| SooperKanoon Citation | sooperkanoon.com/951835 |
| Court | Allahabad High Court |
| Decided On | Jul-07-2011 |
| Case Number | WRIT C Nos. 39 of 2008 & 165 of 2008 |
| Judge | SUDHIR AGARWAL |
| Appellant | State Bank of India |
| Respondent | Om NaraIn Agrawal and Others |
SUDHIR AGARWAL, J.
1. Both the aforesaid writ petitions under Article 226 of Constitution of India have been filed by State Bank of India (hereinafter referred to as "SBI") aggrieved by the order dated 19.04.2002 passed by Debt Recovery Tribunal, Allahabad (for short 'DRT'), dismissing TA No. 11/2000, State Bank of India Vs. Om Narain Agrawal and 11/2002, Om Narain Agrawal Vs. Regional Officer, State Bank of India and another and the Appellate order dated 04.10.2007 passed by Debt Recovery Appellate Tribunal, Allahabad (for short 'DRAT') dismissing two Appeals no. R167/ 02 and R465/ 04 filed by SBI.
2. The facts giving rise to the present dispute are as under.
3. It is alleged that respondent no.1 Om Narain Agrawal s/o Late Shanti Swaroop Agrawal, resident of Seth Kali Charan Road, Shahjahanpur opened a current account no. 2870 on 03.09.1991 at Kashi Nath Seth Bank Ltd (hereinafter refer to as 'KNSB') having its registered office at Kali Charan Road and central office at Bahadur Ganj Shahjahanpur. He withdrew a huge amount as overdraft from the aforesaid account through nine cheques as under:
| S. No. | Date | Cheque No. | Amount in Rs. |
| 1. | 03.09.1991 | 107124 | Rs.1,75,000.00/- |
| 2. | 23.01.1992 | 000012 | Rs.12,15,000.00/- |
| 3. | 11.03.1992 | 000013 | Rs.5,00,000.00/- |
| 4. | 3.03.1992 | 000014 | Rs.1,51,100.00/- |
| 5. | 04.04.1992 | 000015 | Rs.12,00,000.00/- |
| 6. | 08.05.1992 | 000016 | Rs.2,00,000.00/- |
| 7. | 18.01.1993 | 000018 | Rs.12,50,000.00/- |
| 8. | 01.02.1993 | 000017 | Rs.9,50,000.00/- |
| 9. | 03.04.1993 | 000019 | Rs.10,00,000.00/- |
| Total (Rs.) | Rs.66,41,100.00/- |
4. Since a huge debit balance was shown in the aforesaid account a legal notice dated 28.09.1994 was served by KNSB upon respondent no.1, requiring him to settle entire amount but he failed. Consequently KNSB filed Suit No. 268 of 1995 against respondent no.1 for recovery of Rs. 61,75,000/alongwith interest of 21.75 percent per annum. The aforesaid Suit was filed in the Court of Civil Judge (Senior Division), Shahjahanpur. However, even earlier to filing the aforesaid suit by KNSB, respondent no.1 himself filed O.S. no. 380 of 1994 in the Court of Civil Judge (Senior Division) Shahjahanpur, seeking a permanent injunction, restraining SBI from recovering Rs. 42,09,163.86 from him. The respondent no. 1 on 02.05.1998 filed an application under Section 10 CPC in O.S. No. 268 of 1995, requesting for stay of proceedings since the aforesaid suit was liable to be transferred to the Banking Tribunal at Jabalpur. The aforesaid suit however, was transferred to DRT, Allahabad after the enforcement of Recovery of Debts Due to Banks and Financial Institution Act, 1993, (hereinafter refer to as "1993 Act") and registered as T.A. no. 11/2000. The Bank moved an application before DRT, Allahabad, praying that since the suit filed by respondent no. 1 also relates to the same cause of action, in view of Section 31 of 1993 Act, record of aforesaid suit be also summoned from Civil Judge (Senior Division). Consequently the aforesaid suit also stood transferred to DRT and registered as T.A. no. 11/2002.
