Bank Of India, Mumbai And Others vs Pushpa Panikar And Others

Gautam Kumar Choudhary, J

Both these first appeals along with the cross-objection arise out of the common judgment and decree dated 29.10.2009 passed by the Sub-Judge-VI, Ranchi in Title Suit No. 36 of 1999, therefore they have been heard together and shall be disposed of by common judgment.

Appellants are the Defendants and the suit has been decreed awarding compensation of Rs 15 lakhs each against both the Appellants.

The respondents are the substituted heirs and descendants of A.V. Panickar who was the Plaintiff in the suit brought for defamation against Bank of India and Bihar Air Products Ltd.

CASE OF THE PLAINTIFF

The plaintiff was running a business of gases in the name and style of M/s Oriental Gases. Plaintiff was the dealer of gases manufactured by M/s Bihar Air Products Ltd., Jamshedpur, which is a unit of Bihar State Industrial Development Corporation, Patna.

Planintiff being sole proprietor of the firm, had been granted cash credit facility by the Bank of India (D-1 and D-2) for Rs. Two Lakh in the year 1995. The said loan was extended on hypothecation of stocks and against book debt to the Plaintiff for doing the said business sometimes in the month of February 1995.

Cause of action arose in the month of February, 1996 when Bihar Air Products Ltd. (D-3) terminated dealership of the plaintiff.

The immediate cause for termination of dealership was that the Bank of India (D-2) sent a letter dated 26.02.1996 to M/s Bihar Air Products Ltd. making false allegation that the bank had financed loan to the plaintiff against the hypothecation of cylinders, both filled and empty belonging to defendant no. 3. It is asserted that the said allegation was not true as the plaintiff had never hypothecated the gas cylinder to defendant nos. 1 and 2.

M/s Bihar Air Products Ltd. taking cognizance of false allegation, wrote letter to various authorities including Sr. Superintendent of Police, Ranchi, consequently petitioner was taken to Chutia police station on 04.04.1996 wherein he was detained for some time. It is asserted that there was no breach of any terms of agreement by the plaintiff and termination of dealership and wrongful detention of petitioner in the police station caused him irreparable loss and mental agony.

The suit was filed, inter alia, for the relief for compensation of Rs.32,91,000 against defendant Nos. 1 and 2 and a separate decree of Rs. 25,00,000 and for declaration that the termination of dealership was illegal and void ab initio. Further, damages for loss suffered by the plaintiff due to such termination.

CASE OF BANK OF INDIA (D-1 & D-2)

The main plea of the defence is that M/s Oriental Gases was the partnership firm of M/s Bhagirathi Panickar and M/s Sashi Kala Prasad. Later on, cash credit facility was allowed on hypothecation of gas cylinder, which logically included gas which is filled up in it.

Defendant no. 2 avers that the instant suit was filed to escape the rigors of the certificate case lodged by the Bank for realization of loan amount due to the bank.

The agency of the plaintiff was terminated much before the letter dated 26.02.1996 and, therefore, this was not the proximate cause for termination of dealership.

CASE OF M/S BIHAR AIR PRODUCTS LTD. DEFENDANT NO. 3

It is averred that the termination of dealership was as per clause of agreement for non-performance of business, non-compliance of the terms of bills and non-lifting and gas for about nine months, non-payment of dues, holding of cylinder of the defendant and filling up of cylinder from other sources without obtaining any permission. Additional written statement has been filed wherein further plea of forgery of challan has been pleaded.

It is not disputed by the Bank of India that the cash credit facility for Rs. 2 lakh was granted to the plaintiff against hypothecation of stocks against the book debt to the plaintiff for doing the said business of dealer of gases manufactured by defendant no. 3. However, it is asserted in para 15 of the written statement that the documents, executed by the plaintiff in favour of the Bank, were sufficient proof of hypothecation of gas cylinder in favour of Bank and further corollary has been pleaded that gas cannot be hypothecated without hypothecation of any cylinder.

With regard to the letter dated 26.02.1996 issued by the Bank and the accusation made therein, which has been pleaded in para 10, there is no expressed denial on behalf of the Bank, however, has accepted receipt of letter dated 26.02.1996.

