Inderjeet Singh vs Federal Bank Limited & Ors.
2010 Latest Caselaw 464 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI

                         Order reserved on: 22.1.2010
%                        Order delivered on: 28.1.2010

+               I.A.8027/2009 in CS(OS)1337/2008

        INDERJEET SINGH                                  ......Plaintiff
                                    Through:   Mr.D.K.Rustagi         and
                                               Mr.B.S.Bagga, Advts.
                        Versus

        FEDERAL BANK LIMITED & ORS.          .......Defendants
                          Through: Mr.P.I.Jose and
                                    Mr.B.K.Mishra, Advocates
                                    for D-1 and D-2.
                                    Ms.Anuradha Dutt,
                                    Ms.Vijaylakshmi Menon,
                                    Ms.Divya Kesar,
                                    Mr.Manmohit Puri and
                                    Ms.Aradhana Kaura,
                                    Advocates for D-4

CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

     1. Whether the Reporters of local papers may be allowed to see
        the judgment?

     2. To be referred to the Reporter or not?
                                                                Yes

     3. Whether the judgment should be reported in the Digest?
                                                          Yes

INDERMEET KAUR, J.

I.A.No.8027/2009 (by defendant no.4 under Order 1 Rule 10 (2) r/w Order 7 Rule 11 (a) IPC)

1. This is an application filed by defendant no.4 i.e. Australian

& New Zealand Banking Group Limited having its International

Banking office at 570, Church Street, Richmond Victoria-3121,

Australia, wherein it has been prayed that the name of the said

defendant be deleted from the array of the parties and the plaint

qua him be rejected as no cause of action is made out qua him.

2. Application has been opposed.

3. Present suit is a suit for recovery of Rs.58,26,663/-. The

plaintiff is the proprietor of an export firm i.e. M/s I.J.Exim Inc.

The firm had opened a current account no.10937 with defendant

no.1, a private bank, constituted under Indian Companies Act for

availing inland credit of limit along with a bank guarantee limit

providing for the facility of purchasing of invoices raised against

each export.

4. Defendant no.1 bank had dedicated the job of its emergent

banking requirement to a special department namely the

International Banking Department which has been impleaded

herein as defendant no.2.

5. Defendant no.3 is the Reserve Bank of India responsible for

the supervision of national and international banking activity.

6. Defendant no.4 is the drawer's bank/drawee of a cheque

no.0010128 dated 28.7.2005 for Australian dollars 75000 issued

from its account no.013:915:3479:68635 in the name of M/s

Hemmi Import Export.

7. M/s J.P.Morgan Chase Bank N.A. Sydney had been engaged

by defendants no. 1 and 2 to collect this cheque from defendant

no.4. This cheque was dishonored by defendant no.4 on 16.8.2005

as the account of M/s Hemmi Import Export stood closed on

8.8.2005. Defendant no.4 informed M/s J.P.Morgan Chase Bank

N.A. Sydney about the same who in turn disclosed this fact to

defendant no.1

8. In the plaint it is stated that on 21.5.2006 the plaintiff for the

first time came to know that the aforesaid cheque which was

presented on 2.8.2005 had been dishonored due to closure of the

account. It has been averred that in the era of electronic mails, it

is ill conceivable that the information available to defendant no.2

to 4 of the return of cheque due to closure of the account was

made available to the plaintiff only on 21.5.2006 i.e. after a period

of nine months which is an unexplainable delay. The prompt

liability of not adhering to the deadline initially of 15 days

extendable up to 60 days has resulted in losses having been

suffered by the plaintiff.

9. It is further stated that the plaintiff firm had not received

any information from defendants no.2 to 4 that the credit given to

his account on 28.9.2005 was reversible; on 21.5.2006 the said

credit which had been given to the plaintiff by defendant bank was

illegally reversed without any cause. Defendant no.3 remained a

silent spectator; proceedings before the Consumer Forum had also

been initiated. Plaintiff has claimed damages for the loss suffered

by him.

10. A prayer for decree of mandatory injunction has been made

against defendant no.3 mandating him to hold an enquiry against

defendant no.1 and 2. Second prayer is a prayer for decree of

Rs.58,26,663/- along with pendentelite interest @ 18% in favour of

the plaintiff and against all other defendants co-jointly.

11. From the plaint it is evident that the role assigned to

defendant no.4 is only that of a drawer's bank/drawee. The

defendant no.4 bank was holding the account of Hemmi Import

Export; the disputed cheque had been returned as dishonored on

16.8.2005 as the account of Hemmi Import Export stood closed.

Transactions were between the plaintiff and defendant no.1; the

said cheque had been forwarded by the plaintiff to defendant no.1

on 2.8.2005 for collection. This instrument had been sent by

defendants no.1 and 2 to M/s J.P. Morgan Chase Bank N.A.

Sydney, being an agent of defendant no.1 and 2 who had

presented this cheque for payment to defendant no.4. Cheque was

dishonored; information to this effect had been given by

defendants no.2 to 4 to the plaintiff belatedly and after an

inordinate delay i.e. on 21.5.2006. There is no other specific

averment against defendant no.4 in the entire body of the plaint.