5. Respondent no.1 in his written statement filed before DRT in the Bank's suit averred that he had never opened any account nor had withdrawn any amount, alleged as overdraft facility, and is not liable to pay the amount sought to be recovered from him. He said that there were three current accounts with the aforesaid Bank in the name of M/S Agrawal Sales Corporation, M/S Uma Sales Corporation and M/S Sudha Sales Corporation. Respondent no.1 had not opened any account bearing current account no. 2870 on 03.09.1991 or any other date whatsoever.
6. The Bank got an affidavit of Sri P.D. Gupta the then Bank Manager, and, Sri S.B. Bajpai, filed before DRT in evidence to prove its case. These two officials were also examined before Tribunal.
7. The following five issues were framed before DRT:
i. Whether the Kashi Nath Seth Bank sanctioned the over draft facilities to the defendant as alleged by the applicant Bank?
ii. Whether the defendant obtained the said over draft facility from the plaintiff Bank?
iii. Whether the defendant utilized the said facility granted by the Bank as alleged?
iv. Whether the suit is barred by time as alleged by the defendant?
v. Whether the plaintiff Bank is entitled to recover the relief claimed from the defendant?
8. The DRT held that the Bank had failed to prove that account no. 2870 was opened by respondent no.1 and he withdrew the amount as alleged by the plaintiff. In view thereof, the suit filed by the Bank was dismissed and the suit of respondent no.1 was decreed vide common judgment dated 19.04.2002.
9. The Bank preferred two Appeals no. R167/ 02 and R465/ 04, which have been dismissed by DRAT vide the order dated 04.10.2007 impugned in the two writ petitions.
10. Sri G.P. Agarwal has appeared and advanced his submissions on behalf of petitioner Bank and Sri R.P. Agrawal has appeared and advanced his submission on behalf of respondent no.1.
11. Sri G.P. Agarwal, learned counsel for petitioner Bank vehemently contended that the approach of Tribunals at both the stages is absolutely misconceived. They have failed to appreciate the very concept of initial onus in the matters like the present one and had misdirected themselves in decreeing the suit of respondent no.1 and dismissing the suit of Bank by placing wrong onus on the Bank and have also not appreciated the matter in its correct perspective. He also placed reliance on the decisions of the Apex Court in Anil Rishi V. Gurbaksh Singh, AIR 2006 SC 1971; Hero Vinoth (minor) VS. Seshammal, AIR 2006 SC 2234; Bharat Barrel and Drum manufacturing Company Vs. Amin Chand Pyarelal, AIR 1999 SC 1008; State Bank of India Vs. Yumnam Gouramani Singh, AIR 1994 SC 1644; Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand Payrelal AIR 1999 SC 1008; Canara Bank Vs. Canara Sales Corporation and others AIR 1987 SC 1603.
12. He also contended that under 1993 Act neither the suit filed by a party against the Bank could have been transferred to DRT nor could have been decided under the said Act. He supported his contention by placing reliance on Apex Court's decision in Indian Bank Vs. A.B.S. Marine Products Pvt. Ltd. AIR 2006 SC 1899.
13. On the contrary, Sri R.P. Agarwal, learned counsel for respondent no.1 contended that his suit was transferred at the instance of the Bank before DRT and no such objection was raised by the Bank at any stage, hence the question whether respondent no.1's suit could have been transferred and decided by DRT cannot be allowed to be raised for the first time in this writ petition. He also submitted that in any case, respondent no.1's suit could have been treated to be a counter claim and, therefore, with the consent of the parties, it could have been decided by DRT along with the suit of the Bank since both the matters involve inextricably connected issues and one would have direct bearing on the other. Common documents and evidence were involved and findings in one would certainly affect the other also. He further contended that the entire writ petition has been drafted, pleaded and argued like a first appeal though the scope of judicial review under Article 226 read with Article 227 of Constitution of India over the judgments of Tribunal is limited i.e. to find out whether there is such patent error that it qualifies the term "error apparent on the face of record" warranting interference. Sri Agarwal relied on State Bank of India Vs. Ranjan Chemicals Ltd. and another (2006) 134 Company Cases 24 (SC), S.P. Kanudia and another Vs. Chairperson, Debts Recovery Appellate Tribunal and others (2007) 139 Company Cases 144 (All) and United Bank of India Vs. Abhijit Tea Co. Pvt. Ltd. and others (2000) 102 Company Cases 53 (SC).
