SH. RAVJIBHAI GOVINDBHAI PATEL vs Branch Manager, State Bank of India

THE complainants have filed this complaint against the Opponent No. 1, the State Bank of India for the return of money, since the draft issued by the Bank has become non-payable on account of lapse of period of six months and the same having been taken possession by the Income-tax Department and, therefore, the complainants were not able to get the draft either for revalidation or payment thereof. THE complainants have alleged that the draft was taken by them so as to make the payment of the custom duty and was payable to Assistant Collector of Customs, Kandla. It appears that the draft was taken from State Bank of India, Surat Branch and was sent to the clearing and forwarding agent for payment of custom duty. Unfortunately the Income-tax Department raided the premises of their agent Mr. Kiritbhai Salod and along-with other documents, taken possession of this draft also since Mr. Salod had not presented the draft to the Assistant Collector of Customs and, therefore, for a very long time stalemate was created and the complainant could not produce the draft and get the money from the Bank.

SINCE it was necessary to understand as to why the monies have been seized by the Income tax Department, the opponents No. 2 and 3 were added as party opponent and Mr. Bhatt appeared for these opponents and after considering the case of the complainant the Income-tax Department agreed to return the draft and filed written statement in which they have stated that the Department had no objection if the amount is given to the complainants. This position having been cleared and on getting no objection from the Income-tax Department the Bank has made full payment of the draft of Rs. 2,36,498/- to the complainant No. 2 on 20.5.92. Having obtained this relief of getting the principal amount, now the complainants are insisting that since the Bank has kept this amount for a period of 2 years and 10 months the Bank should pay interest @ 18% at least after 6 months from the date of issue of the draft because the draft will be ceased to be payable after a period of 6 months unless the same is revalidated and in the instant case there is no case of any party that the draft was ever revalidated.

We have persuaded Mr. Desai, the learned Advocate appearing on behalf of the opponent No. 1 to consider the demand of the complainant but Mr. Desai states that it is not possible for his client to make any payment on account of their policy; the reason being that there are so many cases in which such type of situation arises and if they make payment in one case then they will have to make payment in all cases.

MR. Desai states that the complainant No. 1 is the owner of the amount and complainant No. 2 is the person who made the payment to the Bank and obtained the draft under his own signature. In any case, MR. Trivedi, the learned Advocate appearing on behalf of the complainants says that either complainant No. 1 or complainant No. 2 is entitled to interest not on the ground of any contract between the parties but on the principle that the Bank has utilised this money for a long period and at least after six months when the Bank knew mat the draft could not be presented because either the same was lost or attached by the Income-tax Department, the Bank was free to utilise the said money and on principle when the Bank has made use of the money, the Bank should pay interest. Mr. Desai, however, argues that the Bank has, no doubt, undertook to serve the customer by making arrangements for the payment at Kandla when the draft is presented. The Bank cannot make payment unless the draft is returned or presented before the Kandla branch for payment. In the instant case neither the draft was presented at Kandla branch nor the same was presented at Surat-issue bank either for payment or for revalidation. Therefore the bank could not make any payment. He also argues that when the draft is actually lost and if the Bank is satisfied, after taking bond the Bank can, no doubt, issue another draft or may return the money. But in this case there was no case before the Bank that the draft is lost. Subsequently, the case was made out when the draft has been seized by the Income-tax Department and in that circumstance it was not possible for the Bank to make payment without the draft being presented or without the assurance of the Income-tax Department that the same has been released, or the same is not required. Mr. Desai states that as soon as such a statement was made the Bank made the payment on 20.5.1992 to complainant No. 2. Therefore according to Mr. Desai no question arises regarding Rules 25, 26 & 27 in this case since the draft has never been reported to be lost. On the contrary there is evidence that the draft was seized by the Income-tax Department and when the NOC was received the Bank has made the payment.

THE next issue that arises for our consideration is whether the Bank should be made liable for the interest on the principle that they have utilised this money, must have earned interest and, there fore, on equitable principles should give interest to the complainants. It is true that the Bank has undertaken the services to make payment at Kandla on presentation of the draft and, therefore it cannot be said that there was any deficiency in services of the Bank. However, it is equally true that when the money has been utilised by the Bank, the Bank should be gracious to return the advantage it has received on account of use of money of the complainants. However, we have no evidence to show that the Bank has utilised this money and earned interest. But that does not mean it should not pay. If the Bank has earned interest over this money, we feel that the Bank should come out voluntarily to re-imburse the complainants after keeping certain margin of this earning. But we are helpless to pass any order compelling the Bank to make payment of any interest in absence of evidence that the Bank has earned interest. Generally, everyone thinks that if the money is deposited and kept in the custody of the Bank, Bank has the opportunity to earn interest Whether they have kept this money in lock and key for the benefit of the complainant or whether they have utilised this money of the complainant is within the knowledge of the Bank only and in the absence of evidence we do not intend to pass any order. However, we are of the opinion that the Bank is a Nationalised Bank and has been created to serve the clients better than the private operators. If this principle is accepted the Bank should return some earning to the complainants if they have actually earned interest from the use of complainant''s money. We have, therefore, to rely upon the sincerity and bona fide of the Bank and we have no doubt that the Bank will definitely come out to make at least ex-gratia payment if the Bank has earned interest from this amount. Except the aforesaid observation we are unable to grant any relief to the complainants. We appreciate the promptness shown by Mr. Bhatt in convincing the Income-tax Department to make the payment immediately to the complainant though the complainant had not filed any application under section 132(h) of the Income-tax Act ORDER The complaint is therefore dismissed. In the circumstances there will be no order as to costs. Complaint dismissed.