anr.
Vs.
Punjab National Bank & Ors.
For the petitioners: Mr. Shakti Nath Mukherjee, Sr. Advocate,
Mr. Saptansu Basu, Sr. Advocate,
Mr. Sukanta Chakraborty, Advocate,
Mr. Anindya Halder, Advocate.
For the P.N.B.: Mr. Jishnu Choudhury, Advocate,
Ms. Aparajita Rao, Advocate.
For the RBI: Mr. Alok Kumar Banerjee, Advocate,
Mr. Arunabha Sarkar, Advocate.
Reserved on: 06.05.2022
Judgment on: 18.05.2022
ANIRUDDHA ROY, J.:
Facts
:
1. The first writ petitioner is a State Co-Operative Bank and a Scheduled Bank
within the meaning of the Reserve Bank of India Act, 1934 (for short, the R.B.I.
Act) carries on, inter alia, banking business. The first petitioner is also
registered under the provisions of the West Bengal State Co-Operative Act,
1940 (for short, the Co-Operative Act) and carries on its business, inter alia, at
and from its Registered Office/Head Office at 24A, Waterloo Street, Kolkata.
2. Pursuant to the functional requirement and mandate, the first petitioner was
required to deploy its excess funds, inter alia, in fixed deposits with the
Commercial Banks as an inter bank investment as and when such excess
funds accrued in its account, after disbursement of all its banking obligations
in order to earn interest income so that its funds get increased.
3. Following the said obligations the first petitioner negotiated, at the relevant
point of time, with several bankers to obtain maximum available interest on its
deposit. In course of such negotiation, and in usual course of business, the
Punjab National Bank, being the first respondent herein (for short, PNB) agreed
to provide the highest available interest to the first petitioner at the relevant
point of time. The first respondent through its Salimpur Branch by its letter
dated January 17, 2013 made a proposal to the petitioners to accept a bulk
deposit for a sum of Rs. 10 crore and above for a period of one year with
interest @ of 9.65% per annum. The first petitioner was requested to remit its
fund in favour of PNB through electronic mode of transfer at its Account No.
1770002100040286 through the IFSC Code No. PUNB0177000.
4. Pursuant to and in terms of the said offer/proposal made by the PNB, on
January 22, 2013 the first petitioner reviewed the same and found that, the
said proposal of the first respondent was with the maximum available rate of
interest at 9.64% per annum for a period of one year. Thereafter further
negotiation was held by and between the first petitioner and the first
respondent, when it was agreed by and between the parties that the first
petitioner would invest a sum of rupees more than Rs. 10 crores but not more
than Rs. 20 crores for a period of three years at the same rate of interest and
the offer of the first respondent for the same was duly accepted by the first
petitioner.
5. The first petitioner then on January 24, 2013 duly remitted and deposited a
sum of Rs. 20 crores in favour of the first respondent through Real Time Gross
Settlement (RTGS) process, which is an electronic mode of transfer of fund
though the payment and settlement platform of the ninth respondent (for
short, R.B.I.) at 11:14:50 hrs at the designated IFSC Code and the account
number provided by the PNB, the recipient bank. The necessary Unique
Transaction Reference (UTR) bearing no. WBSCP13024000001 was
generated, this denoted the due receipt of the said sum of Rs. 20 crores
remitted and deposited by the first petitioner in favour of the PNB. The further
detail of the transaction was mentioned in paragraph 5 of the writ petition.
6. After the said deposit being made at the account of the PNB, the third
respondent being the Senior Manager PNB on February 04, 2013 through its
forwarding letter duly issued the necessary certificate of the said fixed deposit
bearing account no. 177000DP00001447 w.e.f. January 24, 2013 showing
the maturity dated as January 24, 2016 and the sum a maturity would be
Rs. 26,35,18,454.93/-. The said fixed deposit receipt issued by PNB along with
its forwarding letter was disclosed as Annexure P-4 to the writ petition.
7. The petitioners thereafter came across some news from the daily newspaper
regarding some disputes relating to fixed deposits arose out of fraud with the
UCO Bank, Circus Avenue Branch, Kolkata. The first petitioner then by its
letter dated March 20, 2013 requested PNB to confirm the balance on account
of the said fixed deposits for a sum of Rs.20 crores. In response to the said
letter on March 21, 2013 the first petitioner received a letter from PNB issued
by one Mr. A.C. Saha Sardar, Branch Manager, of the Salimpur Branch, where
from for the first time the first petitioner came to know that the PNB had not
opened the said fixed deposit account bearing the said no.
177000DP00001447 at this branch in favour for the first petitioner for the
said sum of Rs. 20 crores.
8. Immediately the first writ petitioner through its letter dated March 21, 2013
narrating the entire facts lodged a complaint before the Deputy Commissioner
of Police, Detective Department, Kolkata alleging fraud and wrongful
misappropriation of the said sum of Rs. 20 crores against the PNB and its
officials.
9. Pursuant to and in terms of the said compliant necessary First Information
Report (FIR) No. 191 dated March 22, 2013 was drawn up, inter alia, under the
various provisions of the Indian Penal Code (for short, the IPC). The Police
Authorities started the necessary investigation in the matter. The original
documents relating to the transactions were seized and lying with the
concerned police authority. Criminal case was registered before the Learned
Chief Metropolitan Magistrate, Kolkata as GR Case No. 191 dated March 22,
2013. Pursuant to the direction made by the Criminal Court an amount of
Rs. 1,09,51,500/- along with some gold ornaments valued at Rs. 21,91,754/-
were returned. Few officials of the PNB were also arrested from whom such
recovery was made.
10. According to the petitioners the said wrongful misappropriation of huge fund
would give rise to various statutory default and negligence, for which the
petitioners will be held liable.
