Koshi Punjabi vs Bank Of Baroda And Anr.
2007 Latest Caselaw 1913 Del

JUDGMENT

Hima Kohli, J.

1. The present petition is filed by the petitioner praying inter alia for directions to the respondent bank to reverse the debit of a sum of Rs. 17,110/- made in the savings bank account of the petitioner in August, 2001, without any authority from the petitioner and to direct the respondent to refund the said amount Along with interest thereon.

2. Briefly stated, the facts of the case are that the petitioner was an employee of the respondent, a public sector bank (hereinafter referred to as 'the respondent bank') and was last working as an officer with the said bank, before she took voluntary retirement and was relieved from the employment of respondent bank on 31.3.2001. Prior to taking voluntary retirement, the petitioner submitted an application to the respondent bank on 8.12.2000, for grant of privilege leave for a period of 12 days i.e. from 26.12.2000 to 6.1.2001. However, the request made for privilege leave was refused by the respondent bank by making the following observations:

Mr. Pahwa and Mr. Datwani are on leave and Mrs. Indira going on training during this period. Leave may be regretted on a/c of exigencies & write to R.O. for accumulation

3. As per the leave rules of the respondent bank, privilege leave could be accumulated up to not more than 240 days except where leave had been applied for and it had been refused. As the privilege leave of the petitioner was refused by the respondent bank on account of exigencies, the respondent No. 2 branch of the bank in which the petitioner was working, applied to the Regional Office for accumulation of leave beyond 240 days. The said request was, however rejected by the Regional Office vide its letter dated 29.12.2000. In the meantime, the application of the petitioner for voluntary retirement was processed and she was relieved from the employment of the respondent bank on 31.3.2001 and the matter rested there.

4. After a gap of about eight months thereafter, one fine morning on 18.8.2001, the petitioner discovered that the respondent bank had recovered a sum of Rs. 17,110/- from her savings account maintained with it. On making enquiries, she was informed by the respondent bank that the said recovery had been made on the ground of adjustment of purported excess payment made to her on account of wrong calculation of privilege leave and encashment thereof at the time of granting voluntary retirement to the petitioner. Aggrieved by the aforesaid action, the petitioner made a representation to the bank requesting that her case be reconsidered and the amount deducted be credited to her account. However, repeated protests made by the petitioner did not elicit any response till 4/6.2.2003, on which date, the respondent bank rejected her representation on the ground that the action of the bank in recovering the excess payment on account of wrong calculation of privilege leave and encashment at the time of voluntary retirement of the petitioner was in order and that merely regretting grant of privilege leave does not amount to authorizing accumulation. Aggrieved by the aforesaid action of the respondent in debiting a sum of Rs. 17,110/- unilaterally in her savings bank account maintained with the respondent bank, the present writ petition has been filed by the petitioner.

5. Counsel for the respondent bank opposes the writ petition on the ground that the petitioner has not sought the equally efficacious alternative remedy as may be available to her, by filing a suit for claiming recovery. On merits, it is stated that credit of the accumulated leave was posted by the branch in which the petitioner was working, in January, 2001 inadvertently and that during the course of audit of records of the payments made to the voluntary retirees, it was found by the inspecting officer that 25 days of encashment of privilege leave was allowed to the petitioner in excess of her entitlement. Accordingly, an amount of Rs. 17,110/- was debited on 17.8.2001, from the savings account of the petitioner towards excess encashment of privilege leave allowed to her.

6. The facts of case are undisputed. The only issue which this Court is required to address is as to whether the respondent bank was justified in unilaterally debiting a sum of Rs. 17,110/- from the savings bank account of the petitioner maintained with it, without following the due process of law. It is settled law that whenever any rights or benefit in the nature of redesignation in higher pay, posts, increments, wrong fixation of pay, excess payment of pay and allowances etc. are acquired, granted or get accrued, it is impermissible for the concerned authority to reverse such decisions or recover amounts without issuing proper notice and granting opportunity of hearing to the adversely affected employees. Thus, a notice to show cause or at least some opportunity of hearing ought to have been granted by the respondent bank to the petitioner. In the present case, as is obvious from the record, no such opportunity was ever granted to the petitioner. The respondent bank has violated the principles of natural justice and deprived the petitioner of her valuable right of being afforded an opportunity of hearing.

7. The stand as taken by the respondent bank in its counter affidavit shows that within the department there was some error/ mistake on the part of the branch office of the respondent bank, which was discovered after the petitioner had taken voluntary retirement. In such circumstances, the respondent bank was under an obligation to intimate the petitioner about the said error/mistake that had occurred on its part while settling her account at the time of granting voluntary retirement to her. Instead, the respondent bank threw the entire procedure to the winds, or rather, short-circuited the same by directly debiting the purported excess amount towards encashment of privilege leave for a sum of Rs. 17,110/- in the savings account of the petitioner maintained with it.