With regard to detention of the plaintiff, on 04.04.1996 there is no express denial by the Bank (D 1 and 2) and Bihar Air Products in para 18. However, it has been asserted that Chutia Police could give suitable reply whether the plaintiff had been interrogated or not and defendant nos. 1 and 2 were not related with such event.

In para 20 of the written statement filed by the Bank of India, a contradictory stand has been taken wherein it has been stated that defendant no. 2 in its letter addressed to defendant no. 3 has rightly mentioned that the cash credit was against hypothecation of gas cylinder, however, defendant no. 2 in its letter dated 29.03.1996 made it clear that cash credit was not against the hypothecation of cylinders. Meaning thereby, that the cylinder was not hypothecated with the Bank for issuance of cash credit facility.

Learned trial court framed the following issues: 1. Whether the suit as framed is maintainable?

Whether the plaintiff has valid cause of action ?

Whether the suit is barred by limitation, waiver, estoppel and acquiescence?

Whether the suit is bad for mis-joinder of parties?

Whether the plaintiff was detained and interrogated by the police on the false information given by defendant nos. 2 and 3 causing damage to his reputation image and his business?

Whether the termination of dealership by defendant no. 3 is arbitrary, illegal and in violation of natural justice causing loss to the plaintiff?

Whether the plaintiff is entitled to the damages as claimed against defendant nos. 1 and 2 jointly and against defendant no. 3 separately?

Whether the plaintiff is entitled to any other relief?

On Issue no. 5 – A finding has been recorded that because of the act of defendant no. 2 the plaintiff was detained causing him mental agony and injury. His friend and relatives came to know about his detention and once the injury is proved intention in case of torturous liability is irrelevant. Bank of India was held liable for illegal detention.

Issue No. 6 – It has been held that the termination of dealership by defendant no. 3 was made arbitrarily, illegally and in violation of the principles of natural justice. M/s Bihar Air Products Ltd. was liable for illegal termination of the agency.

ANALYSIS

Main argument on behalf of the appellants is that compensation has been awarded de hors the evidence and on mere conjectures. There is no material on record to show how the plaintiff(s) suffered any loss damage to the tune of Rs.

15 Lakhs which is to be paid by defendant no.3. The agency had to be terminated as the Plaintiff had failed to take the agreed supply of gases from Bihar Air Products. The said termination was before the letter was written by the Bank and therefore it was not the sequel it. Termination was on account of breach of agreement and non-renewal, and not due to the letter of the Bank.

It was for the Plaintiffs to have pleaded and proved that they took steps for renewal of the agreement. The defendants(s) cannot be saddled with proof of negative fact, as has been held by the learned Trial Court, wherein it has been stated that they have failed to prove that plaintiff(s) did not take steps for renewal of the lease agreement.

The point for determination in the instant appeals is as under:

i. Whether the plaintiff was detained by the police causing damages to his reputation, image and his business?

ii. Whether the Appellants were responsible for the detention of the Plaintiff?

iii. Whether the termination of dealership by Bihar Air Products (defendant no. 3) was arbitrary, illegal and in violation of the natural justice, caused by the letter of the Bank of India dated?

iv. Whether the damage for defamation as assessed by the learned trial Court was just and reasonable?

The cause of action for damages on account of defamation is the said detention of the plaintiff by Chutia Police. The pleading is supported by oral evidence of the witnesses examined on behalf of the plaintiff. In view of the testimony of witnesses that plaintiff was detained by police on 04.04.1996 in the evening from 5.30 pm to 11.30 pm the finding of fact by the learned court below on Issue No.5 to the extent that Plaintiff was detained that evening cannot be disputed.

The question arises if the appellants were responsible for the detention of the plaintiff?

On this the plaintiffs have failed to bring any evidence on record that appellants had moved police or administration for the arrest of the plaintiff.

On the contrary, the very foundational plea that the letters dated 26.02.1996 and 29.03.1996 issued by the Bank of India (D 2) to Bihar Air Product (D3) was the cause for termination of the agency by D3, has not been proved. It is submitted by learned counsel on behalf of the appellant Bihar Air Products (in F.A. No. 141 of 2010), and rightly so that the letter of termination of agreement was served to the plaintiff vide Exhibit 1/H dated 21.02.1996 before the letters were sent by the Bank of India.