14. Before coming to the question, whether the suit of respondent no.1 was rightly transferred and decided along with the suit of the Bank, and, whether the Tribunal under 1993 Act had any jurisdiction in respect of suit filed by a private party against the Bank, in my view, it would be appropriate to consider, whether the Bank's suit has rightly been dismissed by Tribunal. Once this question is decided, the second issue may or may not be necessary to be considered or may become academic. For example, if the Court finds that the Bank was not entitled to recover any amount as claimed and its suit has rightly been dismissed by the both the Courts below, virtually nothing would be of much importance regarding the suit of respondent no.1 since it would have the same effect. Necessity to decide the second question may arise only if the Court finds that the suit of the Bank has wrongly been dismissed in its entirety or in part and in that case, the second issue would also be of utmost importance.
15. Having gone through the pleadings of the Bank in the entire petition, I am constrained to observe that the pleadings and grounds taken in the writ petition are virtually as if the Bank intends to challenge the two orders in first appeal where the Court has concurrent jurisdiction to appreciate evidence etc and thereafter to decide the matter.
16. After almost more than 60 years of the enactment of the Constitution, the scope of judicial review against the orders passed by Courts and Tribunals subordinate to High Court, has been considered and interpreted for umpteen times. It has repeatedly been held that this Court shall not sit in appeal and appreciate evidence etc. like trial court. The interference is called for on limited counts namely, the error apparent on the face of record, lack of patent jurisdiction and clear violation of statutory provision.
17. The power of superintendence upon the Tribunal can be exercised by this Court though very sparingly within the bounds of their authority. In Abdul Razak Vs. Mangesh Rajaram Wagle and Others JT 2010(1) SC 508 the Apex Court held that a writ of certiorari under Article 226 of the Constitution, would be issued by the Court only for correcting gross errors of jurisdiction i.e. when a subordinate court is found to have acted (i) without jurisdiction by assuming jurisdiction where there exists none, or (ii) in excess of its jurisdiction by overstepping or crossing the limits of jurisdiction, or (iii) acting in flagrant disregard of law or the rules of procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice. Similarly, supervisory jurisdiction under Article 227 of the Constitution is exercised when a subordinate court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby. The Court further stressed upon the fact that be it a jurisdiction supervisory or in matter of issuance of writ of certiorari, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby. It can also interfere when there is a patent error i.e., an error which is self-evident i.e. which can be perceived or demonstrated without involving into any lengthy or complicated argument or a long drawn process of reasoning. The Apex Court relied on its earlier decision in Surya Dev Rai v. Ram Chander Rai (2003) 6 SCC 675, where a threadbare analysis of Article226 and 227 of the Constitution of India was made.
18. In State of Haryana Vs. Manoj Kumar 2010(4)SCC 350 the Apex Court said that in exercise of of jurisdiction under Article 226 of the Constitution the Court would not interfere with concurrent findings of fact recorded by the courts below. In observing the above, Apex Court relied on its earlier decisions in Nagendra Nath Bora and Another Versus Commissioner of Hills Division and Appeals, Assam and Others AIR 1958 SC 398; Nibaran Chandra Bag Versus Mahendra Nath Ghughu AIR 1963 SC 1895; Mohd. Yunus Versus Mohd. Mustaqim and Others (1983) 4 SCC 566; Laxmikant Revchand Bhojwani and Another Versus Pratapsing Mohansingh Pardeshi (1995) 6 SCC 576; Rena Drego (Mrs.) Versus Lalchand Soni and Others (1998) 3 SCC 341 and Virendra Kashinath Ravat and Another Versus Vinayak N. Joshi and Others (1999) 1 SCC 47.