8. It needs to be emphasised that a bank is nothing more than a custodian of the funds of an account holder. It is the duty of a bank to maintain an account of an account holder as per his/her instructions. The respondent bank can claim no lien over the funds lying in such an account unless contracted otherwise with an account holder. In the present case, the action of the respondent bank in unilaterally debiting the amount in question in the savings account of the petitioner cannot be held to be a legal withdrawal by the bank as it was done without seeking the permission of the account holder. The said action of the respondent is on the face of it, unauthorised and smacks of arbitrariness and illegality. The respondent bank had no authority to unilaterally debit the account of the petitioner merely because there was a mistake committed by the officials of the respondent bank while calculating encashment of privilege leave.

9. Thus, the petitioner cannot be penalized for a mistake committed by the officers of the respondent bank and the action of the respondent bank in debiting the account of the petitioner maintained with it, is grossly illegal. In fact, such an action is nothing short of an offence of a criminal breach of trust and amounts to misappropriation of funds and other criminal actions for which the respondent bank could be hauled up. In this regard, it would be useful to refer to a decision of the Gujarat High Court in the case of Naranbhai Govindbhai Patel v. District Development Officer reported as 2003 (III) CLR 779 wherein it was observed as under:

13. Now, the next question is whether such an orders could be passed by the respondent after the petitioner retired on 31.1.1998 or not. This question has recently been examined by the Rajasthan High court in the matter of Narain Lal v. State of Rajasthan and Ors. reported in 2003 II CLR 1018. It was a matter relating to recovery of the amount wrongly paid. The petitioner therein retired employee challenged recovery of the amount wrongly paid to him without any fault on his part. In view of such facts, it was held by the Rajasthan High Court that the payments wrongly made without any fault on the part of the employee, having retired, recovery from him will cause legal injury. It has also been held that a legal right has accrued to him and, therefore, after his retirement, no recovery can be ordered against the retired employee. In the said matter, the Rajasthan High Court has considered entire case law on this subject in para 9 to 15 and has observed as under in para 16, 17, 18 and 19:

16. Thus, from the rulings of the Honourable Supreme Court as well as this Court just quoted above, it is clear that in case the court finds that any benefit was achieved by a person without there being any fault on his part in receiving such benefit, it would be just and proper to allow him to retain such benefit.

17. In the present case, the benefit of Rule 26-A of the RSR was given to the petitioner and such benefit was received by the petitioner without there being any fault on his part, but mistake was committed by the respondents and, therefore, in such circumstances, it would be just and proper to allow the petitioner to retain such benefits.

18. Apart from this, when the person to whom payment was wrongly made without there being any fault on his part and that person has retired, in such a case, after his retirement, to ask such person to pay amount already received would necessarily causes a legal injury to him as in the meanwhile he would have utilized that amount and, therefore, from this point of view also, it can easily be said that a legal right has accrued in favor of the petitioner and under Article 226 of the Constitution of India, this Court has power to grant consequential relief such as not to recover the amount from the person to whom it was wrongly paid without there being any fault on his part.

19. Thus, the above question formulated by this Court is answered in the manner that the amount paid to the petitioner wrongly on his fixation after giving him benefit of Rule 26 of the RSR without any fault on the part of the petitioner cannot be permitted to be recovered from him.

10. The aforesaid question was also considered by the Punjab & Haryana High Court in the case of Ganesha Basti, Bhatinda v. State of Punjab and Ors. reported as 2003 Lab. I.C. 1029, wherein the court after taking into consideration a decision rendered by the Supreme Court in the case of Sahib Ram v. State of Haryana reported as 1995 AIR SCW 1780 observed as under:

The recovery is sought to be effected without complying with the principles of natural justice and giving an opportunity of hearing. The recovery could be set aside on this short ground alone. However, we have gone through the order to find out the justification in passing the impugned order. The pay of the petitioner was stepped up by the respondents without any misrepresentation on the part of the petitioner. Learned Counsel for the petitioner has relied upon Sahib Ram v. State of Haryana 1995 (1) SCT 668 : 1995 AIR SCW 1780 to contend that the recovery cannot be effected if there is no misrepresentation on the part of the petitioner.

11. In the facts of the present case also, the respondent bank is not entitled to recover any amount from the petitioner in the manner adopted by it, more so, when it is not the case of the respondent bank that encashment of privilege leave was allowed to the petitioner in excess of her entitlement on the basis of any fraud or misrepresentation made by her. On the contrary, the boot is on the other leg. It is the stand of the respondent bank that a mistake of calculation was made by its officers while settling the application of voluntary retirement made by the petitioner. The petitioner cannot be faulted in receiving the benefits of encashment of privilege leave in such circumstances. It is not a case of illegal retention of purported excess amounts on the part of the petitioner, but a case of illegal adjustment made by the respondent bank from the savings bank account of the petitioner maintained with it, without following the due process of law. Such an action on the part of the respondent bank is not only unjustified and arbitrary, but one that shakes the very foundation of the relationship of a customer with the bank, which is based on trust and good faith.

12. For the aforesaid reasons, the writ petition is allowed. The respondent bank is directed to immediately refund the amount of Rs. 17,110/- debited from the saving bank account maintained by the petitioner with it on 17.8.2001, with interest payable @ 9% p.a., from 17.8.2001 till the said amount is realized by the petitioner, along with costs of Rs. 5,000/- imposed on the respondent bank.