J Parihar Interior Consultants ... vs State Bank Of Idnia
2021 Latest Caselaw 7886 Guj

     C/SCA/6182/2021                              ORDER DATED: 07/07/2021




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 6182 of 2021

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         J PARIHAR INTERIOR CONSULTANTS PRIVATE LIMITED
                              Versus
                       STATE BANK OF INDIA
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Appearance:
MR ASHUTOSH S DAVE(8865) for the Petitioner(s) No. 1
MR JYOTINDRASINH J VALA(10975) for the Petitioner(s) No. 1
for the Respondent(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI

                            Date : 07/07/2021

                              ORAL ORDER

1. By way of this petition under Article 226 of the Constitution of India, the petitioner company has prayed for the following reliefs :-

"A. Direct the Respondent Bank to forthwith release the funds lying in the FDRs at ANNEXURE A in the favor of the Petitioner by issuing the Pay Order/Demand Draft in the name of the Petitioner or by crediting the bank account of the Petitioner maintained with any other Commercial/Scheduled Bank by way of the banking channel recognized by the Reserve Bank of India;

B. Pending admission, hearing and final disposal of the present petition, the Hon'ble Court be pleased to direct the Respondent Bank not to transfer/alienate the monies lying in the impugned FDRs i. .e. the principal amount and the interest to anyone without the leave of the Hon'ble Court;

C. Further be pleased to direct the Respondent Bank to pay to the Petitioner an interest at the rate of 12% per annum as a compensation of the financial loss from the date of creation of the respective FDRs i. e. from 26.12.2016 and 29.12.2016 till its realization;

       C/SCA/6182/2021                                   ORDER DATED: 07/07/2021



               D.          Any other and further relief deemed just

and proper that the Hon'ble Court deems fit to be granted in the interest of justice;

E. To provide cost for the petition."

2. The case of the petitioner is that the petitioner company is rendering consultancy services with respect to interior designing for the commercial as well as residential establishments and their services are not limited to interior designing only, but stretches to landscape designing, garden planning and other architectural services also. In furtherance of this, the petitioner company had chosen the respondent Bank as its banker and maintained the current account with it right from the year 2007. In order to gauge its additional financial requirements, the petitioner company had chosen to seek an overdraft facility by opening overdraft account No. 32660431267 with the respondent Bank. All necessary formalities had been complied with as per the guidelines of Reserve Bank of India including K. Y. C. (Know Your Customer).

2.1 It is further the case of the petitioner that it had adopted the practice to request the respondent Bank to create Fixed Deposit Receipts that in turn would be utilized to secure the bank guarantee and for carrying out such process, the petitioner company passed a board resolution empowering the directors/employees of the company to ply such deposits. For dealing in the aforesaid FDRs, the company had given an authority in two of the directors and one employee known as Mr. Bhupendra Mafatlal Panchal vide its resolution dated 08.02.2013 and as per the policy of the petitioner company, the fresh board resolution for the funds to be parked in the FDRs was also passed. The petitioner has further asserted that the said Bhupendra Panchal, an employee of the company, was looking after the clerical and other

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miscellaneous work of the company right from the year 2012 and he, according to the petitioner, executed a deed with the petitioner in the year 2009, by which, his share in the profit was determined in the projects in which he will be devoting his contribution, but for that, partnership arrangement was not registered before the Registrar of Firms. Somewhere in the year 2015, said Mr. Panchal started lodging false and unjustified claim with the petitioner company which created a loss of confidence and then, the fraudulent tactics of defalcation of funds in the company including passing of forged board resolution of the company. In the process, Mr. Panchal, in order to gain access to overdraft account No. 32660431267, unauthorizedly added his name and signature in the mandate on 26.10.2016 with the aid and assistance of the Branch Manager of the respondent Bank and surreptitiously, during the demonetization period which commenced from 08.11.2016 to 31.12.2016, without the knowledge of the directors of the petitioner company, deceptively used the blank cheque of overdraft account and created two FDRs, whereof one of Rs. 65 Lacs on 26.12.2016 and another of Rs.51 Lacs on 29.12.2016 in the joint name of the company and Bhupendra Mafatlal Panchal for which no board resolution was passed. No sooner, this misappropriation committed by Mr. Panchal came to the knowledge of the company, with immediate effect, the respondent Bank was approached by the company by representations dated 10.01.2017 and 11.01.2017 respectively, requesting to release the amounts in favour of the company which were fraudulently invested by said Mr. Panchal in FDRs.