11. Despite demands made by or on behalf of the petitioners, the first respondent
failed to return the fixed deposit amount to the first petitioner. In view of the
above, the petitioners filed the writ petition praying for the following reliefs:
"a) A writ in the nature of Mandamus commanding and/or directing the
Respondent Nos.1 and 2, specially the Respondent no.2 to take
appropriate steps for refunding and/or returning the sum of Rs.20 crore
deposited on 24.01.2013 in the form of Fixed Deposit (FD), for a period
of 3 years, with the respondent Nos.1 and 2, specially Punjab National
Bank, Salimpur Branch @ 9.64% interest per annum till the payment;
b) A writ in the nature of Certiorari directing the respondent No.2 and
each one of them to transmit all relevant documents of the respondent
bank to this Hon'ble Court for perusal of the same and for passing
necessary order quashing the adverse remarks or statements if any
made by the respondents against the interest of the petitioner bank;
c) A writ in the nature of Mandamus directing the Reserve Bank of India
to pass appropriate order and/or take decision declaring that the
amount of Rs.20 crore deposited with the respondent with the
respondent bank, Respondent no.2 herein, shown as Loss Asset in the
audit report in the financial year 2012-2013, as Performing Asset
instead of Non-Performing Asset (NPA);
d) A writ in the nature of Mandamus directing the Union of India and/or
appropriate authorities for appointing a high level investigating agency
to unearth the fraud on public fund having access to all corners of the
country and abroad for taking appropriate steps against the persons
involved in misappropriation of fund and further for recovery of the
same;
e) An appropriate order of declaration that the amount of Rs.20 crore
and above, shown as Loss Asset in the financial year 2012-2013, as
performing asset;
f) An order of injunction restraining the respondents by passing adverse
order or specifically any order against the petitioner bank relating to the
banking business under Section 22 of the Banking Regulation Act,
1949;
g) Ad-interim Order in terms of prayers (a), (c), (d), (e) & (f);
h) Rule NISI in terms of prayer (a) & (f) as above;
i) Any other or further order or orders, direction or directions as this
Hon'ble Court may deem fit and proper".
12. Pursuant to the direction made by this court the first respondent had filed its
affidavit-in-opposition and the petitioners had filed their affidavit-in-reply.
13. The principle defence of the first respondent to the said writ petition had been
summarized under various sub paragraphs to paragraph 4 of its affidavit-in-
opposition. According to the first respondent, one Mr. Sanjoy Kumar Pandey
was a constituent of the Salimpur Branch of PNB. The said Sanjoy Kumar
Pandey carried on business under the name and style of one Laxmi Enterprise.
The said Laxmi Enterprise opened a Current Account with the Salimpur
Branch on December 22, 2012. The said account was opened after due
compliance with the procedure relating to Know Your Customer (KYC)
formalities, as mandated by the R.B.I. After the introduction of electronic
transaction the money could be transferred from one account to another by
various electronic modes, one of which is RTGS. In case of transfer of fund
through RTGS, PNB had no role to play. The code numbers are inserted by the
payee and on receipt of confirmation from the receiving bank the money gets
automatically transferred. By a letter in writing the first petitioner informed the
first respondent that they had made RTGS in favour of Laxmi Enterprise, a
copy of such letter was also annexed as Annexure R-3 to the said affidavit-in-
opposition. The first respondent by its letter dated January 28, 2013 confirmed
the credit of Rs. 20 crores to the account of the said Laxmi Enterprise through
RTGS and requested the first petitioner to inform them about the purpose of
such credit. On or about February 04, 2013 the first respondent received a
letter from the first petitioner informing it had made RTGS for a sum of Rs. 20
crores in favour of the said Laxmi Enterprise against a tender for construction
of a hospital. A copy of the said letter of the first petitioner dated February 04,
2013 was annexed as Annexure R-5 to the said affidavit-in-opposition. In view
of the exchange of such correspondence, the first respondent contended that,
there was no reason for suspicion about the operation of account of Laxmi
Enterprise. The said sum of Rs. 20 crores was then withdrawn in a phase
manner from the said account by the Laxmi Enterprise. A supporting Bank
statement was annexed as Annexure R-6 to the said affidavit-in-opposition.
The first respondent further contended that the account of the Laxmi
Enterprise was then made inoperative.
14. In the affidavit-in-reply the petitioners denied the contentions of the first
respondent. The petitioners contended that, pursuant to the criminal
complaint lodged on their behalf some officials including a former employee of
the PNB were identified by the Police Authority during investigation. The said
Athindra Chandra Saha Sardar was detected to have received monetary
consideration for the said fraudulent misappropriation of the Fixed Deposit.
Some officials of PNB were arrested. It was further contended that, the account
of the said Laxmi Enterprise was opened on December 22, 2012 in violation of
the relevant RBI Regulation and without following the same. The documents
annexed to the affidavit-in-opposition filed by the PNB as Annexures R-3 and
R-5 were never issued by the first petitioner. The petitioners further contended
that, the letter head of the first petitioner which were disclosed and relied upon
by PNB in its affidavit-in-opposition were not the letter head of the first
petitioner and the same is ex facie clear on a plain look of the same and on
perusal of the tenor thereof. The said documents according to the petitioners
were manufactured, purposive and engineered for the purpose of setting up an
alleged defense against the claim of the petitioner and were relied upon by the
first respondent. The petitioners further contended that, the document being
Annexure R-4 to the affidavit-in-opposition is also a manufactured one. In
addition to this, the petitioners further stated that there were serious violation
of the various guidelines and norms issued by RBI on the part of the first
respondent.
15. RBI had also filed its affidavit-in-opposition affirmed on December 22, 2015.
RBI contended that, the writ petition was not maintainable against it and its
official, the tenth respondent, as they had not failed to perform any public or
statutory duty. Thus, no relief can be granted against them in this writ
petition.
Arguments:
16. Mr. Shakti Nath Mukherjee, Learned Senior Counsel, appearing in support of
the writ petition submitted that, the Fixed Deposit was made pursuant to the
offer made by the first respondent as it had agreed to provide highest rate of
interest @ of 9.65% per annum amongst other bankers. Following the said offer
the first writ petitioner in acceptance thereof agreed and deposited a sum of Rs.
