Madras High Court
V.T. Ittiyarkutty vs Syndicate Bank on 19 January, 2021
S.A..No.1061 of 2008
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 19.01.2021
CORAM
THE HONOURABLE MR. JUSTICE T. RAVINDRAN
S.A.No. 1061 of 2008
and
M.P. No.1 of 2008
1. V.T. Ittiyarkutty
Sree Egg Market
Coonoor 2
2. Theresa
W/o. Ittiyarkutty ... Appellants
Vs.
Syndicate Bank
Rep. by its Manager
Figure of 8 Road
Nilgiris District. ... Respondent
Prayer: Second Appeal filed under Section 100 of the Civil Procedure
Code against judgment and decree dated 26.02.2008 passed in A.S. No.2
of 2008 on the file of the learned District Judge (Appellate Authority),
Nilgiris at Uthgamandalam reversing the judgment and decree dated
28.08.2000 passed in O.S. No.224of 1997 on the file of the learned
District Munsif of Coonoor.
For Appellants : Mr. S. Kingston Jerold
For Respondent : Mr. P. Srinivasalu
Page 1 of 17
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S.A..No.1061 of 2008
JUDGMENT
Challenge in this second appeal is made to the judgment and
decree dated 26.02.2008 passed in A.S. No.2 of 2008 on the file of the
District Judge (Appellate Authority), Nilgiris at Uthgamandalam
reversing the judgment and decree dated 28.08.2000 passed in O.S.
No.224of 1997 on the file of the District Munsif Court, Coonoor.
2. For the sake of convenience, the parties are referred to as per
their rankings in the trial court.
3. The defendants in O.S. No.224 of 1997 are the appellants in
the second appeal.
4. Suit for recovery of money.
5. Briefly stated, according to the plaintiff, the second
defendant, as the guardian and father of the first defendant, opened a
Pigmy Deposit A/C. No.6009 on 02.11.1991 with the plaintiff's branch at
Coonoor and the abovesaid account is to be matured on 02.02.1997 and
on 14.09.1994, the second defendant, as the guardian and father of the
first defendant, made an application for advance by way of loan on the
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aforestated deposit for the sake of his minor son's expenses and availed a
loan amount of Rs.40,000/- from the plaintiff's bank. The abovesaid sum
of Rs.40,000/- had been paid to the second defendant vide loan on
deposit A/c. No.189/94 and credited to S.B. A/c. No.6379 of the second
defendant with the plaintiff's bank and the second defendant has also
collected the said sum from his S.B. account on the same date. The
second defendant had agreed to repay the borrowed sum with accrued
interest as per the RBI guidelines as applicable from time to time. The
second defendant, on 04.04.1995, approached the plaintiff's bank for the
pre-mature closure of the Pigmy Deposit Account No.6009 in the name
of the first defendant and the plaintiff's bank also closed the said account
and paid a total sum of Rs.94,076/- being the proceeds with accrued
interest thereon by crediting the same to the S.B. A/c. No.6379 of the
second defendant with the plaintiff's bank and the second defendant had
withdrawn the entire amount on the same day. At the time of the closure
of the Pigmy Deposit Account, the plaintiff's bank by mistake paid the
entire sum stood to the credit of the first defendant without deducting the
loan amount on deposit and the second defendant, in all, only paid a sum
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S.A..No.1061 of 2008
of Rs.25,000/- towards the loan amount and there is a balance of
Rs.15,000/- together with accrued interest, which he had availed and
neglected to pay. Hence, the suit for recovery of money.
6. The defendants resisted the plaintiff's suit admitting that the
Pigmy Deposit Account was opened in the said bank in the name of the
minor, the first defendant, and the same was closed on 04.04.1995 and
the plaintiff's bank paid the balance amount and the documents after
adjusting all the amount due thereon after due verification. Therefore, it
is incorrect to state that by mistake the entire amount was paid to the first
defendant and still there is a balance of Rs.15,000/- together with
accrued interest to be paid by the second defendant. After verification of
the accounts and settling the same, the plaintiff's bank cannot claim the
suit amount stating that by mistake, the account had been closed. The
suit is bad for non joinder of parties. There is no cause of action for the
suit and hence, the suit is liable to be dismissed.
7. In support of the plaintiff's case P.W.1 was examined, Exs.
A1 to A11 were marked. On the side of the defendants, D.W.1 was
examined and no document has been marked.
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S.A..No.1061 of 2008
8. On a consideration of the oral and documentary evidence
adduced in the matter and the submissions put forth by the respective
parties, the trial court was pleased to dismiss the plaintiff's suit with
costs. On an appeal by the plaintiff, the first appellate court on an
evaluation of the materials placed on record and the submissions put
forth by the respective parties, was pleased to allow the appeal in part
preferred by the plaintiff's bank and by way of the same, set aside the
judgment and decree of the trial court and held that the plaintiff is
entitled to a decree for Rs.16,168/- with proportionate costs with interest
at the rate of 6% per annum from the date of the plaint till the date of
realisation and dismissed the plaintiff's suit as against the first defendant.