2.2 It is the case of the petitioner that on 07.02.2017, an application was also filed before the respondent Bank to close down the account and then, through the advocate, the petitioner

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company got issued notice to the respondent Bank narrating the entire sequence of events and the fraud being committed by Mr. Panchal in connivance with the erstwhile Branch Manager of the Bank. The said notice was followed by public notice as well on 05.01.2017.

2.3 It is further the case of the petitioner that being aggrieved and dissatisfied with the conduct of the Bank since no attention was paid, the petitioner on 24.02.2017, lodged a complaint before the Banking Ombudsman, raising a grievance against the respondent Bank, but the said authority i. e. Banking Ombudsman rejected the complaint of the petitioner company vide order dated 04.05.2017. However, while disposing of the same, it was observed that the FDRs were opened due to some procedural lapse on the part of the respondent Bank.

2.4 It is further the case of the petitioner that in the interregnum period, when the proceedings were pending before the Banking Ombudsman, on 13.04.2017, the Bank wrote to the petitioner that the amount lying in FDRs as indicated above would only be released once all the parties i. e. the petitioner and said Mr. Panchal would make a joint request for its closure. On 15.05.2017, the petitioner even lodged a complaint before the Commissioner of Police, City of Surat against Mr. Panchal as well as against In-charge Branch Manager of the respondent Bank, but later on, after putting the rigorous efforts, ultimately, the respondent Bank closed down the overdraft account on 30.05.2017. At this stage, it is mentioned by the petitioner that the respondent Bank closed the account despite no objection was received by the Bank from Mr. Panchal.

       C/SCA/6182/2021                              ORDER DATED: 07/07/2021




2.5             According to the petitioner, said Mr. Panchal had filed a

Special Civil Suit on 04.09.2017 before the Civil Court in the form of Special Civil Suit No. 329 of 2017 and vexatious litigation is generated by Mr. Panchal. On 11.01.2018, an application under Order VII Rule 11(d) was filed at Exh.17 to dismiss the suit, but the same was not entertained. Though the respondent Bank was not a party to the civil proceedings, the request of the petitioner came to be rejected on 21.11.2017 and despite the fact the Bank has admitted the mistake which has been committed in creating FDRs as stated above, no request is considered in proper perspective.

2.6 The said request was turned down on account of the summon having been received of the suit proceedings which were initiated by Mr. Panchal as stated above. On two occasions, the petitioner informed the Bank that the suit proceedings has nothing to do with the present controversy and in fact, the amount had gone from the account of the company and as such, simply because the summon came to be issued, the request might not have been rejected. Pursuant to the complaint which was lodged by the petitioner before the Police Commissioner, Surat, an FIR was also lodged on 07.03.2018 at City Police, Umra against Mr. Himanshu Bhatt, Branch Manager of the respondent Bank and Mr. Bhupendra Panchal who created the FDRs and the said FIR was registered for the offence under Sections 406, 409, 420, 465, 467, 468, 471 and 120B of the Indian Penal Code. Against the said FIR, Mr. Panchal preferred a petition being Criminal Misc. Application No. 5906 of 2018 before this Court on 13.03.2018 for seeking quashment of the said FIR in exercise of power under Section 482 of the Code of Criminal Procedure, in which, the Hon'ble Court granted ad-interim relief on 19.03.2018. On the same lines, Mr. Himanshu Bhatt, Branch Manager of the Bank had also preferred Criminal Misc. Application No. 8187 of 2018, but no relief had been granted to