20 crores in the Fixed Deposit Account with the first respondent. The first
respondent had duly provided its bank detail including the Account Number
and the IFSC Code as mentioned in its letter dated January 17, 2013 and it
was specifically mentioned that the cheque should be issued in favour of the
first respondent at its Account No. 1770002100040286. Pursuant to such
instruction and the information provided by the first respondent, the first
petitioner on January 24, 2013 duly deposited the said sum of Rs. 20 crores at
its said account. Such deposit was made through an electronic mode of
transfer, namely RTGS, which is an uniform platform and system created by
RBI. Such fact would also be evident from Annexure P-3 to the writ petition.
After being satisfied with the said deposit of Rs. 20 crores made by the first
petitioner, by a forwarding letter dated February 04, 2013 the first respondent
issued the original Fixed Deposit Receipt (FDR) for a sum of Rs. 20 crores for a
period of 1096 days, which would earn an interest @ of 9.65% per annum in
favour of the first petitioner. The Fixed Deposit Account number as allotted by
the first respondent was 177000DP00001447 with its Salimpur Branch. The
said forwarding letter was issued under the seal and signature of the then
Senior Manager of the first respondent and the Fixed Deposit Receipt was duly
signed by the two officials of the first respondent, who were the authorized
signatories of it. These two documents had never been questioned by the first
respondent save and except a general and evasive denial in its affidavit-in-
opposition. By a letter dated March 20, 2015, when the first petitioner
requested the first respondent for a balance confirmation with regard to the
Fixed Deposit Account, then for the first time by a letter dated March 21, 2013
the first respondent informed that it had not opened the Fixed Deposit Account
in the name of the first petitioner but no explanation was provided as to the
fate of the same. Though PNB had issued the original FDR in favour of the first
petitioner. Immediately the petitioner lodged a complaint dated March 21, 2015
before the concerned Police Authority and the criminal case was initiated by
the State.
17. Mr. Mukherjee, Learned Senior Counsel then submitted that, from the
affidavit-in-opposition for the first time the petitioner came to know as to the
frivolous stand of the PNB that the amount was credited in the account of one
Laxmi Enterprise bearing Current Account Number 1770002100040286,
who had utilized and/or withdrawn the same from time to time. The relevant
correspondence being Annexure R-4 to the said affidavit-in-opposition filed by
the PNB is a manufactured document as would be evident from it. The
document according to Mr. Mukherjee was not genuine. He further submitted
that, the first petitioner had no nexus or connection with the said Laxmi
Enterprise in any manner whatsoever neither the first petitioner had any
privity of whatsoever nature with the said entity. No construction work was
entrusted to the said Laxmi Engineering by the first petitioner in any manner
whatsoever. Thus, the question of making any payment of Rs.20 crores to the
Laxmi Enterprise from the public deposit did not and could not arise. The
letters relied upon by the first respondent in its opposition being Annexures
R-3 and R-5 thereto were manufactured documents only to create a dispute on
facts to defeat the claim in the writ petition. Referring to the document
Annexure P-5 to the writ petition, the learned senior counsel submitted that,
these two documents namely R-3 and R-5 of the opposition are ex facie
manufactured and the letter head was not of the first petitioner.
18. The Learned Senior Counsel for the petitioners then submitted that, the act of
the Senior Manager or the authorized signatories of the first respondent binds
the first respondent. The authorized signatories or the Senior Manager being
an employee of the first respondent had a vicarious liability towards its
principle, the first respondent. The first respondent did not raise any objection
as to the Fixed Deposit Receipt issued by it in favour of the first petitioner after
being satisfied with the deposit of Rs. 20 crores made by the petitioner. The
first respondent had duly issued the said Fixed Deposit Receipt which was duly
signed by its Authorized Officers. Save and except an evasive denial in its
opposition, the first respondent did not dispute or deny the said Fixed Deposit
Receipt. The first respondent also did not throw any challenge in due process of
law to the said Fixed Deposit Receipt. The first respondent, therefore, could not
take any stand contrary thereto. The first respondent did not even deny or
dispute the authority of the authorized signatories who had signed and issued
the Fixed Deposit Receipt. The act of such authorized signatories of the first
respondent binds it as well. In support, Mr. Mukherjee, Learned Senior
Counsel had relied upon the following decisions:-
i.) In the matter of: Sitaram Motilal Kalal vs. Santanuprasad
Jaishankar Bhatt, reported at (1966) 3 SCR 537: AIR 1966 SC
1697;
ii.) In the matter of: Pushpabai Purshottam Udeshi & Ors. vs. M/s.
Ranjit Ginning & Pressing Co. (P) LTD. & Anr., reported at (1977) 2
SCC 745;
iii.) In the matter of: Canadian Pacific Railway Company vs.
Leonard Lockhart, reported at 1942 SCC OnLine PC 25: AIR 1943
PC 63;
iv) In the matter of: Ashok Amritraj vs. Reserve Bank of India,
reported at 2012 (5) CTC 763 and;
v) In the matter of: Indian Bank vs. Godhara Nagrik Cooperative
Credit Society Limited & Anr., reported at (2009) 4 SCC 629.
19. The learned counsel for the writ petitioner then submitted that, the PNB being
an article 12 authority had acted clearly in breach of and failed to perform
with its statutory obligation by not returning the total fixed deposit proceed on
its maturity to the first writ petitioner. The action and/or in action on the part
of the first respondent is clearly arbitrary, mala fide, illegal, wrongful and in
colorable exercise of its power and authority. Hence, necessary direction may
be made upon the first respondent to return the fixed deposit proceed to the
first petitioner without any further delay.
20. Mr. Alok Kumar Banerjee appeared for the ninth and tenth respondents being
the R.B.I. and its official. He denied the allegations made in the writ petition as
against his clients. Mr. Banerjee submitted that, R.B.I. did not act in any
manner which is in violation of any of its statutory obligation, it is obliged to
discharge under the relevant law. The R.B.I. had performed all its
responsibilities and duties in the matter. It is a dispute really between the
petitioners and the first respondent to which the ninth respondent had no role
to play. Thus, no relief can be granted against the ninth and tenth respondents
in this writ petition.
