Syndicate Bank vs Sri Devdas Rao

Satyanarayana, J.—Unsuccessful plaintiff in OS. No. 751/1999 on the file of XXIX Additional City Civil Court, Bangalore, has come up in this first appeal impugning the judgment and decree dated 15.9.2006 passed therein. 2. Brief facts leading to this first appeal are as under. Appellant herein is a nationalised bank having one of its branches at Gandhi Nagar, Bangalore-9. The present suit is filed by the Manager of said Bank for recovery of certain arrears said to be due from respondent herein under four different loan accounts in his name.

The facts which are not in dispute in this proceedings are that, the respondent herein was an officer of appellant bank. Prior to 15.6.1989 he was working as Deputy Divisional Manager. That certain allegations were there against respondent, in that behalf notices were issued to him calling for explanation, which resulted in respondent resigning from his post in the appellant bank w.e.f., 15.6.1989. While respondent was in service, he had availed the aforesaid four loan facilities in the following manner:

1) house loan under account No. HL 4718

2) vehicle loan under OSL (V) 201/86

3) personal loan in account No. DLSTF. 308/86 and

4) over draft facility in account No. SOD. 1456/86.

It is stated that respondent was not having any other account in the appellant bank except overdraft account in SOD. 1456/1986. After respondent resigned from service the provident fund amount due to him in a sum of Rs. 79,209.29 and gratuity amount which was due to him in a sum of Rs. 48,750/- were credited to his only account bearing No. SOD. 1456/1986. From out of said balance, the loan amounts due by the respondent to the appellant bank in a sum of Rs. 53,274/- under vehicle loan, Rs. 34967/- due under personal loan, Rs. 28025.91 due under overdraft account and Rs. 11682.38 due and outstanding in housing loan account were adjusted. That even after adjustment of all these amounts, an amount of Rs. 98,404.32 was still due and outstanding to appellant Bank from the respondent.

The aforesaid adjustment by appellant bank without concurrence of respondent was objected to by him. In that behalf, he lodged a complaint against appellant Bank before Banking Ombudsmen. Simultaneously writ petition was also filed by him in WP. No. 15576/1989 challenging withholding of documents of title of respondent''s property as security for the outstanding amount alleged to be due to bank. He also filed another writ petition in W.P. No. 15647/1989 challenging the right of appellant to adjust the amount standing to his credit in his overdraft account towards alleged loan due from him. The writ petitions were defended by appellant herein. Ultimately, writ petition in W.P. No. 15576/1989 came to be allowed, wherein the learned Single Judge of this Court observed that action of appellant bank, its General Manager, the Custodian Employees Provident Fund and as well as the Custodian of Gratuity Fund were not justified in making payment of said amount to appellant bank and appellant bank in adjusting the same against the alleged loan due from respondent is arbitrary.

In the order passed in said writ petitions direction was also issued to respondents 3 and 4 therein who are Custodian of Employees Provident Fund and Gratuity Fund to settle the statutory claims of respondent within two months from the date of receipt of copy of the order in the said proceedings. Further, it was also made clear in the said orders that the orders will not preclude respondents 1 and 2 therein from recovering the direct and indirect liabilities due from respondent subject to Limitation Act. That against the order passed by learned Single Judge in W.P. No. 15576/1989, an appeal came to be filed by the appellant herein in W.A. No. 3568/1998, which was subsequently withdrawn on the ground that appellant herein had already filed the present suit for recovery of dues, wherein all the contentions urged in the writ appeal are pleaded.

Coming to the original suit filed for recovery, immediately after the order of learned Single Judge in W.P. No. 15576/1989 appellant herein repaid the entire amount to respondent due under provident fund and gratuity fund. Thereafter, appellant initiated the proceedings for recovery of amount paid by appellant bank to respondent on 30.9.1998 and 17.11.1998 along with interest at 12% on the aforesaid amount from respective dates till date of suit and also for recovery of certain amounts paid on 30.7.2000.

In the said suit, respondent herein who is defendant in said proceedings admitted the respective amounts stated in paragraph 8 of plaint. It is further stated by him that said amounts were the amounts due to him in respect of his provident fund, gratuity fund and other terminal benefits and said amount is paid by virtue of the order passed in W.P. No. 15576/1989 confirmed in W.A. No. 3568/1998. However, he denied the liability to pay said amount as it was not the amount which was borrowed by him. In the written statement he also admitted that he had borrowed certain amounts from appellant bank but his liability to pay a sum of Rs. 53,274/-, Rs. 34,967/-, Rs. 28025.91 and Rs. 11,682.38 in respect of the aforesaid four accounts was denied. He also took up a contention that plaint did not furnish the date on which said amounts came to be due.

The respondent accepted his liability to clear whatever amounts that were due to appellant bank from him as on the date of his resignation, which was accepted on 6.3.1989. However, he contended that the right to seek recovery of the same came to be barred by law of limitation on 5.3.1992. Therefore, there was no cause of action available to appellant Bank for recovery of said sum. It is also contended that in terms of the pleadings, what is now sought to be recovered is not the amounts which are due under the loan accounts, but it is the amount which were paid to him by appellant Bank pursuant to the order of this Court passed in W.P. No. 15576/1989. It was further contended that when there is already an averment by bank in the earlier round of litigation to the effect that loan accounts were closed and amounts were adjusted, the appellant bank has no right to reopen the same. Therefore money claimed in the suit is without basis.

With the aforesaid rival pleadings on record the trial Court proceeded to frame in all five issues as under:

Whether the plaintiff bank proves the availment of credit facilities by the defendant on executing several documents as referred to in the plaint?

Whether the plaintiff bank is entitled to get back the amounts paid to the defendant on 30.09.1998 and 17.11.1998 as contended?

