Jharkhand High Court

Anil Kumar vs The Chief Manager on 22 December, 2021

                                1

      IN THE HIGH COURT OF JHARKHAND AT RANCHI
                 W.P.(C) No. 4450 of 2018

Anil Kumar                                  ...     ...     Petitioner
                                  Versus
1.   The Chief Manager, Bank of India, Church Road Branch, Ranchi
2.   The Banking Ombudsman, Reserve Bank of India, Ranchi
3.   The Appellate Authority for the Banking Ombudsman Scheme,
     Reserve Bank of India, Consumer Education and Protection
     Department, Central Office, Mumbai
4.   Reserve Bank of India, New Central Office Building, Shahid Bhagat
     Singh Road, Fort, Mumbai               ...    ...      Respondents
CORAM: HON'BLE MR. JUSTICE RAJESH SHANKAR
                        -----

For the Petitioner : Mr. Rahul Kumar Gupta, Advocate For the Respondent no.1 : Mr. A. Allam, Sr. Advocate

-----

Order No. 08 Dated: 22.12.2021

The writ petition is taken up today through Video conferencing.

The present writ petition has been filed for issuance of direction upon the respondents to pay a sum of Rs.25,00,000/- to the petitioner as the same was illegally reversed from the petitioner's bank account. Further prayer has been made for issuance of direction upon the respondent no. 1 to lift the lien marked on the amount of Rs. 2,00,000/- transferred in the bank account of the petitioner.

2. The learned counsel for the petitioner submits that M/s Bhanu Construction and its sister concern M/s UTS Infratel Pvt. Ltd. being regular customer of the petitioner's firm namely, M/s ANICOMP had been placing orders to it from time to time for supply of computers, accessories and other allied items as per its requirement and accordingly the petitioner's firm used to supply the said materials raising the bills for such supply. M/s Bhanu Construction as well as its sister concern M/s UTS Infratel Pvt. Ltd. used to transfer the amount of bills in the petitioner's bank account opened in Bank of India, Church Road Branch, Ranchi. In the month of August 2017, M/s Bhanu Construction and its sister concern received the goods worth Rs. 25,32,670/- and M/s Bhanu Construction transferred a sum of Rs.25,00,000/- in the petitioner's account on 16.08.2017 towards

payment for the same. However, on 20.09.2017, the petitioner received a call from one Mr. Sameer Khalkho, Senior Manager, Bank of India, Church Road Branch, Ranchi alleging that a sum of Rs. 25,00,000/-was transferred in the petitioner's account in an unauthorized manner. At that time, the petitioner was in Kolkata, hence he requested the said officer of Bank of India to wait till he gets back to Ranchi in order to ascertain the actual fact. Despite the said request, the respondent no. 1 reversed a sum of Rs. 25,00,000/- from the account of the petitioner. The petitioner visited the said Branch and also filed an online complaint with the respondent no. 1 who, on 04.10.2017 replied that after receipt of a letter from SBI, Hatia Branch, he tried to contact the petitioner on 20.09.2017, but he could not be contacted and since the petitioner's complaint dated 23.09.2017 was received by the branch on 27.09.2017, the amount was already reversed after discussion with the officials of SBI, Hatia Branch on their visit to the Church Road Branch of the Bank of India. An online complaint lodged by the petitioner was also closed by the respondent no. 1 on the ground that the reversal was already done on the request of SBI, Hatia Branch. The petitioner again wrote letters dated 05.10.2017 and 06.10.2017 to the respondent no. 1 and provided complete details of the said transfer of amount to his bank account stating that there used to be regular transactions with the said customers i.e., M/s Bhanu Construction and its sister concern M/s UTS Infratel Pvt. Ltd, however, no step whatsoever was taken by the respondent no. 1 for redressal of the said grievance of the petitioner. Thereafter, the petitioner lodged a complaint with the respondent no. 2 on 25.10.2017, however, in the meantime, the respondent no. 1 forwarded a letter written by A.G.M., SBI, Hatia Branch, Dhurwa to him suggesting that the reversed money should be taken from M/s Bhanu Construction and their partners namely, Sanjay Tiwari @ Sanjay Kumar Tiwari and Suresh Kumar as the money transferred in the petitioner's bank account by the said partnership firm was part of Rs. 100.01 crores of public fund mistakenly transferred to the account of the said partnership firm, which had siphoned off the said amount. The petitioner also tried to