Impugning the judgment and decree of the first appellate court, the
defendants have preferred the present second appeal.
9. At the time of the second appeal, the following substantial
questions of law were formulated for consideration.
1) Whether the judgment and decree of the lower
appellate court is sustainable especially when the
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S.A..No.1061 of 2008
deceased first defendant-minor could not be a
borrower?
2) Whether the decree granted against the appellants
personally is right especially when the appellants
are not the borrowers as found by the lower
appellate court?
3) Whether the decree of the lower appellate court is
sustainable especially when the suit is dismissed
against the first defendant he being borrower
represented by his guardian the first appellant from
the respondent/bank?
4) Whether the lower appellate court is right in
granting a personal decree against the second
appellant she being the legal representative of the
deceased first defendant?
10. The parties are not at issue with reference to the opening of
the Pigmy Deposit Account with the plaintiff's bank by the second
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S.A..No.1061 of 2008
defendant as the guardian and father of the first defendant/minor in the
name of the first defendant. It is also not in dispute between the parties
that the second defendant had availed the loan of Rs.40,000/- against the
abovesaid Pigmy Deposit account and following the sanction of the loan,
it is seen that the loan amount had been credited to the S.B. A/c. No.6379
of the second defendant and the same had been withdrawn by the second
defendant. Ex.A1 is the application for the loan made by the second
defendant. Ex.A2 is the receipt given by the second defendant and
Ex.A9 is the loan account statement copy. Further the parties are not at
issue that the abovesaid Pigmy Deposit Account was prematurely closed
by the second defendant and thereby the plaintiff's bank had credited the
proceeds of the abovesaid deposit account amounting to Rs.94,076/- in
the S.B. A/c. No.6379 of the second defendant and the same had been
withdrawn by the second defendant. The abovesaid facts could be
gathered from the copy of the Pigmy Deposit Account marked as Ex.A8
and the slip marked as Ex.A5.
11. Qua the loan amount obtained by the second defendant
against the Pigmy Deposit Account, as above stated, Ex.A1 is the loan
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S.A..No.1061 of 2008
application form submitted by the second defendant. On a perusal of
Ex.A1, it is seen that the lien has been created in favour of the plaintiff's
bank for the abovesaid loan amount against the proceeds available in the
Pigmy Deposit Account.
12. Now according to the plaintiff's bank, against the borrowal
of the loan of Rs.40,000/-, the second defendant has paid only
Rs.25,000/- vide Exs.A10 and A11. That only a sum of Rs.25,000/- has
been paid by the second defendant under Exs.A10 and A11 has not been
controverted by the second defendant. Though the second defendant has
taken a plea that he has discharged the entire loan amount, however, no
material worth acceptance has been projected by the second defendant to
hold safely that he has discharged the entire loan amount particularly
before the premature closure of Pigmy Deposit Account. In the
abovesaid circumstances, as rightly held by the first appellate court, the
second defendant is due to the plaintiff's bank a sum of Rs.15,000/-
towards the loan transaction with accrued interest as per law.
13. The Pigmy Deposit Account had been prematurely closed
by the second defendant and as abovestated, the plaintiff's bank has also
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S.A..No.1061 of 2008
disbursed the entire proceeds of the said account amounting to
Rs.94,079/- by crediting the sum in the S.B. A/C. No.6379 of the second
defendant, which had also been withdrawn by the second defendant on
the same day.
14. Now according to the plaintiff's bank, while closing the
Pigmy Deposit Account, the plaintiff's bank by mistake disbursed the
entire amount without deducting the amount to be paid by the second
defendant towards the loan transaction and therefore, seeking for the
recovery of the balance loan amount to be paid by the second defendant
amounting to Rs.15,000/- with accrued interest, according to the
plaintiff's bank, it has been necessitated to institute the present suit.
15. When the availment of the loan of Rs.40,000/- against the
Pigmy Deposit Account has not been controverted by the second
defendant and when the materials disclosed that only a sum of
Rs.25,000/- has been paid by the second defendant and no material has
been projected by the second defendant to hold that he had discharged
the entire loan amount, as rightly contended by the plaintiff's bank, the
sum of Rs.15,000/- with accrued interest is liable to be paid by the
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second defendant to the plaintiff's bank. However, it is seen that though
under Ex.A1, lien has been created in favour of the plaintiff's bank on
Pigmy Deposit Account for the clearance of the loan amount, however,
the plaintiff's bank by mistake, while prematuredly closing of the Pigmy
Deposit Account, had proceeded to disburse the entire proceeds of the
same, without deducting the amount due to it towards the loan
transaction. In the light of the abovesaid factors, merely because, the
plaintiff's bank had paid the entire proceeds of the Pigmy Deposit
Account on which the lien had been created, on that score, it cannot be
held that the loan in question had been discharged by the second
defendant as per law. When the second defendant had failed to prove the
plea of discharge of the loan by placing acceptable material, in such view
of the matter, the first appellate court is found to be justified in holding
that the second defendant is liable to pay Rs.15,000/- to the plaintiff's
bank.
