Delhi High Court
Jammu & Kashmir Bank Ltd. vs State Bank Of India on 31 January, 2011
Author: Indermeet Kaur
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment: 31.01.2011
+ RSA No. 18/2011 & CMs.2062-64/2011
JAMMU & KASHMIR BANK LTD. ...........Appellant
Through: Mr. G.M. Kawoosa, Advocate.
Versus
STATE BANK OF INDIA ..........Respondent
Through: Nemo.
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. (Oral)
1 This appeal has impugned the judgment and decree dated
22.07.2010 which has endorsed the finding of the trial Judge dated
05.09.2007 whereby the suit of the plaintiff i.e. State Bank of India
against the two defendants namely Jammu & Kashmir Bank and
Om Prakash had been decreed. The impugned judgment had
endorsed this finding.
2 Along with the appeal, an application under Section 5 of the
Limitation Act has been filed seeking condonation of delay of 69
days in filing the present appeal.
3 The plaintiff bank had sought recovery of `1,16,537/- along
with interest against the defendants. Contention was that
defendant No. 1 bank had an account of defendant No. 2.
Defendant No. 2 had presented a demand draft dated 08.09.1999
for a sum of `95,000/- drawn on Indra Nagar Bareilly Branch of
State Bank of India for encashment. The said draft when presented
for encashment for realization by defendant No. 1 was honoured as
per the banking practice in good faith. It later on transpired that
the said draft had not been issued by Indra Nagar Branch of State
Bank of India. It was one of the various drafts looted from Parval
Pur Branch, Bihar; it was not a legal instrument. This information
was communicated to defendant No. 1 who in turn informed
defendant No. 2 of the same. Defendant No. 2 was not a bonafide
owner of the draft; the document was a forged document. The
plaintiff had made payment in good faith; both the defendants are
jointly and severely liable to refund this amount to the plaintiff.
Defendant No. 1 was the contesting party; defendant No. 2
had been proceeded ex-parte. On the pleadings of the parties,
following two issues were framed:-
1. Whether the plaintiff is entitled for decree for recovery
of `1,16,537/- against the defendants? OPP
2. Whether the plaintiff is entitled for any interest, if so,
at what rate and on what amount and for which period? OPP
4 Oral and documentary evidence was led. It had come in the
evidence of the witness of the plaintiff that demand draft had been
looted from the State Bank of India, Parval Pur Branch. DW-1 had
proved the Account Opening Form of defendant No. 2 as
Ex. DW-1/D1. He admitted that this account had not been opened
on the introduction of any previous existing account holder; branch
was operational w.e.f. 18.08.1999; account was opened on
31.08.1999. Circular of the RBI was exhibited as document
Ex.DW-1/P2; DW-1 admitted that defendant No. 1 bank had not
adhered to the guidelines of the said circular whereby substantial
withdrawals of money from a saving bank of an account holder has
to be monitored for the first six months; further there was no letter
of thanks on record which could suggest that any letter of thanks
had in fact been sent by defendant No. 2.
5 Provisions of Section 131 of the Negotiable Instruments Act
(hereinafter referred to as ' NI Act') and protection claimed by
defendant No. 1 under the said statutory provision had been
adverted to. It was held that defendant No. 1 was negligent in
opening the account of defendant No. 2 which had facilitated this
fraudulent encashment. He had not adhered to the guidelines of
the RBI in this context and there was clear admission by DW-1 on
this score. The account of defendant No. 2 had not been introduced
from any existing customer. Guidelines No. 79, 81, 83 & 85 of the
RBI had not been adhered to. The protection of Section 131 of the
NI Act was not available to defendant No. 1 bank. The suit of the
plaintiff was accordingly decreed.
6 The appellate court had affirmed this judgment of the trial
court.
7 This is a second appeal. It is yet at the stage of admission.
The substantial questions of law have been formulated at pages
No. 4 & 5 of the body of appeal. They do not in any manner raise
any such substantial question of law. They are fact based. The
averment that in para 42 of the judgment, the trial court had
returned a finding that there was some contributory negligence on
the part of the plaintiff does not find mention anywhere in the said
judgment.
10 No substantial question of law has arisen. Appeal as also
pending applications are dismissed in limine.
INDERMEET KAUR, J.
JANUARY 31, 2011, a
