State Bank Of India vs National Open School Society, ...
2004 Latest Caselaw 250 Del

JUDGMENT

Vijender Jain, J.

1. This appeal has been filed by the appellant aggrieved by the finding of the trial court. Respondent filed a suit for recovery of Rs.2,85,970.30. The respondent, inter alia, pleaded in the plaint that respondent was authorised to collect fees deposited by the students and according to the respondents a bank account was opened with SBI main branch of the appellant and another account was open in Greater Kailash, Part-I branch of appellant. It was pleaded in the suit that in the account of the respondent the fee and other charges of the students by various institutions were deposited and the respondent was utilising the amounts which were credited in the said account. The respondent also averred in the plaint that at no time they executed any document seeking any overdraft facility from the appellant bank. The respondent had to file a suit on account of the mistake of the appellant's officials as an amount in excess of Rs.22.23 lakhs was shown in the account of the respondents in August, 1993. The closing balance in the account of the respondent as on 31st August, 1993 was Rs.119.80 lakhs. However, on account of the error on the part of the appellant's officials the said balance was shown as Rs.142.63 lakhs. The error was detected by the officials of the respondent on 9th September, 1994 and communicated to the respondent. It is the stand of the respondent that immediately when it was brought to the notice of the respondent that extra amount was credited in the account of the respondent, the extra amount of Rs.13,62,070/- was paid by the respondent to appellant. In spite of making prompt payment by the respondent, the appellant was not satisfied. The appellant demanded interest from the respondent amounting to Rs.1,91,094/-, treating the extra amount as overdraft to the respondent. As a matter of fact, the high-handedness of the appellant was writ large on the record instead of demanding the said amount, said amount was debited from the account of the respondent in the Greater Kailash branch of the appellant even without giving any notice to the respondent. As the appellant has debited the amount from the account of the respondent in the Greater Kailash Branch and this amount was illegally debited by the appellant, the plaintiff filed the suit claiming the said amount as well as interest thereon.

2. The appellant bank took the plea that under Section 72 of the Contract Act, they were entitled for interest on the said amount as the respondent has used the excess amount deposited in their account, the respondent must pay interest on the said amount. On the pleadings of the parties, the following issues were framed :-

(i) Whether the plaintiff is entitled to the recovery of the amount as prayed? OPP

(ii) Whether the plaintiff is entitled for the recovery of interest, if so, at what rate? OPP

(iii) Whether the defendant could debit the said amount as per provisions of Section 72 of Indian Contract Act and other laws as mentioned in the preliminary objection no.11? OPD

(iv) Relief.

3. The learned trial court discussed issues (i) and (iii) together. We find no infirmity with the finding of the trial court. It is the duty of the bank to maintain correct account because maintenance of account is in the domain of the bank. Account holder cannot be held responsible for the mistake which has been committed by the officials of the bank. It is the duty of the bank to reconcile and give true statement of account to the account holder. That duty cannot be shifted to the account holder when the account holder has not availed of any benefit either in terms of overdraft facilities or loan facilities, it was a mistake on the part of the officials of the appellant who have credited more amount in the account of the respondent. Respondent cannot be held responsible for payment of interest, that is the only issue which has been agitated in this appeal before us. In support of his argument, counsel for the appellant placed reliance on a judgment of Karnataka High Court in the case of S.Kotrabasappa Vs. The Indian Bank .

4. The reliance placed on S. Kotrabasappa's case (supra) is totally out of context as in the said case, it was the bank who had filed a suit against the account holder. While here it is a case where suit has been filed by the respondent for the unauthorised act done by the appellant bank. For the mistake of appellant's officials, an account holder cannot be penalised firstly on account of making payment on account of interest and secondly the action of the appellant in debiting the account of the appellant at Greater Kailash branch was illegal. The banks maintain the accounts of the consumers in trust. Had it been a case of deposit with a non-banking institution or a private individual and the amount of such a depositor would have been debited by such private financial institution or a person, that person could be hauled up for an offence like breach of trust, misappropriate and other criminal actions. By said action, the bank has committed the same offence. It was a mistake committed by the officials of the appellant for which the appellant ought to have taken action against such officials. The appellant bank had no authority to automatically debit another account of the account holder, i.e. the respondent. At no point of time the respondent can be said to have taken any overdraft facilities.

5. We find no force in the contention of the appellant that as the money was utilised by the respondent, the respondent was liable to pay interest. There was nothing on record before the trial court to suggest that at any time the respondent has requested for any overdraft facilities. Without the consent of the account holder, entries of credit were wrongly made in the account of the holder by the appellant bank, therefore, the appellant bank is not entitled to claim interest on such wrongful entries.

6. There is nothing on record to show that impliedly any consent was granted by the respondent. It is the admitted case of the parties that mistake was committed by the officials of the bank wrong credit was made in the account of the respondent. The bank is under a legal obligation of the account holder to inform him of the true state of account and there is no duty on the respondent to reconcile its account regularly. It is not for the account holder to discover the mistake committed by the bank. If the mistake was not discovered in time, it is the appellant bank who did not perform its statutory duty. As a matter of fact, in the impugned judgment the learned trial court has discussed that it was the officials of the appellant who had discovered the mistake on 9th September, 1994 and when the same was communicated to the respondent, they prepared a cheque on 18th October, 1994 and in view of the fact that the trial court had already allowed the appellant to recover interest on the excess amount credited in the account of the respondent and on that score Rs.25,526/- being excessive interest credited to the respondent's saving bank account on the excess amount has already been paid by the respondent. The demand of the respondent for interest on excessive balance for the fault of appellant cannot be granted and the same was rightly rejected by the trial court.

7. In a suit filed by the respondent, the appellant cannot claim interest as a matter of right. No merit in this appeal. Same is dismissed with costs throughout.