16. The first appellate court has also further held that since the
plaintiff's bank had failed to recover the loan in time and also by mistake
disbursed the entire proceeds of the Pigmy Deposit Account, on the delay
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S.A..No.1061 of 2008
caused due to the abovesaid facts, the plaintiff's bank would not be
entitled to seek the interest as prayed for, accordingly, rightly proceeded
to grant the interest in favour of the sum of Rs.15,000/- at the rate 6% per
annum only from the date of the plaint till the date of realisation and not
the interest amount as claimed by the plaintiff's bank in the plaint. The
abovesaid determination of the first appellate court do not warrant any
interference.
17. The defendants' counsel during the course of arguments
would contend that when the plaintiff's bank after verifying the accounts
had settled the same, cannot be allowed to turn back and contend that
still the loan amount is due from the second defendant and therefore,
according to him, the plaintiff bank is estopped from demanding the loan
amount. However, the abovesaid contention does not merit acceptance.
In this connection, as rightly contended by the counsel appearing for the
plaintiff coupled with the right of lien which the bank had over the
Pigmy Deposit Account viz-a-viz the loan amount disbursed to the
second defendant, when it is noted that the plaintiff's bank had paid the
entire proceeds of the Pigmy Deposit Account on the closure of the same
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S.A..No.1061 of 2008
to the second defendant without deducting the amount to be repaid by
him towards the loan by way of mistake, it is seen that the position of
law with reference to the same has been outlined in Section 72 of the
Indian Contract Act 1872. Section 72 of the Indian Contract Act, 1872,
reads as follows:
"72. Liability of person to whom money is paid, or thing
delivered, by mistake or under coercion - A person to whom
money has been paid, or anything delivered, by mistake or
under coercion, must repay or return it."
Applying the abovesaid position of law to the case at hand, it is noted
that the plaintiff's bank had paid the entire proceeds of the Pigmy
Deposit Account to the second defendant without deducting the amount
due from the second defendant towards the loan transaction and moreso,
when the plaintiff's bank is also having the right of lien over the proceeds
of Pigmy Deposit Account against the loan amount and the abovesaid
acts of the plaintiff's bank are only due to the mistake. The person who
had benefitted by way of the abovesaid mistake is liable to repay the
amount and cannot contend that he is not liable to make the payment. In
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this connection, the counsel appearing for the plaintiff's bank would rely
upon the decision of the Apex Court reported in AIR 1990 Supreme
Court 313 (Mahabir Kishre and others vs. State of Madhya Pradesh),
wherein the Supreme Court has held that where a person derives unjust
enrichment owing to the mistake committed at the expenses of another
party and the retention of the enrichment is found to be unjust, Section
72 of the Indian Contract Act directs the party who had attained the
unjust enrichment to repay the amount paid to him. The position of law
has been outlined by the Apex Court in the abovesaid decision as
follows:
(A) Contract Act (9 of 1872), S.72 - Unjust enrichment
requires: first, that the defendant has been 'enriched' by the
receipt of a "benefit", secondly, that this enrichment is "at
the expense of the plaintiff", and thirdly, that the retention of
the enrichment be unjust. This justifies restitution.
Enrichment may take the form of direct advantage to the
recipient's wealth such as by the receipt of money or indirect
one for instance where inevitable expense has been saved.
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18. In the light of the abovesaid discussions, when the second
defendant is found to be the beneficiary of the loan transaction as well as
the recipient of the proceeds of the Pigmy Deposit Account on its
premature closure and the second defendant has failed to establish that
he has discharged the entire loan amount which had been borrowed by
him from the plaintiff's bank, even though the Pigmy Deposit Account
has been opened in the name of the first defendant/minor, however, the
same had been transacted only by the second defendant as the father and
guardian of the first defendant/minor, in such view of the matter, taking
into consideration the abovesaid factors in toto, the first appellate court
is found to be justified in granting the decree in favour of the plaintiff's
bank as determined by it by rightly setting aside the judgment and decree
of the trial court.
19. In such view of the matter, in my considered opinion, no
substantial question of law, as such, is involved in the second appeal. Be
that as it may, the substantial questions of law formulated in the second
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appeal, for the reasons aforestated, are accordingly answered in favour of
the plaintiff's bank and against the defendants/appellants.
20. For the reasons aforestated, the judgment and decree dated
26.02.2008 passed in A.S. No.2 of 2008 on the file of the District Judge
(Appellate Authority), Nilgiris at Uthgamandalam are confirmed.
Resultantly, the second appeal is dismissed with costs. Consequently,
connected miscellaneous petition is closed.
19.01.2021
Index: Yes/No
Internet: Yes/No
Speaking/Non-Speaking order
bga
To
1. The District Judge (Appellate Authority), Nilgiris at Uthgamandalam
2. District Munsif Court, Coonoor.
3. Syndicate Bank
Rep. by its Manager
Figure of 8 Road
Nilgiris District.
4. The Section Officer, VR Section, High Court, Madras
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S.A..No.1061 of 2008
T. RAVINDRAN, J.
bga
S.A.No.1061 of 2008
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S.A..No.1061 of 2008
19.01.2021
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