contact the said firm, but he was told that the dues of the petitioner had already been paid and thus it was not liable if the respondent no. 1 had reversed the amount from his bank account. The respondent no. 1 then requested SBI, Hatia Branch vide email dated 23.11.2017 (a copy of which was also forwarded to the petitioner) to refund the said amount which clearly suggests that the respondent no. 1 had realized his mistake in reversing the amount of Rs. 25,00,000/-. Thereafter, the petitioner was eagerly waiting for redressal of his complaint by the respondent no. 2 on sending reminders dated 29.11.2017 and 14.12.2017, however he got information under the Right to Information Act (RTI) from the respondent no. 2 that there was no citizen charter for handling the cases by the Banking Ombudsman and that there was no time frame under Banking Ombudsman Scheme, 2006 for resolution of complaints. Thereafter, the respondent no. 2 vide letter dated 26.03.2018 informed the petitioner that as per the input of the respondent no. 1, M/s Bhanu Construction had transferred the amount of Rs. 25,00,000/- in the petitioner's account which was part of the public fund of Rs. 100.01 crores and since SBI had started recovery proceedings against M/s Bhanu Construction before Debts Recovery Tribunal, Ranchi, it was decided to close the petitioner's complaint. The petitioner then preferred an appeal before the respondent no. 3 on 22.04.2018, however, no decision was taken on same. Hence, the present writ petition.

3. Learned counsel for the petitioner submits that closure of the petitioner's complaint by the respondent no. 2 was not proper as no complaint concerning the petitioner and the respondent no. 1 was pending before the Debts Recovery Tribunal, Ranchi or any other court. It is further submitted that the action of the respondent no. 1 in reversing the amount of Rs. 25,00,000/- from the petitioner's account without his permission or of any other competent authority is illegal and arbitrary. The petitioner has been discriminated inasmuch as other banks situated at Ranchi including Axis Bank/HDFC Bank had refused to reverse similar transaction from those bank accounts which had received fund from the account of M/s Bhanu Construction

on the ground that permission of competent authority was required for such reversal order. However, the respondent no. 1 acted on request of the State Bank of India, Hatia Branch and debited the said amount from the bank account of the petitioner's firm (ANICOMP) without any order of the competent authority or without consent of the petitioner. The ground on which the petitioner's complaint was rejected by the respondent no. 2 was not in consonance with the provisions of Clause 13(b) read with 9(3)(d) of the Banking Ombudsman Scheme, 2006. It is also submitted that no opportunity of hearing was given to the petitioner by the respondent no. 2 to represent the matter, who did not only close the petitioner's complaint without any legal ground but also took belated unilateral decision based on the submission of the respondent no. 1.

4. On the contrary, learned senior counsel for the respondent no. 1 submits that since SBI filed O.A. No. 608 of 2017 before the Debts Recovery Tribunal, Ranchi which was disposed of in terms with order dated 22.03.2018 and the matter relating to transfer of Rs. 100.01 crores of public fund in the bank account of M/s Bhanu Construction is still under investigation by the CBI, the present writ petition is not maintainable. The petitioner already knew that the proceedings before the Debts Recovery Tribunal, Ranchi was pending, but he was making futile exercise of getting the said amount back to his bank account. It is further submitted that a sum of Rs. 100.01 crores of the Government of Jharkhand was wrongly transferred in the account of M/s Bhanu Construction bearing Account No. 36310149578 by the SBI, Hatia Branch, Ranchi instead of crediting the same in the account of Jharkhand State Mid Day Meal Authority (Jharkhand Rajya Madhyan Bhojan Pradhikaran). M/s Bhanu Construction immediately transferred part of the said amount to its creditors. As soon as the Bank of India came to know that a sum of Rs. 25,00,000/- was transferred by M/s Bhanu Construction to the bank accounts of ANICOMP, the respondent no. 1 tried to verify the said fact from the petitioner, but he was not available at Ranchi. It thereafter came to light that said amount was part of the public fund and the Bank of India being a public sector bank had no option but to

revert the said amount in accordance with law on request of the SBI, Hatia Branch, Ranchi for subsequent transfer of the same to the actual bank account. So far the claim of the petitioner that it had regular business with M/s Bhanu Construction and certain debts were paid by it to the writ petitioner, the Bank of India was not in a position to verify the same as a proceeding was pending before the Debts Recovery Tribunal, Ranchi at the relevant time, which was subsequently disposed of on 22.03.2018.