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Mr. Bhatt. In the said proceedings, Mr. Bhatt stated that upon oral request of Mr. Panchal, FRDs were booked at the relevant point of time on 26.12.2016 and 29.12.2016 respectively. Later on, in the civil proceedings, learned Civil Court on 30.06.2018 was pleased to allow the application under Order VII Rule 11(d) of Civil Procedure Code and the suit came to be dismissed which was filed by Mr. Panchal, against which, Civil Revision being Civil Revision Application No. 430 Of 2018 was filed which was later on withdrawn on 23.07.2018. Subsequently, Mr. Panchal had filed the first appeal being First Appeal No. 2983 of 2018 and by virtue of judgment and order dated 12.03.2021, the appeal came to be allowed by restoring back the plaint to its original file. Simultaneously, the complaint also came to be filed before the Consumer Forum, Surat against the respondent Bank which came to be dismissed on 14.11.2019. However, it has been stated by the petitioner that the said complaint had nothing to do with the FIR in question. However, taking the aforesaid circumstances in mind, the respondent Bank is taking advantage by not considering the request of the petitioner in view of pendency of the proceedings before the Civil Court as well as pendency of criminal proceedings and as such, the Bank had issued communication on 29.08.2020 and 31.08.2020 which has constrained the petitioner to approach this Court for seeking the reliefs as prayed for in the petition.

3. Learned advocate Mr. Ashutosh Dave appearing on behalf of the petitioner has submitted that the FDRs in question were in fact created by virtue of the funds of the company and it has nothing to do with Mr. Bhupendra Panchal and on the contrary, it is clearly evident that the then Branch Manager Mr. Bhatt and Mr. Panchal committed the fraud with the company like this and therefore, when the FDRs are created out of the funds of the company, there is hardly any reason not to grant the request made

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by the petitioner to the Bank. It has been submitted that even subsequent to this, after scrutiny of all the relevant papers, when the Branch Manager, in categorical terms, has stated that the FDRs were inadvertently opened in the joint name of M/s. J Parihar Interior Consultants Private Limited i. e. the petitioner company and Mr. Bhupendra Panchal and this letter came to be issued on 18.09.2017 reflecting on page 24 of the petition compilation, after scrutiny of all relevant papers despite the aforesaid proceedings which are pending and therefore, when the Bank itself wrote a letter to the petitioner that through inadvertence, FDRs have been created in the joint name, there is hardly any reason not to consider the request of the petitioner and as such, Mr. Dave has requested to grant the relief prayed for in the petition. In addition thereto to substantiate this letter, learned advocate Mr. Dave has pointed out the statement of account of the Bank attached to the petition compilation on page 76 and thereby, has submitted that these FDRs are created in the joint name by mistake and the funds have travelled from the account of the company and as such, there is no earthy reason for the respondent Bank not to release the funds in respect of these FDRs. Learned advocate Mr. Dave has vehemently contended that the aforesaid tactic has been played by ex-employee Mr. Panchal in connivance with the then Branch Manager of the respondent Bank and both are to be dealt with in accordance with law, but till then, the sizable amount belonging to the company may not be stuck up. According to Mr. Dave, the issue is practically clarified by the Bank by way of writing a letter that the FDRs in the joint name have been created by sheer mistake and there is no other reason to investigate much into the matter and as such, the relief prayed for deserves to be granted. Ultimately, learned advocate Mr. Dave has submitted that irrespective of the proceedings, the amount since belongs to the petitioner company

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be made available back and hence, there seems to be no disputed question of fact which requires long drawn trial and hence, in exercise of extraordinary jurisdiction, this Hon'ble Court may grant the relief prayed for. No other submissions have been made.

