Om Prakash vs Dena Bank

Indermeet Kaur, J.—This appeal has impugned the judgment and decree dated 28.07.2006 which had reversed the finding of the trial judge. The trial judge vide judgment and decree dated 13.07.2004 had decreed the suit of the Plaintiff in the sum of Rs. 16,800/-along with interest. The impugned judgment had dismissed it. It was held that the suit was barred by limitation.

The case of the Plaintiff is as evident from the averments in the plaint are that on 22.08.1980, Plaintiff had deposited a sum of Rs. 10,000/- with the Defendant in a fixed deposit. It was for a period of 63 months. SDR dated 22.08.1980 was issued in favour of the Plaintiff; maturity date was 22.11.1985. Contention of the Plaintiff was that this SDR had been deposited against the over draft limit availed by M/s Ellora Industries. There was no amount over-due against this sanctioned limit to M/s Ellora Industries. However, the Defendant did not return the FDR amount to the Plaintiff. Further, contention of the Plaintiff is that he had opened a saving bank account No. 12031 with the Defendant and had asked them to credit the matured amount of the SDR to the said account. Defendants did not take any action. Legal notice dated 15.07.1993 was served upon the Defendants. Defendants paid no heed. Suit No. 565/1993 had been filed by the Plaintiff; after the filing of the said suit, the Defendants had approached the Plaintiff for the settlement and an assurance was given by the Defendants and on 26.09.1994, the Plaintiff learnt that the Defendant No. 1 had credited an amount of Rs. 16,800/- in his saving account. The interest amount was withheld illegally. Notice dated 01.09.1997 was served upon the Defendants. Present suit was accordingly filed.

The Defendants have contested the proceedings. It was stated that the first suit filed by the Plaintiff was dismissed on 20.09.1995; present suit is barred. Plaint is liable to be rejected; there was no arrangement between the parties to pay any interest on the maturity of the SDR. Admittedly, the SDR amount has since been paid.

On the pleadings of the parties, following four issues were framed:

Whether the suit of the Plaintiff is barred by the principle of res judicata ? OPD

Whether the suit of the Plaintiff is barred by limitation? OPD

Whether the Plaintiff is entitled to the suit amount as prayed for? OPP

Relief.

Oral and documentary evidence was led. On the basis of the oral and documentary evidence led by the respective parties, the suit of the Plaintiff was decreed by the trail judge.

The impugned judgment has reversed this finding. The impugned judgment had noted that the claim of the Plaintiff is based on the SDR of Rs. 16,800/- of which admittedly the maturity date was 22.11.1985. It was noted that in the earlier suit i.e. suit No. 565/1993, a legal notice dated 16.12.1985 (ex. DW 1/P2) had been sent by the Plaintiff to the Defendant demanding the maturity amount of Rs. 16,800/- along with interest. Impugned judgment had noted that the cause of action in the first and the second suit is the same. In the first suit, the Plaintiff had claimed the maturity amount of Rs. 16,800/- along with interest. In the second suit i.e. the present suit which has been filed on 25.09.1997, since the maturity amount of Rs. 16,800/- already stood paid, only the interest was claimed. The cause of action had arisen on 22.11.1985 i.e. the date of the maturity amount and at best on 16.12.1985 when a clear averment had been made in the notice dated 16.12.1985 (ex. DW1/P2) that the aforenoted amount of Rs. 16,800/- along with the interest is due and payable to the Plaintiff. Suit filed by the Plaintiff on 25.09.1997 is time barred.