5. Heard the learned counsel for the parties and perused the materials available on record. The contention of the petitioner is that it had supplied certain goods to M/s Bhanu Construction and to clear the dues of the petitioner, an amount of Rs. 25,00,000/- was transferred in his bank account maintained in the Bank of India, Church Road Branch, Ranchi, however, the said amount was illegally reversed by the respondent no. 1 whereas the stand of the respondent no. 1 is that a sum of Rs.100.01 crores of public fund was wrongly transferred to the account of M/s Bhanu Construction by the SBI, Hatia Branch, Ranchi instead of crediting the same in the account of Jharkhand State Mid Day Meal Authority (Jharkhand Rajya Madhyan Bhojan Pradhikaran) and M/s Bhanu Construction siphoned off the said amount by transferring part of the same to his creditors including the petitioner. Having realized the said mistake, SBI, Hatia Branch requested the petitioner's bank i.e., BOI, Church Road Branch, Ranchi to revert the same to SBI, Hatia Branch and accordingly, the said amount was reversed from the account of the petitioner.

6. Learned counsel for the petitioner, in support of his submission, has put reliance on a judgment rendered by the Hon'ble Supreme Court in the case of "Jammu & Kashmir Bank Ltd. Vs. Attar-Ul-Nissa & Ors." reported in (1967) 1 SCR 792. I have perused the said judgment, paragraph 7, 8 and 9 of which are quoted hereinbelow:

7. We are of opinion that this contention of the respondents is correct, and the High Court was right in the view it took of the legal position. It is true that on the facts shown there was double payment for a certain period due to mistake on the part of

Government. The question however is whether it was open to the bank to reverse the entries in the manner it did without reference to Sultan Mohd. It has not been and cannot be disputed that it is not open to the bank to debit the account of a constituent like Sultan Mohd. with any sum without the authority of the constituent. What is however contended on behalf of the appellant is that Government paid the sum twice over by mistake and it was entitled to ask the bank to return the money paid by mistake and reliance in this connection is placed on Section 72 of the Contract Act.

There is no doubt that Section 72 of the Contract Act provides that a person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it. That section in our opinion will only apply when we are dealing with a case of two persons one paying the money and the other receiving the money on behalf of the person paying it. In such a case if the payment is made by mistake the person receiving the money must return it. But Section 72 in our opinion has no application to a case where money is paid by a person to a bank with instructions that it should be deposited in the account of a third person who is a constituent of the bank. As soon as the money is so deposited in the account of the third person, who is a constituent of the bank, the money becomes the money of the constituent, and it is not open to the bank in such circumstances to reverse the entry of credit made in the account of the constituent and in effect pay back the money to the person who had deposited it even though might if have been deposited by mistake.

8. As soon as the money is credited into the account of the constituent, even though the person paying in may have paid it by mistake, it becomes the money of the constituent, and the bank cannot pay it back to the person who paid it to the account of the constituent on his representation that it was paid by mistake, without obtaining the consent of the constituent. As we have already said the legal position is that for the purpose of payment, Government was the agent of Sultan Mohd. and whatever money was paid to be credited to the account of Sultan Mohd. even though it was paid through Government, became his money and it could not be paid out of his account which is in substance the effect of reversing the entries without his consent. Section 72 could certainty have been availed of by Government against Sultan Mohd. and the Government could have sued Sultan Mohd. for return of the money which had been paid by mistake into his account. But the Government could not ask the bank to reverse the entries and thus in effect ask it to pay out the money from the account of Sultan Mohd. into which it had been deposited and the bank could not do so without taking the consent

of Sultan Mohd. Further though Government was the agent of Sultan Mohd. for the purpose of payment of the money for liquidating the debt, the Government had no further authority on his behalf to ask the bank to pay back any sum once it had been credited into his account by Government. That could only be done on the authority of Sultan Mohd. and there was no authority in this case for paying back the sum paid in by mistake to Government, for the reversal of the entries in substance amounted to this.