Whether the suit is not maintainable as contended?

Whether the suit is barred bylaw of limitation?

Whether the plaintiff bank is entitled to recover the suit claim?

Thereafter, the court below proceeded to record evidence. On behalf of plaintiff Senior Branch Manager of plaintiff bank was examined as PW.1 and another J. Ravishankar Rao, Manager of plaintiff bank was examined as PW.2. In support of their case they have produced in all 46 documents marked as Exs. P1 to P46. On behalf of defendant, defendant examined himself as DW.1 and he produced only one letter vide Ex. D1.

On appreciation of the pleadings, oral and documentary evidence available on record the court below proceeded to answer issue Nos. 1, 3 and 4 in the affirmative and issue No. 2 in the negative and consequently dismissed the suit for recovery. Issue No. 1 regarding credit facilities being extended by plaintiff Bank to defendant on execution of documents as referred to in the plaint, held to be proved. So far as other three issues are concerned, 2nd issue regarding bank''s entitlement to recover the money paid to defendant on 30.9.1998 and 17.11.1998 is answered in the negative. So far as 3rd issue framed regarding maintainability of suit is answered in the affirmative and the 4th issue regarding suit being barred by limitation, is held in the affirmative, in favour of defendant and against the plaintiff Bank. Being aggrieved by the finding of trial Court on issues No. 2 and 4, present appeal is filed.

In the light of grounds urged in appeal with reference to finding on issue Nos. 2 and 4 in the original suit, this Court find that the following points arise for consideration in this appeal:

Whether the finding of court below on issue Nos.2 and 4 in the original suit is sustainable or does it call for interference by this Court?

What order?

Heard the Counsel for appellant and respondent. On reappreciation of pleadings, oral and documentary evidence available on record in the light of the finding of court below on issue Nos.2 and 4, this Court answer the point for consideration in the negative for the following:

REASONS

Admittedly, the claim of appellant bank against respondent is that the suit is filed for recovery of money said to be due under various loan accounts, to be precise, housing loan, overdraft facility, vehicle loan and personal loan. Admittedly, none of those loans were extended to respondent either on 30.9.1998 or 17.11.1998. So far as these four loan accounts are concerned, they were admittedly closed in the year 1989 itself after retirement of respondent from appellant Bank. In the said year, the aforesaid loan accounts were adjusted against the funds available to the credit of respondent in his over draft account and the major portions of loans were cleared in that year. It is further admitted that amounts sought to be now recovered is what was paid to respondent on 30.9.1998 and 17.11.1998, which were legitimately due to respondent from appellant Bank under provident fund, gratuity fund and other statutory liabilities on his retirement from service. Therefore, the very basis on which suit is initiated, is wrong.

Now coming to aforesaid four loans, though much has been said, certified copies of extracts of said accounts are not produced by bank, as required under law. The extracts that are produced do not disclose the reversal of entries subsequent to the order passed in W.P.No. 15576/1989. Therefore, the loan accounts, which were adjusted against the terminal benefits of respondent in the year 1989 is not properly revived as contended in the suit. The said loan accounts were not reversed by making an appropriate entry and interest is not calculated thereon and the said amount is not truly reflected in Exs. P39, 40, 42 and 43, the ledger extracts of the alleged loan amounts due from respondent. In that view of matter the finding of court below on issue No. 2, is unassailable.

So far as issue No. 4 is concerned, since reversal of entry is not properly made and the accounts not being revived, the question of filing suit in respect of loan transaction which is closed in the year 1989 itself does not arise. Therefore, on going through the impugned judgment and the reasons given therein this Court find there is no justifiable reason to hold that finding of trial Court on issue No. 4 is bad in law.

Infact, the counsel for appellant tried to substantiate its case by producing the following judgments:

State Bank of India v. Ramayanapu Krishna Rao and others, reported in AIR 1995 ORISSA 244.

Arunachalam Pillai v. M. Velamma and others, reported in AIR 1968 Madras 226.

Jaswant Sugar Mills Ltd., Meerut, v. Naubat reported in 1070 LAB. I.C. 701.

Incidentally, all these judgments are in respect of Section 9 of the Limitation Act, which deals with revival of liability. As stated supra, revival of liability of respondent is not properly done by appellant Bank, inasmuch as, what is sought to be recovered is not the loan amount as could be seen from paragraph 8 of plaint. On the contrary, what is sought to be recovered in the original suit is the amount, which is paid by appellant Bank to respondent on various dates pursuant to the order passed in W.P.No. 15576/1989.

Infact, the cause of action in the prayer portion clearly discloses that the amounts sought to be recovered are totally different from the amounts said to be due from respondent. So far as alleged due, there is an averment by appellant bank that said amounts are due against the loan availed by the respondent and the same was adjusted from out of the money due to respondent by appellant way back in 1988-89. If once said accounts are closed revival of the same can only be done by following the procedure required in that behalf. In the instant case, accounts extracts, which are at Exs. P39, 40, 42 and 43 do not disclose revival of accounts in the manner known to law. The balance shown in these accounts are amount due as on 1988-89. In that view of matter, the finding of trial Court on issue No. 4 that there is no limitation to file the suit for recovery of amount due under the aforesaid loan account, is just and proper. Therefore, the contention urged by appellant that said loan accounts are revived is without basis.

When the fact of revival of these accounts is not established, question of looking in to aforesaid judgments to support or substantiate the claim of appellant bank about limitation does not arise. In that view of matter, this Court feel there is no justifiable reason to interfere with the well reasoned judgment and decree passed by the court below in OS. No. 751/1999. Accordingly, first appeal is dismissed. The judgment and decree dated 15.9.2006 passed in OS. No. 751/1999 on the file of XXIX Additional City Civil Judge, Bangalore, is confirmed. No order as to costs.