This finding in the impugned judgment is extracted herein below and reads as under:

Prior to the institution of the 1st Civil Suit admittedly Respondent got issued demand notice dated 16.12.1985 Ex. DW-1/P2 inter-alia to the Appellants. In paragraph 3 and the penultimate paragraph of the said notice Respondent stated as follows:

That the account of you the addressee No. 3 has been adjusted in to with you the addressees No. 1 and 2 and there does no remain to be any dues with you the addressee No,. 3 and as such my aforesaid client time and again requested you the addresses No. 1 & 2 to return the said SDR but you failed to pay any heed. On its maturity on 22.11.1985 my aforesaid client requested you the addressee No. 1 and 2 to pay the maturity value of the said SDR amounting to Rs. 16,800/- but you have failed to pay any heed and as such are liable to pay interest on the said maturity amount of Rs. 16,800/- @ 24% per annum for illegally withholding the said amount, which is also according to the terms of agreement and/or market rate, trade, usage and customs.

I therefore, hereby call upon you the addressees No. 1 and 2 to pay the aforesaid amount of Rs. 16,800/- together with interest @ 24% per annum to my aforesaid client within 3 days of the receipt hereof; failing with I have the instructions to take such action as may be advised under the law for getting the needful done at your costs, risks and responsibility.

So on a perusal of the aforesaid paragraph of Ex.DW-1/P2 dated 16.12.1985 it is clear that cause of action for recovery of maturity amount of Rs. 16,800/- along with interest arose in favour of Respondent at least w.e.f. 16.12.1985 since as per his own admissions account of the said M/s Elora Industries, already stood cleared.

It appears that after issue of the said notice Ex. DW-1/Plaintiff No. 2 dated 16.12.2005 Respondent did not pursue the matter and got issued another demand notice dated 15.07.1993 i.e. after about 8 years and instituted the 1st Civil Suit in 1993. Respondent himself placed before Ld. Trial Court certified copy of the plaint of the 1st suit and paragraphs 7, 9 and 10 thereof read as follows:

That at present the following amount is due from Defendants No. 1 and 2 to the Plaintiff:

i) Proceeds of the Fixed Deposit Receipt Rs. 16,800.00 No. 612462

ii) Damages/interest on Rs. @24% p.a. Rs. 31,615.00 w.e.f. 22.11.1985 to 25.09.1993 Total Rs. 48,415.00

That the cause of action arose on or about 22.08.1980 when the Plaintiff deposited a sum of Rs. 10,000/- with Defendants No. 1 and 2, and the said Defendants issued the Fixed Deposit Receipt in question, undertaking to pay a sum of Rs. 16,800/-on 22.11.1985. The cause of action also arose when the Plaintiff deposited the said F.D.R. with Defendants No. 1 and 2 in the account of Defendant No. 3 as security. The cause of action also arose when the account of Defendant No. 3 stood fully adjusted, and the F.D.R. in question became free from any lien or charge of Defendants No. 1 and 2. The cause of action also arose on 22.11.1985 when the F.D.R. in question became due payable to the Plaintiff. The cause of action lastly arose when after the service of notice dated 15.07.1993 Defendants No. 1 and 2 failed and neglected to pay the dues of the Plaintiff. The cause of action still continues as the dues of the Plaintiff stands (sic) unpaid so far. 10. That it is submitted that the suit is within time, as the Fixed Deposit amount remains in trust with Defendants No. 1 and 2, and u/s 10 of the Limitation act, no limitation is prescribed for the same. Even otherwise the suit is within time on the basis of the demand made vide notice dated 15.07.1993.