4. Having heard leaned advocate for the petitioner and having gone through the relevant material attached to the petition's compilation, following circumstances are not possible to be unnoticed before examining the relief prayed for in the petition :-

4.1 First of all, from the averments made on oath by the petitioner itself, it is indicating that a company itself has passed a resolution in the board meeting empowering the directors /employees to ply the fixed deposits being created in the bank and the authority was vested in two of the directors of the company and an employee in the name of Mr. Bhupendra Mafatlal Panchal. Further, it appears from the averments itself that Mr. Bhupendra Panchal was officially employed by the petitioner and a deed was executed by him with the petitioner in 2009, by which, his share in the profit was also determined in the projects, in which, he would be devoting his contribution. It may be that having might not been registered, but at the same time, this averment clearly indicates that there was a share in the profit determined which has a direct nexus with the company.

4.2 Now, for this very grievance which has been voiced out about the bank's involvement with Mr. Panchal in creation of fixed deposits in question, the petitioner company approached the competent forum i. e. office of Banking Ombudsman and this Lokpal Karyalaya, after scrutiny of the complaint of the petitioner, has clearly opined that the complaint requires elaborate

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examination of documents and oral evidence and as such, adjudication is not possible. This conclusion arrived at is reflecting on page 63 in the form of communication to the petitioner company dated 04.05.2017. It reads as under :-

"Please refer to your captioned complaint regarding fraudulent opening of account lodged with us vide your complaint dated February 24, 2017 and a mail dated March 20, 2017 on the captioned subject. The matter was taken up with State Bank of India, SBI, vide its mail dated April 15, 2017, advised that there were some procedural lapses in the process of TD opening for which administrative decision is to be taken by appropriate authority. They have also furnished us the copies of both the FDRs, pay-in-slips and the cheques wherein names of your company as well as one Shri Bhupendrakumar Mafatlal Panchal are found. It is difficult for this office to verify the allegation of forgery made by you.

In the circumstances, it is observed that your complaint matter requires consideration of elaborate documentary and oral evidence and the proceedings before the Banking Ombudsman are not appropriate for adjudication of such complaints. Accordingly, your complaint is closed under Clause 13(c) of the Banking Ombudsman Scheme, 2006 against which no appeal facility is provided under the Scheme. However, you may approach any alternate forum of appropriate jurisdiction, if so desired, for redressal of your grievances."

4.3 Further, no doubt, it appears that the creation of FDRs is out of the funds of the petitioner company, but nonetheless this is the subject matter in controversy of fraudulent act by Mr. Panchal who was undisputably not only the employee, but was a profit sharer in the company as well, as per the say of the petitioner itself. Now, this very controversy is not only the subject matter of civil suit being Special Civil Suit No. 329 of 2017 filed by Mr. Panchal, but the alleged connivance which has taken place, has also resulted into filing of substantive criminal complaints and the

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same are stated to be pending at both forums and as such, it is not possible to accept at this juncture that simply because the FDRs are created out of the funds of the company, straightway be refunded to the company. On the contrary, in the civil suit, when an application is filed under Order I Rule 10 of the Civil Procedure Code for joining the State Bank of India as necessary party, a clear assertion is made with regard to this creation of FDRs which is reflecting on page 119 as well as page 120 of the petition compilation. Hence, there is a clear assertion interwoven in the said proceedings hence to allow the relief at this juncture simply because on the basis of one letter written by the successive Branch Manager at a subsequent point of time, would be nothing to ignore aforesaid pending controversy.

5. At this stage, on the basis of mere letter dated 18.09.2017, it is not possible for this Court to straightway grant the relief as prayed for in this petition and as such, on the basis of material placed before this Court and on the basis of averments which are made by the petitioner company itself, it appears to this Court that on the basis of such a serious alleged fraud being practiced and which has a direct nexus with the FDRs in question, no case is made out by the petitioner to grant the relief as prayed for, as a result of which, the petition being devoid of merits, stands dismissed.

(ASHUTOSH J. SHASTRI, J)

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