9. It has been urged that on this view the bank would not be able to correct any mistake in the account of any constituent. That is not so. If, for example, a bank credits a cheque in favour of A by mistake into the account of B, the bank can always correct that mistake, for it had received the money on behalf of A. Similarly if the bank receives (say Rs 5000 on behalf of A from some person, but by mistake enters Rs 50,000 in A's account, the bank can always correct that entry and mention the correct sum received. But the present case is very different from corrections of such mistakes. Here the bank had received certain moneys on behalf of Sultan Mohd. through treasury bills or hundis. There is no dispute that money was received for credit to the account of Sultan Mohd. and was correctly credited to that account. There was therefore nothing which the bank could correct, for the bank had made no mistake in making the entries. The bank in our opinion is not concerned with any mistake made by the Accountant General or the treasury in sending the amounts to the bank for the credit of the same to the account of Sultan Mohd. If the Accountant-General or the treasury had made any such mistake it was open to them to recover the amount paid in by mistake from Sultan Mohd. But the bank could not reverse the entries and thus pay out money from the account of Sultan Mohd. without his authority. It is obvious that the bank hesitated to reverse the entries and only did it on the threat that the amount would be deducted from the subsidy paid to the bank by the Government. We have no doubt that the High Court was right that in such circumstances where the amount had been paid even though by mistake into the account of a constituent of the bank it was not open to the bank to reverse the entries at the instance of the person paying-in the money into the constituent's account on the ground that the payer had made a mistake. We agree with the High Court that Section 72 has no application to the facts of this case. Learned counsel for the appellant has referred us to Imperial Bank of Canada v. Bank of Hamilton [LR (1903) AC 49] in this connection. We are of opinion that that case has no application to the present cases, for the facts therein were different. The payment had been made by one bank to another bank by mistake; there is nothing to show that the money

had been paid into a constituent's account and thereafter any entry had been reversed in that case.

7. In the aforesaid case, the Hon'ble Supreme Court has held that money credited by the Government in the account of an account holder cannot be reversed by the Bank without obtaining consent of that account holder. However, if money is credited by the Bank in the account of any person due to some mistake, then the same can be corrected by the bank.

8. In the case in hand, the stand of the respondent no. 1 is that M/s Bhanu Construction transferred the said amount in the bank account of the petitioner which was mistakenly credited in its account and to correct the said mistake, the money was reversed from the account of the petitioner. It appears that the SBI also filed a case before the Debts Recovery Tribunal, Ranchi being O.A No. 608 of 2017 for recovery of the amount with interest which were transferred in the account of some of the creditors of M/s Bhanu Construction and the said case was disposed of by the Debts Recovery Tribunal, Ranchi vide order dated 22.03.2018, para 48 and 51 of which are quoted as under:

48. The liable defendants shall pay the amount immediately. The Applicant Bank is entitled to seize and sell all the vehicles/equipments/movable properties belonging to the defendant no. 1 to 3 which was preowned or purchased out of funds mistakenly transferred except on which other financiers have charge. The resources available with DRT are limited. It is not possible for the Recovery Officers in DRT to seize and sale large number of vehicles. Therefore, the Tribunal authorizes the Bank to select a team of officers to seize and sale the movables/vehicles/equipments of Defendants No. 1 to 3, so that the dues are recovered early. The Applicant Bank shall also be entitled to seize and sale vehicles financed by HDFC/Axis/any other institution/Banks after the financiers charge is satisfied. The Applicant Bank is also entitled to sale immovable properties to the extent required belonging to the Defendants No. 1 to 3, 7, 11 and 14. The Applicant Bank is also entitled to recover the cost of the O.A.

51. The effective composite and effective Recovery Certificate is for a sum of Rs.24,56,90,634.08 as Rs.76,29,53,387.40 has already been recovered by Applicant Bank and the DRT, Ranchi ratifies/authorizes various recoveries by applicant from accounts and

through voluntary payment. DRT also ratifies various adjustment made by applicant in its appropriate books in electronic form or manually.

9. This Court also finds that it is not a case of mere reversal of entries, rather M/s Bhanu Construction prima facie appears to have knowingly transferred the amount of public fund (custodian of which was the Government of Jharkhand) to its creditors including the petitioner and the investigation relating to such transaction is being done by the CBI.

10. In view of the aforesaid facts and circumstance, the relief sought by the petitioner cannot be entertained by this Court under its extraordinary writ jurisdiction.