21. Mr. Jishnu Chowdhury, learned counsel with M/s. Aparajita Rao, learned
advocate appeared for PNB and its respective officials namely the respondent
nos. 1 to 3. At the threshold, Mr. Jishnu Chowdhury, learned counsel for the
PNB submitted that, this is a classical case which could be decided in a
properly constituted civil suit alleging a clear case of fraud. Referring to the
pleadings filed by the parties he submitted that, in the light of the defence
taken by the first respondent in its affidavit-in-opposition and the
corresponding response of the petitioners thereto in their affidavit-in-reply and
on a plain reading of the averments made in the writ petition, it would be
evident that, complicated disputed questions of facts arose, which were fit to be
tried by way of a complete and comprehensive evidence/witness action and as
such writ petition could not be the proper proceeding. Inasmuch as, the first
writ petitioner had already lodged a criminal complaint under the relevant
provisions of Indian Penal Code (IPC), in terms whereof the State prosecution
had already issued the necessary charge-sheet upon the accused and criminal
case was also registered against such accused. Some of such accused were also
arrested who were the concerned bank officials at the relevant point of time
along with an ex-employee of the bank. The Jurisdictional Criminal Court
would come to a logical conclusion after detail trial, upon which the claim in
the writ petition would depend for its result. Thus, the said writ petition is not
maintainable at all in the facts and circumstances of the case.
22. Learned counsel for the first respondent then submitted that, from a plain
reading of the writ petition it is clear that the petitioners sought to enforce a
money claim that too where the facts were wholly disputed. It is not such that
the money claim in the writ petition was admitted by the first respondent or on
its behalf so that a simple direction for release of such money could be made in
this writ petition. There was no explicit admission by the first respondent in
respect of the disputed money claim made in the writ petition. The claim arose,
if at all, out of a contract between the parties thereto. No contractual claim can
be enforced or released through a writ petition. No mandamus could be issued.
In support, Mr. Chowdhury had relied upon the following decisions:
i) In the matter of: Indian Bank vs. Godhara Nagrik Cooperative
Credit Society Limited & Anr., reported at (2008) 12 SCC 541 and;
ii) In the matter of: M/s Hyderabad Commercials vs. Indian
Bank & Ors., reported at 1991 Supp (2) SCC 340 and;
iii) In the matter of: W.P. No. 24410 (W) of 2013 Rashmi Ispat Ltd.
vs. Bank of India, reported at 2013 SCC OnLine Cal 14874.
23. Learned counsel for the first respondent next submitted that, the fiduciary
relationship would not apply between the master and servant, when the
servant acted beyond his authority of employment prescribed by its master.
Such an act on the part of the servant is unauthorized, illegal and would not
bind the master. In support, the learned counsel placed reliance on the
following decisions:
i) In the matter of: State Bank of India (Successor to the Imperial
Bank of India) vs. Smt. Shyama Devi, reported at (1978) 3 SCC
399;
ii) In the matter of: The Secretary, Naguneri Peace Memorial Co-
operative Urban Bank Ltd. Naguneri vs. Alamelu Ammal reported
at AIR 1961 Madras 419 and;
iii) In the matter of: N. Sridhar vs. Maruthi Jayaraman & Anr.,
reported at (2009) 152 Comp Cas 100.
24. Mr. Chowdhury further submitted that, forgery and fraud are essential by
matters of evidence which could be proved as a fact by direct evidence or by
inferences drawn from proved facts in the case. He submitted that, the
allegations of fraud as alleged by the parties could only be decided by way of a
complete of trial in a civil action and not in this writ petition. The writ petition
is, therefore, not maintainable. In support, he relied upon a judgment of the
Hon'ble Supreme Court In the matter of: Indian Bank vs. Satyam Fibres (India)
Pvt. Ltd., reported at AIR 1996 SC 2582.
25. To sum up his argument, the learned counsel submitted that, in a complicated
disputed facts like the instant case, the writ petition is not maintainable. The
role of the employees of the first respondent who were involved in the fraud
also needed to be ascertained upon a proper judicial finding, for which the
criminal case is pending and such a wrongful act on the part of the employees
would not bind the first respondent. Thus, the first respondent has no liability
towards the petitioners. The petitioners, therefore, cannot claim the return of
the fixed deposit proceeds from the first respondent through this writ petition.
The writ petition is misconceived and is liable to be dismissed.
26. The parties upon conclusion of their respective arguments filed their written
notes.
Decision:-
27. The principle contention raised on behalf of the PNB that the writ petition
involved a money claim simplicitor on various disputed questions of facts and
on fraud, the Writ Court thus, should not adjudicate upon such claim.
28. To address this issue the relevant averments made in and the documents
appended to their respective pleadings are required to be considered. Some of
such relevant averments made by the parties in their respective pleadings are
reproduced below:-
Writ Petition
"2. That the Petitioner bank, i.e., The West Bengal State Co-operative bank Ltd.
is required to deploy its excess funds in Fixed Deposits of Commercial Banks as
Inter Bank investment, investment in Consortium Finance, Purchase of Bond,
Commercial Deposit (CD), investment in Co-llaterase Boroughing and Lending
Obligation (CBLO) etc. as and when required after exhausting the loan
proposals, considering the need of the Bank in order to earn higher interest
income and keep the pubic deposit safe.
3. That the Punjab National Bank, Selimpur Branch under their reference letter
no.Sprb/1256/12-13, dated 17/01/2013 sent a proposal through fax to the
Managing Director of The West Bengal State Co-operative Bank Ltd. for bulk
deposit of Rs.10.00 crores and above for a period of one year with interest rate
@9.65% per annum with their bank deposit account no. 1770002100040286,
IFSC Code No. PUNB0177000 and name of the Branch Manager being Atindra
Ch. Saha Sardar.
A copy of the letter of the Branch Manager, Selimpur Branch received through
FAX message is annexed herewith and marked with the letter "P-1".