19. Thereafter in para 29 in State of Haryana vs. Manoj Kumar (Supra) the Court concluded as under:
"29. This court over 50 years has been consistently observing that limited jurisdiction of the High Court under Article 227 cannot be exercised by interfering with the findings of fact and set aside the judgments of the courts below on merit."
20. The scope of judicial review, therefore, of the judgments of the courts below and Tribunal is so well established that I need not burden this judgment with lots of authorities reiterating the same proposition.
21. Here is the case where the relationship between the Bank and respondent no.1 was not admitted by the defendant; vis a vis the account in respect whereto various transactions of the ultimate default in payment of Bank's dues was alleged by the Bank. The Bank pleaded that respondent no.1 opened current account no. 2870 on 3.9.1991. On that date itself and immediately thereafter, on various dates, in a period of one and a half years, respondent no.1 was allowed a huge overdraft which as alleged he failed to pay. Hence the suit for recovery of the said amount was filed by the Bank. Respondent no.1, per contra, denied the very fact of having opened alleged account with the Bank and also withdrawal of money from the said account. Therefore, the very first question which had to be decided by the Tribunal, whether there existed any relationship between the Bank and respondent no.1. Unfortunately, no issue was framed by Tribunal with respect to this straight question which did arise from the pleadings of the parties. Instead, it basically confined itself to the question whether overdraft facility was provided/sanctioned by the Bank to respondent no.1 and whether or not he availed/utilised such facility. The Tribunal also framed a very wide issue whether the plaintiff is entitled to recover the relief claimed from the defendants and while considering this issue the Tribunal observed that the Bank failed to prove its case inasmuch as, it failed to prove that any overdraft was sanctioned to respondent no.1 and that cheques were issued by respondent no.1 for account bearing no. 2870 and the amounts were withdrawn by him. The Tribunal consequently held that no relief can be granted to the Bank.
22. It is true that the issues were not properly framed but surprisingly, none of the parties took any objection before the courts below. Only before this Court, for the first time, in the writ petition, the Bank has pleaded that issues were not framed in terms of pleadings of the parties. At this stage, therefore, it would not be appropriate for this Court to allow petitioner to make out a new case unless and until it can be shown that without framing such an issue other issues could not have been decided at all, which has not been shown.
23. Sri G.P. Agarwal basically has laid great emphasis on the question of onus placed by the Tribunal upon the Bank in respect of proving the issues in question and has contended that once the pleadings were made by the Bank, documents were filed and the Bank Manager also made his statement on affidavit, the onus lay upon respondent no.1 to disprove all this, otherwise the Tribunal was bound to consider the issue of proof in view of Sections 101, 102, 111, 34 and 115 of Evidence Act read with section 118 of the Negotiable Instruments Act, 1881.
24. I proceed to consider the aforesaid aspect of the matter. First of all, at this stage, certain facts relating to antecedents of KNSB and how it became part of SBI may be looked into. Initially, KNSB was established as a privately owned Bank and was incorporated as a company under the Companies Act for running business of Banking and was regulated by Banking Regulations Act, 1949. It had its registered office at Seth Kali Charan Road, Shahjahanpur. On account of a lot of financial irregularities in KNSB, the Reserve Bank of India initially imposed a moratorium which came to an end on 31.12.1995 and ultimately, the KNSB merged with SBI vide Government Notification dated 01.01.1996.
25. Respondent no.1 had three business accounts along with his wife and brother under the name and style of " M/s Agarwal Sales Corporation", "Sudha Sales Corporation" and "Uma Sales Corporation". It is admitted that no overdraft facility was provided to the aforesaid three accounts.
26. The Bank claimed that current account no. 2780 was opened by respondent no.1 in his own name by depositing Rs.500/and thereafter another sum of Rs. 10,000/was deposited on the same day. It is further alleged that on the same date, i.e., 03.09.1991 a sum of Rs. 1,75,000/was allowed to be withdrawn from the aforesaid account as an overdraft, though admittedly neither there was any written request of respondent no.1 for providing any overdraft facility nor any such order was passed by the Bank, nor any agreement alleged to have been executed between the two parties. As per the claim set up by Bank, the deposit transactions in the aforesaid account are as under:
S.No. Date Amount shown to have been deposited in cash in Rs.
