Shri Rajesh Jaina & Ors vs Shri Tapesh Jain & Ors.
2011 Latest Caselaw 1649 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                              Date of Judgment: 23.3.2011


+                        RSA No.111/2009



SHRI RAJESH JAINA & ORS. ...........Appellants.
                    Through: Mr.Rajesh Aggarwal, Advocate.

                   Versus

SHRI TAPESH JAIN & ORS.              ..........Respondents.
                   Through:          Mr.S.A.Khan, Advocate.

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

13.4.2009 which had modified the finding of the trial judge dated

28.4.2006. Vide the judgment and decree dated 28.4.2006 the suit

filed by the plaintiffs seeking recovery of Rs.98,880/- against the

four defendants had been decreed against the defendant no.1

alone. The suit qua other defendants had stood dismissed. Appeal

had been filed before the first appellate court. Vide the impugned

judgment the suit stood dismissed against all the four defendants.

2. This is a second appeal. The substantial questions of law

have been embodied on page 3 of the body of the appeal. On

behalf of the appellant, it has been submitted that Section 10 of the

Negotiable Instruments Act, 1881 defines "payment in due course".

Section 10 of the Negotiable Instruments Act, 1881 is extracted

hereinbelow:

"10. "Payment in due course"- "Payment in due course": means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned."

As per this provision "payment in due course" means

payment in accordance with the tenor of the instrument. Such a

payment has to be made in good faith and without any negligence.

It is pointed out that this has not been adverted to by the

defendant no.4. Defendant no.4 had opened a bank account and in

collusion with other defendants allowed defendant no.1 to

misappropriate the money of the plaintiff; defendant no.2 was an

account holder who had been introduced by defendant no.3; both

persons were non-existent. The bank did not act in good faith. He

was guilty of negligence. The impugned judgment dismissing the

claim of the plaintiff against defendant no.4 as also other

defendants is an illegality and is liable to be set aside.

3. The case of the plaintiff is that defendant no.1 is his

employee. By virtue of this job, plaintiff had entrusted defendant

no.1 for looking after his banking transactions. Cheques dated

23.4.1986 for Rs.12,835/- had been contrived by defendant no.1 in

connivance with defendants no.2 and 3 and a fake bank account in

the name of M/s Jain & Company, a non-existent person, was

opened; pay order in the sum of Rs.12,825/- was procured and this

money was thereafter withdrawn fraudulently and deceitfully.

Other sums of Rs.16,674/-, Rs.18,500/- Rs.13,810/- and Rs.6,318/-

were also misappropriated in the aforenoted fashion. Defendants

were accordingly liable for repayment of the said accounts which

were due to the plaintiff.

4 Defendants no.1 to 3 were ex parte; they did not even filed

written statement. Defendant no.4 was the only contesting

defendant. He had denied negligence or lack of good faith on his

part.

5. On the pleadings of the parties three issues had been framed

by the trial judge; they read as follows:

"1.Whether the plaintiff is entitled to the decree of Rs.98,880/- as prayed for? OPP

2. Whether the plaintiff is entitled to the interest, if yes, at what rate and for what period? OPP

3. Relief."

6. One witness was examined on behalf of the plaintiff and one

witness was examined by defendant no.4. Testimony of these

witnesses clearly show that no case is made out in favour of the

plaintiff. PW-1 had averred that defendant no.1 had

misappropriated the aforenoted amount in connivance with

defendants no.2 and 3 and the officials of the defendant no.4; he

had written a letter to defendant no.4 on 02.12.1987 to bring this

fact of fraud to light but no action was taken. In his cross-

examination he admitted that before December 1987 he did not

write any letter to defendant no.4. This information that there was

a fake account in the name of M/s Jain & Company had been given

to him by his Chartered Accountant. This was the sum total of the

allegations leveled against the defendants; no particulars or details

has been given. Transactions were admittedly of the year 1986;

defendant no.4 was informed of this fraud only in December 1987;

no criminal complaint or criminal action had also been taken. The

notice dated 02.12.1987 purported to have been sent by defendant

no.4 had also not been proved; it was only marked. DW-1 had

proved the account opening form Ex.DW-1/1 in the name of M/s

Jain & Co.; it is pointed out that this document on the face of it

shows that it has not been signed and verified by a duly authorized

person; it does not contain the photograph of the applicant. The

cross-examination of DW-1 shows that not a single question has

been put to this witness qua this submission. Not even a single

suggestion has been given to DW-1 that this document is not as per

the rules and procedures of banking practice or that this account

opening form has not followed the banking rules. It was in these

circumstances that the impugned judgment had noted that no case

is made out in favour of the plaintiff. Impugned judgment has also

noted that the plaintiff has failed to produce any documentary

evidence to show that the defendant no.1 was his employee. There

is no doubt that the defendants no.1 to 3 were ex parte but the

plaintiff himself must stand on its own legs. It must prove its case

before a decree can follow in his favour. No issue had also been

framed qua the negligence of the bank or that the bank had not

acted in good faith in allowing the aforenoted transaction. Both

the fact finding courts have already returned their findings against

the appellant. This court is not a third fact finding court. It cannot

go into the submissions now urged before this court. No

substantial question of law has arisen.

7. Appeal is dismissed in limine.

INDERMEET KAUR, J.

MARCH 23, 2011 nandan