4. That the members of the Investment Committee on 22.01.2013 reviewed the
position and found that the offer sent by Punjab National Bank, Selimpur
Branch regarding special rate of interest @ 9.65% p.a. for 1 year and
telephonically confirmed period up to 3 year for more than Rs.10 crore but not
more than Rs.20 crore being the most suitable offer to invest the surplus fund
for sage and secured gainful income. Members analysed and resolved that the
proposed rate was better in comparison to other offers. It was further resolved
to request the Chief Dealer to deploy towards Punjab National Bank, Selimpur
Branch Rs.20 core for 3 year tenure @ 9.65% on 24.01.2012 if proposal
remains valid.
5. That based on such resolution an amount of Rs.20 crores were remitted to
the Selimpur Branch of the Punjab National Bank through Real Time Gross
Settlement (RTGS), the Payment and Settlement platform of Reserve Bank of
India, on 24.01.2013 at 11:14:50 hours at the designated IFSC Code and
Account Number cited above as informed by the recipient bank and the system
generated one UTR (Unique Transaction Reference) being number
WBSCP13024000001 through which the recipient bank also received the
following instructions:
: Transaction
2020: Reference Number
T10
Transaction
Reference Number
:4488 Value Date,
Currency, Amount
24/01/2013
Value Date
INR
Currency
20,00,00,000.00
Amount
:5500: Ordering Customer THE WEST BENGAL STATE COOPERATIVE
Ordering Customer BANK LTD.
:5517: Ordering Institution WBSC0000001
Bank Identifier
Code
:5561: Benficiary
Customer
1770002100040286
Account Number
Name and Address THE WEST BENGAL STATE COOPERATIVE
BANK LTD.
:7495 Sender to Receiver
Information Code
URGENT
Information TDR FOR 3 YEARS
Following Code
/ / AT THE RATE OF 9.65 PER CENT
Additional
Information
/ / PER ANNUM ON QTRLY
/ / COMPUND BASIS
So, there was a clear lawful authorized irrevocable official mandate from the
part of the Petitioner bank that the Petitioner bank intended to open a Term
Deposit for 03 years @ 9.65% interest on quarterly compounding basis in favour
of the Petitioner bank.
A copy of the system generated RTGS mandate drawn from the payment and
settlement system of the Reserve Bank of India is annexed herewith and
marked with the letter "P-3".
6. That on 04.02.2013 through forwarding letter no. Sprb/1321/12-13 the Sr.
Manager, Punjab National Bank, Selimpur Branch, Respondent no.3 herein sent
the certificate of fixed deposit of bearing account number 177000DP00001447
with effect from the 24th January, 2013 showing the matured value Rs.
26,35,18,454.93 through Special Messenger.
A copy of the Deposit receipt of the Respondent bank alongwith the forwarding
letter dated 04.02.2013 are annexed herewith and marked with the letter "P-4"
collectively.
11. That through newspaper reporting and (XXth) Statutory Inspection Report of
NABARD it revealed that a few officials of the Respondent bank had been
arrested by the Police and reportedly some recovery also had been made by the
Police. The Petitioner bank craves leave to submit the necessary document in
course of the hearing.
Copies of the availing newspaper reporting and a copy of the relevant portion of
NABARD, Inspection Report are annexed herewith and marked with the letter
"P-9" and "P-10" respectively.
12. That the Learned Chief Metropolitan Magistrate, Kolkata under his order in
the matter of GR Case No. 191 dated 22.03.2013 had returned an amount of
Rs.1,09,51,500/- (Rupees One Crore Nine Lakhs Fifty One Thousand Five
Hundred only) and gold ornaments of value Rs. 21, 91,754/- (Rupees Twenty
One Lakhs Ninety One Thousand Seven Hundred Fifty Four only) to the
Petitioner bank on the condition that the Managing Director of the Petitioner
Bank would produce the same before the Court as and when called for and
were given liberty to keep the amount in any nationalised Bank. The petitioner
bank craves leave to produce the order of the learned criminal court at the time
of hearing of this case. The Petitioner Bank and kept the seized amount as
fixed deposit with a nationalsed bank ".
Affidavit-in-opposition filed by PNB
"6. Statements made in paragraphs 1 to 4 of the said petition are matters of
record.
7. Allegations made in paragraph 5 of the said petition are denied. I deny that
the sum of Rs.20.00 crore or any other sum was remitted to the Selimpur
branch of the respondent no.1 favoring the petitioner no.1 as alleged ir at all.
There is no account in the name of the petition with the respondent no.1 bank.
8. With reference to paragraph 6 of the said petition I say that no such
document was ever issued by the respondent no.1. I say that the document
relied on by the writ petitioner is not genuine and no reliance can be placed on
the same.
11. With reference to paragraph 11 and 12 of the said petition I say that the
bank is not a party to the criminal proceedings and I am not aware of the
same".
29. From the verification of the writ petition, the above stated averments were
verified as derived from informations from records in course of the official
business of the deponent and he believed the same to be true to his knowledge.
From the verification of the said affidavit-in-opposition the above statements
were verified to be true to the knowledge of the deponent. The deponent was
the third respondent (defendant as stated) in the writ petition and was the
Senior Manager of PNB, Salimpur Branch. The authority of the said deponent
was not under challenge.
30. On a careful scrutiny of the documents appended to the said pleadings filed by
the parties, it appeared from Annexure P-1 to the writ petition that, the said
document was issued by the Senior Manager of PNB providing the details and
particulars of the account number and the IFSC Code of the particular Branch
of the PNB at which the writ petitioner was asked to deposit the money for
creation of the Term Deposit/Fixed Deposit. The PNB also promised the rate of
interest being 9.65% per annum payable to the first petitioner. The petitioner
was asked to issue a cheque in favour fo the PNB and deposit the money in
Account No. 1770002100040286. Annexure P-3 to the said writ petition
was a transaction reference document showing the deposit of Rs. 20 crores
made by the first petitioner on January 24, 2013 in the same Account
Number for a term of three years at the said agreed rate of interest. This was a
document generated electronically evidencing the deposit made by the first
petitioner with the first respondent. Annexure P-4 to the writ petition is a
forwarding letter dated February 04, 2013 issued by the PNB enclosing the
original Fixed Deposit Receipt (for short, the FDR) for the said sum of Rs. 20
crores for 1096 days. The FDR Account No. was mentioned as
177000DP00001447 and the Branch Serial No. was mentioned as 177000.