12. In the written statement filed by defendant no.1 and 2 they

have admitted that the intimation of the dishonor of the cheque

was conveyed to him through an authenticated swift message

which is valid as per banking practice and procedure; however,

due to electrical error this fact of dishonor was intimated by

defendant no.1 branch to the plaintiff after some delay. It is

further admitted that this swift message is dated 18.8.2005 but the

concerned officer while making the entry on the basis of this swift

message had given a wrong credit to the plaintiff.

13. From these averments which are made in the plaint and the

subsequent written statement of defendant no.1 it is amply borne

out that a cheque dated 2.8.2005 had been presented by the

plaintiff to defendant no.1 for collection; defendant no.1 had

handedover this cheque to M/s J.P.Morgan Chase Bank N.A.

Sydney who had presented it to defendant no.4. The said cheque

stood dishonored on 16.8.2005 as the account of M/s Himmi

Import Export stood closed on 8.8.2005. This was communicated

by a swift message by defendant no.4 to M/s J.P.Morgan Chase

Bank N.A. Sydney on 17.8.2005 and the same was in turn

communicated by M/s J.P.Morgan Chase Bank N.A. Sydney to

defendant no.1 on 18.8.2005 itself. There was no delay on the

party of defendant no.4 in communicating this fact of the dishonor

of the said cheque. His duty was to intimate M/s J.P.Morgan

Chase Bank N.A.Sydney who was informed on 17.8.2005.

14. Admittedly, while deciding an application under Order 7

Rule 11 of the CPC the averments which are made in the plaint

alone have to be considered. From the reading of the plaint it is

clear that the plaintiff had no privity of contract with defendant

no.4. Plaintiff had presented this cheque to defendant no.1 who in

turn chose to present it to M/s J.P.Morgan Chase Bank N.A.

Sydney (not a party to the suit) who in turn had presented it

defendant no.4 for the purposes of collection; role ascribed to

defendant no.4 was as the drawee of the said cheque.

15. In the written statement of defendant no.1 and 2 they have

admitted that they have received the swift message from M/s

J.P.Morgan Chase Bank N.A. Sydney on 18.8.2005 that the cheque

stood dishonored on 16.8.2005 by defendant no.4; this information

was passed on to the plaintiff, although belatedly for a technical

default on their part. This admission of defendants no.1 and 2

absolves defendant no.4 from any liability as defendant no.1 and 2

have admitted that the information of the dishonor of the cheque

had been received by them on 18.8.2005 from M/s J.P.Morgan

Chase Bank N.A. Sydney who in turn had received this information

from defendant no.4 on 17.8.2005.

16. In these circumstances, the prayer made in the application

under Order 1 Rule 10 of the CPC deserves to be allowed.

17. While considering the application under Order 7 Rule 11 of

the CPC the court is not required to take into consideration the

defence set up by the defendants in his written statement; it is

only the averments made in the plaint which have to be seen. At

the same time, this court has time and again held that on a reading

of the plaint, a clear right to sue must be disclosed; clever drafting

which creates the illusion of a cause of action should be nipped in

the bid at the first hearing.

18. In I.T.C.Limited versus Debts Recovery Appellate Tribunal

and others AIR 1998 SC 634; while relying upon T. Arivandandam

vs. T.V.Satyapal and Another (1977) 4 SCC 467 this view had been

reiterated by the Supreme Court; there must be a real cause of

action disclosed in the plaint and not a mere illusion with a view to

get out of Order 7 Rule 11 of the CPC.

19. In Shakti Sugars vs. Union of India AIR 1981 Del. 212, it has

been held that a partial rejection of the plaint against some of the

defendants is not barred.

20. In Jain Narain N. Sadh Shadwara vs. Pan American World

Airways and Others 30 (1986) DLT 497, a coordinate bench of this

court has held that the provisions of Order 1 Rule 10 (2) of the

CPC can be exercised at any stage of the proceedings; the

question for determination is whether the party was improperly

joined as a plaintiff or defendant; if the court concludes that such a

party was improper, name of the party can be struck out; the party

introduced to a litigation who has no connection with the relief

claimed in the plaint is neither a necessary nor a proper party, his

name can be struck out under this rule.

21. A co-joint reading of the law as enunciated above leads this

court to draw the conclusion that no real cause of action has been

disclosed qua defendant no.4 in the plaint. Cause of action is

illusory and imaginary; a meaningful (and not a formal reading of

the plaint) does not disclose any cause of action qua him; a clear

right to sue is not founded on this plaint.

22. The defence of the defendant no.1 as disclosed in their

written statement substantiates the arguments of the learned

counsel for the applicant for the prayer sought for under the

provisions of Order 1 Rule 10 of the CPC. Defendant no.4 is

neither a necessary and nor a proper party; this is specially so in

view of the admitted position that defendant no.4 had informed

M/s J.P.Morgan Chase Bank N.A. Sydney on 17.8.2005 itself that

the said cheque stood dishonored which in turn had been

communicated by a swift message dated 18.8.2005 to defendant

no.1.

23. The prayers made in the application are allowed. The plaint

qua defendant no.4 stands rejected; he is ordered to be deleted

from the array of the parties. Amended memo of parties be filed

within one week.

(INDERMEET KAUR) JUDGE

JANUARY 28, 2010.

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