So even as per Respondent''s own admission cause of action for recovery of maturity amount of Rs. 16,800/- and interest thereon accrued in 1985, It is admitted that 1st Civil Suit was filed in 1993. Admittedly this 1st Suit was dismissed in default on 20.01.1995 as per the certified copy of the relevant order passed therein. The Respondent did not get the said 1st suit revived. Also admittedly Appellants credited a sum of Rs. 16,800/- in the savings Bank Account of Respondent on 26.09.1994 and it was after this that the 1st Civil Suit got dismissed in default on 20.01.1995. So this 1st Suit itself was barred by limitation. Mere transfer of Rs. 16,800/- on 26.09.1994 i.e. after period of 9 years would not give rise to any fresh cause of action to the Respondent. Taking shield of Section 10 of the Limitation Act, 1963, Respondent could not file 2nd suit in 1997. Even otherwise Section 10 applies to trusts created for any specific purpose. A banker and a customer do not stand in the relation of trustee and cestui que trust but only as depositee and depositor. (Refer Ishur Chunder v. Jibun, 16 Cal. 25). This finds a mention in the Commentary in the Nineteenth Edition of .B.B. MITRA on The Limitation Act, 1963. on page 181. Also mere issue of notice dated 01.09.1997. Ex.DW-1/P5 could not give rise to any cause of action for filing the 2nd Civil Suit In my view period of limitation is governed by Article 28 of Limitation Act, 1963. This article relates to a single bond where the day is specified for payment. According to this article period of limitation is 3 years and the time from which the said period begins to run is the day so specified in the bond. The other relevant article appears to be Article 22. It relates to money deposited under an agreement that it shall be payable on demand including money of a customer in the hands of his banker. Period of limitation is 3 years and the same begins to run when the demand is made. This has been so mentioned in the aforesaid treatise on page 494 thereof in relation to discussion of Article 22.

In the case in hand as per Respondent''s own admission the SDR in question was payable on 22.11.1985 and as such the period of limitation of 3 years began to run from the said date or in any case w.e.f. 16.12.1985 when Ex. DW-1/P2 was got issued by the Respondent to the Appellants.

There is no perversity in this finding. It calls for no interference.

The alternate argument raised by the learned Counsel for the Appellant that this amount had been paid by way of a trust and falls within the encompass of Section 10 of the Limitation Act had also been dealt with in the impugned judgment as aforenoted and was rightly rejected.

The first suit filed by the Plaintiff had been dismissed in default on 20.09.1994. During the pendency of this suit i.e. on 27.09.1994, the maturity amount of Rs. 16,800/- had been credited in the saving bank account of the Plaintiff. Impugned judgment had correctly noted that this transfer of the sum of Rs. 16,800/- on 26.09.1994 in the account of the Plaintiff did not give rise to a fresh cause of action; shield of Section 10 of the Limitation Act for filing the second suit was not available. There is also no such averment in the plaint that this amount of Rs. 10,000/- had been deposited by the Plaintiff by way of a trust.

Reliance by the learned Counsel for the Appellant on the judgments reported in ILR Vol.22 The Official Assignee of Madras v. G. Smith, 1979 All.L.J.880 Shanti Prasad Jain Vs. The Director of Enforcement, Shanti Prasad v. Director of Enforcement are all misplaced. The first judgment states the relationship between a banker and its customer is that of a creditor and debtor; no fiduciary relationship will be created in the absence of directions by the customer which converts the banker into a trustee in respect of the sums so paid; there is no such pleading in the present plaint. Defendant/Dena Bank, in this scenario, by no stretch of imagination can be stated to be a trustee. The second judgment is also distinct on facts. In this case, the court had held that where the bank had returned the amount to the depositor within 6 years of date of maturity; it would not amount to the payment of a time barred debt; the amount of the fixed deposit remains in trust with Bank. In this case what the Plaintiff is asking for is the interest on the principal amount of the FDR the principal has admittedly since been paid. The last judgment of Shanti Prasad (supra) recites the principle that the relationship between a banker and the customer is that of a debtor and creditor and not of a trustee except where there is special arrangement. No such special arrangement has been pointed out.

This is a second appeal it has been admitted and on 05.03.2007, the following three substantial questions of law were formulated:

Whether the suit filed by the Appellant is barred by time?

Whether the bank was keeping the amount of the Appellant in the capacity of a trust and if so, what is its affect?

Whether the Appellant is entitled to 24% of the interest?

In view of the aforenoted discussion, the questions are answered as follows:

Suit of the Plaintiff is time-barred.

The amount kept by the Appellant in the bank was not in the nature of the trust.

The suit of the Plaintiff being barred, question of payment of interest does not arise.

All the aforenoted substantial questions of law are decided against the Appellant and in favour of the Respondent. There is no merit in the appeal. Dismissed.