This document was signed by the Senior Manager of PNB. The appended
document thereto was the copy of the original FDR which contained the title as
"confirmation of deposit". The Branch was mentioned as "Salimpur Road
Kolkata". The Branch Serial No. mentioned as 177000. The FDR Account No.
was mentioned as 177000DP00001447. The date of issue was mentioned as
January 24, 2013 and the date of maturity was mentioned as January 24,
2016. The Maturity Value was mentioned as Rs. 26,35,18,453.93/- . The
invested amount was mentioned as Rs. 20 crores. The said document was
signed by the two authorized signatories of the PNB and was signed by both of
them on January 24, 2013. The Annexure P-1 was addressed to the Managing
Director (M.D.) of the first petitioner. Annexure P-4 was addressed to the
General Manager.
31. By a letter dated March 20, 2013 signed by the Managing Director of the first
petitioner, the first petitioner requested the Branch Manager, Salimpur
Branch, PNB for a confirmation as to the balance amount under the said Fixed
Deposit Receipt with the face value of Rs. 20 crores with the necessary details.
In reply to the same by a letter dated March 21, 2013 signed by the Branch
Manager Salimpur Branch, PNB informed the Managing Director of the first
petitioner that, the first respondent did not open any such Fixed Deposit
Account at their Branch in the name of the first petitioner for the said sum of
Rs. 20 crores. At this juncture, according to the first respondent the dispute
started.
32. In the affidavit-in-opposition the first respondent annexed several documents
in support of their contention that, the Salimpur Branch also had a Bank
Account of one Laxmi Enterprise through its proprietor one Sanjay Kumar
Pandey (for short, the proprietor). Annexures R-3, R-4 and R-5 to the said
affidavit-in-opposition were the correspondence exchanged allegedly between
the first writ petitioner and the first respondent showing that, that the first
respondent caused the RTGS in favour of the said Laxmi Enterprise at its
account no. 1770002100040286 against a tender for construction of hospital.
The said letter was signed by an authorized signatory of the first petitioner. The
first respondent confirmed that the said sum of Rs. 20 crores was credited to
the account no. 1770002100040286 to the credit of Laxmi Enterprise on
January 24, 2013 through RTGS caused by the petitioners. The said letter was
signed by the Manager of the Selimpur Branch and was addressed to the
authorized signatory of the first petitioner. An authorized signatory of the first
petitioner by its letter dated February 04, 2013 confirmed the Branch Manager
of the Selimpur Branch that the said sum of Rs. 20 crores was issued through
RTGS in favour of the Laxmi Enterprise against a tender for construction of a
hospital. Such payment was the first installment. Annexure R-6 to the said
affidavit is a statement of account relating to the account of the said Laxmi
Enterprise which was opened on December 22, 2012, showing the credit of a
said sum of Rs. 20 crores on January 24, 2013 and the continuous withdrawal
of diverse from sums time to time from the said account of Laxmi Enterprise till
December 31, 2014 (Value Date) and January 03, 2015 (Tran Date).
33. Upon a careful scrutiny of the averments made by the parties and the evidence
disclosed in support thereof there was no doubt that the term deposit account
was opened and the said sum of Rs. 20 crores was deposited by the first
petitioner through RTGS in the specific bank account as was provided by the
first respondent and the first respondent by issuing the said original Fixed
Deposit Receipt unequivocally accepted, confirmed and admitted such deposit.
Annexures P-1, P-3 and P-4 to the writ petitions were not in any way
challenged, questioned, rebutted or controverted by the first respondent. The
first respondent also did not deny and challenge the issuance and existence of
the said documents and the power and authority of the signatories thereof,
save and except a bare and evasive denial of Annexure P-4, for the sake of
denial, which was no denial in the eye of law. These documents read with the
relevant averments made by the parties in their respective pleadings clearly
showed that, the first respondent had received the said sum of Rs. 20 crores
from the first petitioner with a promise to pay interest thereupon @ 9.65% per
annum as a Term Deposit/Fixed Deposit. The mode of transfer was RTGS
which was an automated system and platform generated under the control and
authority of the ninth respondent. Neither the petitioners nor the first
respondent had any role to play on the said RTGS platform.
34. Till the time the said Laxmi Enterprise alleged to have utilized and withdrawn
the said amount, the first respondent was the custodian of the same. On
March 20, 2013 when the first writ petitioner requested the first respondent for
confirmation of the said term deposit, the first respondent by its letter dated
March 21, 2013 informed, that the said Fixed Deposit was not available in the
name of the first petitioner and even then the first respondent did not take any
step whatsoever as a trustee and/or custodian of the said sum for not allowing
the said third party Laxmi Engineering of withdraw the said sum or any part
therof from its bank account maintained with the fist respondent or to probe
into the issue.
35. The said transaction between the first petitioner and the first respondent were
thoroughly commercial in nature. A person with a common and commercial
prudence when found a dispute had cropped up with regard to the said
substantial and huge quantum of money invested by the petitioners,
immediately would have caused a detailed enquiry to be made and if necessary,
would have initiated an appropriate proceeding in accordance with law before
the Jurisdictional Court of law to resist, counter and dislodge the claim of the
petitioners. No such step was taken by the first respondent. The writ
petitioners lodged criminal complaint immediately, inter alia, on the ground of
fraud, criminal breach of trust and misappropriation of the said term deposit
account against the officials of the first respondent. Charge sheet had been
issued. The said criminal proceeding is awaited trial. It was submitted on
behalf of the first respondent that, some of the officials had also been arrested.
However, the first respondent did not take any step against its delinquent
officials who according to the first respondent may be involved in the fraud.