Furthermore, letter of termination of agency was unrelated to the letters sent by the Bank. Plaintiff stopped taking supply since 12.05.1995 and they had not approach for the renewal of the agreement. With regard to non-lifting of Gas Cylinders as per the terms of the agreement, two letters were sent by the plaintiff to the Defendant no. 3 and marked as Exhibit 6-B vide letter dated 12.10.1995 and Exhibit 7 [Legal Notice dated 03.04.1996], wherein there is admission that they had not been lifting cylinders since May, 1995. These letters are admissions on the part of the plaintiff that they had not been lifting the gas cylinders as per the terms of agreement. Exhibit-7 which has been marked as exhibit on behalf of the plaintiff and is a legal notice issued on behalf of the plaintiff(s) to the defendant No.3, will go to show that it was not Bihar Air Product Ltd. that had committed breach of agreement by not supplying the cylinders, rather it was the plaintiff who himself had stated that he was not in a position to take supply of gas.

These documentary evidences completely demolish the plaintiff’s case that termination of dealership was the fallout of letter dated 26.02.1996 sent by the Bank of India to the Bihar Air Products. Plaintiff himself was committing breach of agreement of agency, by not lifting the requisite quota of gas cylinders from Defendant No.3 and the said agency was terminated before the letter was sent by the Bank to Defendant no.3.

From the above it can be safely concluded that letter dated 26.02.1996 addressed by the Bank to the Bihar Air Products was not the causa casuans for termination of the agency.

Learned that trial court appears to have attached undue importance to Ext. 1/G , which is a letter addressed to the Manager, Commercial Bihar Air Products Ltd. by Deputy Chief Manager, Bank of India dated 26.02.1996 which reads as under :

“We are in receipt of your letter No. BAP:FY:32:1155 dated 21.02.96 original address sh. Panicker and copy endorsed to us.

In this connection we wish to advise you that we have granted credit facilities to Oriental Gases against hypothecation of cylinders both empty and filled. We also understand that they have deposited security money with you towards cylinders.

We therefore, request you to send us your cheque/DD towards refund of security money direct to us in favour of Bank of India A/c Oriental Gases.

Please do not refund the security money to Sh. Panicker or Oriental Gases in case you want to refund the security”

Ext. 6/D is a letter issued by the Chief Manager, Bank of India, addressed to the Manager, Commercial, Bihar Air Products with a copy to the plaintiffs wherein a clarificatory letter has been issued stating that cash credit facilities granted to M/s Oriental Gases, were not against hypothecation of cylinders and the earlier letter dated 26.02.1996 was erroneously issued. This subsequent letter dated 29.03.1996 can be accepted as an admission by way of evidence that the cylinders were not hypothecated by the Bank of India for extending cash credit facility.

These letters were private correspondences, and there is no evidence to support the pleading that because of those letters, the agency was terminated or administration was moved against the plaintiff. Unless there is chain of evidence from which an inference can be drawn, that private correspondence between the Bank and Bihar Air Products, led to the detention of the plaintiff, a liability cannot be saddled on the defendants for consequence if any arising out of the said detention. There is no evidence in support of the pleading that Bihar Air Products (defendant no. 3) sent letters to various Authorities including Commissioner, South Chhotanagpur Division, Ranchi, Sr. Superintendent of Police, Ranchi and others resulting in his detention on 04.04.1996 by Chutia Police Station leading to his defamation.

In view of the above discussion it can be concluded that Judgment and Decree passed by the learned court below is not sustainable. The finding of fact with regard to issue no. (5) that detention of the plaintiff was on account of false information given by the defendants, is unsupported by evidence. For the reasons discussed above, finding that termination of dealership was arbitrary and in violation of natural justice, is also not sound and unsupported by evidence. Award of compensation for damages is based on conjecture and surmises without any legal basis.

Judgment and decree passed by the learned trial Court is set aside.

Both the appeals are allowed.

C. O. No. 03 of 2012 is dismissed.

I.A., if any, stands disposed of.