State Bank of India Vs. Vathi Samba Murty - Court Judgment

Excerpt:

.....of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot be entertained i.e. cannot be admitted for consideration unless the statutory deposit is made and for this purpose the court has the discretion either to grant time to make the deposit or not. no formal order condoning the delay is necessary, an order of adjournment would suffice. the provisions of limitation embodied in the substantive provision of the sub-section (1) of section 173 of the act does not extend to the provision relating to the deposit of statutory amount as embodies in the first proviso. therefore an appeal filed within the period of limitation or within the extended period of limitation, cannot be admitted for hearing on merit unless the..........goswami v. gauhati bank limited) and held that in absence of the original ledger account no decree can be granted. the appellate court found as a fact that the money was given from the personal account. but it confirmed the dismissal of the suit. it is not disputed by the defendant in this court that the amount has been drawn by him from his personal account, and that he issued the cheque in respect of his personal current account where no sufficient fund was available. he only stated that the money should have been adjusted from the partnership account.5. for drawal of money from an account any cheque cannot be issued. it is only the cheque relating to that account wherefrom money is to be drawn is to be issued. cheque of one account cannot be used in respect of another account even though the same person may be having two accounts. accordingly, having drawn money from his personal account where sufficient funds were not available to honour the cheque, the defendant shall have the liability to pay back the amount since it is not a gift by the bank. both the courts went wrong in law in dismissing the suit in respect of the principle amount of rs. 2,000/- drawn by the.....

Judgment:

ORDER

S.C. Mohapatra, J.

1. Plaintiff is the petitioner against an appellate judgment confirming the decision of the trial court. In view of bar of a second appeal under Section 102 of Civil P.C. this civil revision has been filed.

2. The case of the plaintiff is that the defendant drew Rs. 2,000/- on the basis of a cheque from his personal account although he had no funds available in that account for which the overdrawal was permitted. In spite of demand, the same not having been repaid, the suit was filed for recovery of Rs. 2,000/-as principal amount and Rs. 979.39 paise towards interest.

3. The case of the defendant is that he had two accounts in the bank. One current account was in his own name and the other current account was in the name of the partnership firm of which he was a partner, His case was that in the partnership account there was enough money and the amount was really intended to he drawn from that account and there was no necessity for permitting the overdrawal from his own account where there was no money.

4. The trial court applied the principle decided in the case reported in AIR 1967 SC 1058 (Chandradhar Goswami v. Gauhati Bank Limited) and held that in absence of the original ledger account no decree can be granted. The appellate court found as a fact that the money was given from the personal account. But it confirmed the dismissal of the suit. It is not disputed by the defendant in this Court that the amount has been drawn by him from his personal account, and that he issued the cheque in respect of his personal current account where no sufficient fund was available. He only stated that the money should have been adjusted from the partnership account.

5. For drawal of money from an account any cheque cannot be issued. It is only the cheque relating to that account wherefrom money is to be drawn is to be issued. Cheque of one account cannot be used in respect of another account even though the same person may be having two accounts. Accordingly, having drawn money from his personal account where sufficient funds were not available to honour the cheque, the defendant shall have the liability to pay back the amount since it is not a gift by the bank. Both the courts went wrong in law in dismissing the suit in respect of the principle amount of Rs. 2,000/- drawn by the defendant.

6. There is no material on record that the defendant requested for overdrawal. There is no general agreement that in absence of request also, overdrawal may be permitted. If there was no money available, the banker should have dishonoured the cheque unless specifically requested by the defendant for permitting overdrawal. If the banker of his own permitted overdrawal, he has no right to claim interest. However, a person getting benefit is required to compensate for the benefit rendered to him. In the absence of any statutory provision relating to payment of interest on overdrawals, it is a matter for the court to consider the reasonable rate at which interest can be granted.

7. It is a common knowledge that business of a banker is to advance loans and there are varying types of interest in respect of different types of loans. Similarly for receiving deposits the bankers give interest of different rates in respect of different types of deposits. Mr. S. N. Sinha, the learned counsel for the petitioner, cited a decision of the Bombay High Court reported in 1985 Bank J. 450 : (AIR 1985 Bom 432) (Bank of Maharashtra v. United Construction Co.) where it was held that drawal of overdraft even without any express grant of an overdraft facility by honouring the cheque would make the depositor who drew the amount bound to make good the loan to bank with reasonable interest. I am satisfied that the rate of interest should be 7% per annum. Therefore, the defendant should compensate the bank for the benefit rendered to him by paying interest at the rate of 7% from the date of drawal till the payment is made on the amount of Rs. 2,000/-.

8. In the result, this civil revision is allowed, decisions of both the courts below are set aside and the suit is decreed partly to the extent of Rs. 2,000/- towards principal amount and interest at 7% from the date of drawal till the date of recovery or payment. Parties shall bear their own costs throughout.