36. On the strength of the said documents being Annexures P-1, P-3 and P-4, as
they stand, there was an unequivocal admission on the part of the first
respondent to have the said sum of Rs. 20 crores received from the first
petitioner on account of term deposit. This fact is undisputed and not an iota
or shade of dispute could be thrown in assessing the said documents. Cause of
action in a proceeding, are the bundle of facts. Each and every fact which are
claimed to be disputed in a proceeding may not really be relevant. It is only the
material fact which is disputed or not, is relevant for the purpose of
adjudication of a proceeding. As suppression of each and every fact are not
relevant, it is only the material suppression which is relevant for adjudication
of a particular proceeding. In the instant case the material facts are the
execution, existence and exchange of documents being Annexures P-1, P-3 and
P-4 to the writ petition which are not disputed. Once these documents and/or
evidences stand in the eye of law without any rebuttal, as in the facts of this
case, the claim of the petitioners for return of the term deposit proceed gets a
solid foundation.
37. It is really not a money claim in true and strict sense. The petitioners are
basically claiming return of their property, which had been withheld by the first
respondent without any established procedure of law. There was no
requirement of any adjudication of claim. The property of the petitioners in the
form of money stood crystallized as on January 24, 2016 for a sum of
Rs.26,35,18,454.93 by virtue of the unequivocal admission of the first
respondent, as would be evident from Annexures P-1, P-3 and P-4 to the said
writ petition. The term deposit of Rs. 20 crores had matured pursuant to the
promise made by the first respondent with an agreed rate of interest on
January 24, 2016.
38. Even if, the accused are convicted in the criminal trial, which is still pending,
the criminal charges would be proved and as a consequence, the petitioners
would not get their term deposit proceed returned from the first respondent.
The first respondent had not proceeded against any of its alleged delinquent
employees allegedly involved in the fraud, as it was claimed that the delinquent
employees acted in excess or in derogation of their authority. No legal
proceeding was initiated by the first respondent in this regard. So the
respondent now cannot take the plea as a defense that the alleged delinquent
employees involved in the alleged fraud had acted beyond, dehorse or in excess
of their authority after unequivocally accepting and acknowledging the said
sum of Rs.20 crores having been received from the first petitioners on account
of the said Term Deposit.
39. It is not an absolute bar that the writ court cannot go into the disputed
questions of facts, though this court is of the firm view, that in the facts of this
case the material facts are not disputed that the first respondent had received
the said sum of Rs. 20 crores from the petitioners and were duty bound to
return the same on its maturity as on January 24, 2016. It is a self imposed
restrictions by the writ court that when facts are so disputed that the
adjudication is impossible without a detailed witness action and without a
detail fact finding enquiry, normally the writ court avoids such adjudication
and relegates it to a properly constituted civil suits. However, this is not such,
in the facts of this case as discussed above.
40. In a much celebrated decision, the Hon'ble Supreme Court, In the matter of:
ABL International Ltd. & Anr. vs. Export Credit Guarantee Corporation Of India
Ltd. & Ors., reported at (2004) 3 SCC 553, had observed:
"51.............................................................................................................
..................................................................................................................
.........................................................................................................
Therefore, in our opinion, it does not require any external aid, much less any
oral evidence to interpret the above clause. Merely because the first respondent
wants to dispute this fact, in our opinion, it does not become a disputed fact. If
such objection as to disputed questions or interpretations is raised in a writ
petition, in our opinion, the courts can very well go into the same and decide
that objection if facts permit the same as in this case. We have already noted
the decisions of this Court which in clear terms have laid down that mere
existence of disputed questions of fact ipso facto does not prevent a writ court
from determining the disputed questions of fact".
41. In the matter of: M/s Hyderabad Commercials (supra) the Hon'ble Supreme
Court had observed as under:-
"2. This appeal is directed against the judgment and order of the
High Court of Andhra Pradesh dismissing the appellant's writ
petition on the ground that it involved disputed questions of facts
which could be determined by the civil court in a suit. After
hearing learned counsel for the parties and having perused the
material on record we find that the case does not involve any
disputed questions of facts instead on admitted facts the
appellant is entitled to relief.
5. Since the basic facts regarding the unauthorized transfer of the
disputed amount from the appellant's account as well as the
bank's liability was admitted, there was no justification for the
High Court to direct the appellant to file suit on ground of disputed
questions of fact. The respondent bank is an instrumentality of the
State and it must function honestly to serve its customers".
The ratio in the said decision, to my view, squarely supported the claim of the
petitioners. The documents being Annexures P-1, P-3 and P-4 to the writ
petition squarely show an unequivocal admission on the part of the first
respondent that, the sum of Rs. 20 crores was deposited by the first petitioner
on account of the said term deposit with the Selimpur Branch. The said
Annexure P-4 (the FDR) was also an unequivocal admission on the part of the
first respondent that on maturity of the term deposit as on January 24, 2016
the same would be crystallized to a sum of Rs. 26,35,18,454.93/-, payable to
the first petitioner. This can also be construed and accepted as an admission
within the meaning and expression "otherwise" as defined under the
provisions of Rule 6 under Order XII of the Code of Civil Procedure, 1908.
Hence, on the strength of the ratio of the said judgment, in my view, the claim
of the writ petitioners was well founded.
42. In the matter of: Rashmi Ispat Ltd. (supra) the respondent bank refused to
release the payment to the writ petitioner therein, as the account holders
where from the money was to be released had been frozen or its operations
were suspended in connection with a criminal proceeding pending against such
account holder (respondent No.7 therein) from whose account the payment was
demanded by the writ petitioner. In the facts of the instant case, there being no
such embargo, the ratio of the said decision has no application in the facts and
circumstances of the instant case.
43. In the matter of: Godhara Nagrik Cooperative Credit Society Ltd. & Anr. (supra),
in the facts of this case the deposit was made through some so-called
commission agents of the banks on payment of huge commission which was
ordinarily not allowed by the nationalize banks. The bank refused to accede to
the request of the investors for encashment of the FDR since the proceed was
paid by way of loan and no amount thus, was payable. In the instant case
there was no involvement of any such so-called commission agents of the bank.
The money was transferred directly from the account of the first petitioner to
the specific account of the first respondent in terms of the details and
particulars as provided by the first respondent through Annexure P-1 to the
petition and consequently as an unequivocal admission of receipt of the said
sum the first respondent issued the FDR being Annexure P-4 to the petition.
Therefore, in the facts of the instant case there was no disputed facts arose for
adjudication. Thus, the ratio of the said decision has no application in the facts
of the instant case.
44. In the matter of: Smt. Shyama Devi (supra), in the facts of the said case the
depositor was introduced to the bank by one Kapil Deo Shukla who was an
employee of the bank. The said employee of the bank defrauded the depositor
by acting not in due course of his employment or as an agent of the bank. Such
is not the fact of the instant case as discussed above. Thus, the ratio in the
said decision has no application in the facts and circumstances of the instant
case.
45. In the matter of: The Secretary, Naguneri Peace memorial Co-operative Urban
Bank Ltd. Naguneri (supra), in this case the concerned Cooperative Bank denied
that the fixed deposit receipts, as not being issued by the bank neither the
same were signed by the authorized person by the bank and as such those
fixed deposit receipts were bogus and not binding on the bank. Such is not the
fact in the instant case as discussed above. Thus, the ratio in the said decision
has no application in the facts and circumstances of the instant case.
46. In the matter of: N. Sridhar (supra), the judgment was delivered arising out of a
civil suit. The employee of the concerned company was involved in connivance
and fraud preparing forged share transferred deed. Such is not the fact in the
instant case and the respondent bank herein did not contend that, the FDR
was prepared and issued as a result of fraud or that the money was never
received by the bank which was duly transferred by the first petitioner in the
manner and mode indicated by the first respondent. Thus, the ratio of this
decision has no application in the instant case.
47. Satyam Fibres (India) Pvt. Ltd. (supra) there was a serious allegation of fraud at
the threshold. In the instant case, their had been a categoric and unequivocal
admission on the part of the first respondent that the sum was received by it
and the first respondent issued the FDR and the sum would be payable to the
first petitioner on maturity. Thus, the ratio in this case has no application in
the facts of the instant case.
48. The legal argument advanced by the learned Senior Counsel for the writ
petitioners that the act of a servant in course of his usual employment and
discharging its usual functions in course of his employment binds the
employer. The nature of liability is vicarious. As such the act of the Authorized
Officer/Manager of the Selimpur Branch of the first respondent binds the first
respondent in the facts of this case. There is no doubt of such settled legal
proposition. Annexures- P-1, P-3 and P-4 to the writ petitions were duly
issued by the authorized employees of the first respondent in usual course of
business and their employment. The first respondent never raised any dispute
or denied the authority of the said authorized employees. The said documents,
therefore, had a binding force on the first respondent and the first respondent
could not have contended anything to the contrary. Inasmuch as, the first
respondent did not initiated any proceeding or action challenging the said
documents or the transaction in accordance with law.
49. Upto the issuance and existence of the said three documents, namely,
Annexures- P-1, P-3, and P-4 to the writ petition there was no dispute
between the parties, which in my view, were the material facts relevant for
adjudication of the claim in the writ petition for return of the term deposit
proceeds. The facts beyond those three documents and subsequent thereto,
even if they were taken to be disputed by the parties, the same would not have
any material bearing in adjudicating the instant writ petition. The first
respondent was all along the custodian of the said fixed deposit and was a
trustee as such.
50. It is, therefore, clear from the enunciation of law that merely because one of the
parties to the litigation raises a dispute in regard to the facts of the case, the
Court entertaining such petition under Article 226 of the Constitution is always
not bound to relegate the parties to a suit. It is not an absolute bar for a Writ
Court. The State or an instrumentality of the State is obliged in law to act
fairly, justly and reasonably which is the requirement of Article 14 of the
Constitution of India. Therefore, if by the impugned Act and conduct the first
respondent, an instrumentality of the State refused to make over the matured
term deposit proceed which was unequivocally admitted by it to have been
received, as discussed above, the same would amount to an act in
contravention of the aforesaid requirement of Article 14 and this Court has no
hesitation and is of the firm view in holding that, a Writ Court can issue
suitable direction to set right the arbitrary actions of the first respondent.
51. What is disputed as contended by the first respondent was the alleged
appropriation of the proceed by another third party account holder, namely,
Laxmi Enterprise and not the acknowledgment or admission of receipt of the
said sum of Rs. 20 crores from the first petitioner and to return the said
proceed with the agreed rate of interest on maturity. Here the conduct of the
parties would also have a relevant and crucial role to play. Even after the
alleged discovery of fraud as contended by the first respondent, it did not take
any step to resist and dislodge the claim of the petitioners by initiating
appropriate legal proceeding or otherwise in accordance with law and allowed
the said amount to be misappropriated from its custody, for a substantial
period of time. The criminal proceeding already initiated at the instance of the
petitioners might confirm the criminal charges after proper trial against the
accused but would not enable the first petitioner to receive its matured term
deposit proceed, as the scope of a criminal trial is wholly different from the
scope of a civil proceeding.
52. In view of the fore going discussions and reasons, I am of the firm opinion that
the first respondent had illegally, wrongly and arbitrarily withheld the said
matured term deposit proceed of the first petitioner. This was purely a
commercial transaction between the parties. The first respondent should also
pay interest upon the said matured term deposit proceed to the first petitioner
for such wrongful with holding. Contemporaneously when the fixed deposit was
created and was matured and immediately thereafter, the rate of interest was
much higher than what is prevailing now. Balancing the equity between the
parties, this Court directs the first respondent to pay simple interest @ of 5%
per annum since January 25, 2016 on the said matured value of Rs.
26,35,18,454.93/- till the day the said entire proceed with interest as directed
herein would be tendered to the first petitioner and not thereafter.
53. The first respondent must tender and carry out the entire exercise, as directed
above, for return of the said sum of Rs. 26,35,18,453.93/- together with
interest as directed above to the first petitioner within a period of six weeks
from the date of communication of a server copy of this judgment and order to
the Selimpur Branch of the first respondent and/or to any other appropriate
authority as the first petitioner would be informed by the first respondent.
54. On the above terms, this writ petition WPA 19959 of 2014 stands allowed.
55. All connected applications, pending if any, are disposed of.
56. There shall, however, be no order as to costs.
(Aniruddha Roy, J.)