1. 03.09.199091 500/2.
Undated 10,000/3.
16.12.1991 10,000/4.
Undated 1,65,000/5.
10.01.1992 10,000/6.
03.02.1993 1,12,000/7.
04.02.1993 18,000/8.
05.02.1993 3,35,000/9.
15.04.1993 2,00,000/10.
23.04.1993 2,00,000/Total
10,65,000/27.
Regarding withdrawal, the details have already been mentioned above. Respondent no.1 clearly pleaded that there appears a fraud and forgery on the part of Bank officials, and management. The Finance Ministry, Government of India on audit found embezzlement of Rs. 1304.45 Lacs in Bank by the Directors and Bank Authorities. Criminal, Civil and departmental action sought to be initiated against the Bank officials by Government of India. The alleged withdrawal of the amount included payment of some amounts to the companies/firms of the relatives of the Directors of the KNSB and all these matters required investigation.
28. The DRT has considered the entire evidence adduced by the Bank and found that they have miserably failed to prove that any overdraft was allowed to respondent no.1 or he had submitted any cheque and was allowed withdrawal of the amount as alleged. It is interesting to note that on the cheques no account number is mentioned. The order of Tribunal shows that the same mention only name of respondent no.1. There are other irregularities in the aforesaid cheques as is evident from the following findings of DRT/DRAT have not been shown perverse or contrary to record:
"The aforesaid documents failed by the applicant Bank is in original leads to only one conclusion that the current account was opened on 03.09.1991. A sum of Rs. 500/was deposited. The cheques by which the amount in dispute has been withdrawn also did not denote the account no. from which the amount of cheque was to be paid. No account number has been given on these cheques. It is not clear that from which account these cheques were to be cleared. Only the words account of Om Narayan Agrawal is mentioned. The document also shows that there are other account of Shri Om Narayan Agrawal in the said Bank. Another fact which is gathered from cheques is that the cheque no. 000019 was credited on which the date is not known from the stamp fixed on this cheque for payment. Cheque no. 000015 was issued on 04.04.1992 and the payment of this cheque for Rs. 12.00 lacs has been made on 4th of March, 1992. A sum of Rs. 1.75 lacs was taken out from the account on 03.09.1991. It also did not indicate as to who have received the payment of the said cheque. All the cheques have been issued for payment to self payment of cheque no. 000013 has been made to whom is not known. The statement of account filed by the plaintiff Bank has not been duly certified as required by the Bankers Book Evidence Act."
29. In respect of other documents the Tribunal has recorded the findings as under:
"The other important documents relevant to dispute are deposit voucher by which deposit has been made in the disputed account. The documents have been filed by the applicant on 13.11.2000 in TA 11 of 2002 (O.S. No. 380 of 1994. The transfer credit slip by which the amount has been credited also do not bear the signature of the defendant. Rs. 5.00 lacs and Rs. 2.00 lacs have been deposited by whom and in which account is also not clear. These documents give a impression though the account bears the name of the defendant but by whom it was operated and was being operated, no care has been taken by the plaintiff Bank. The document gives a picture that these transactions were made by some one; the evidence is required to connect the defendant."
30. The two witnesses produced by the Bank admit that respondent no.1 had never asked for any overdraft and neither any such sanction was granted by the Bank nor any agreement is on record.
31. In a civil dispute initial burden lies on a party who shall lose in case of failure to prove the case. The Bank, therefore, was under obligation to discharge the burden initially that the alleged account was opened by respondent no.1 and submitted cheques for withdrawal of the amounts as detailed in the plaint. The averments contained in the plaint constitute pleadings. By itself it cannot be treated as an evidence to shift burden on other side for mere pleading by plaintiff. The vouchers said to have been prepared at the time of opening of account, deposit slip etc., were placed before the Tribunal as an evidence. The respondent no.1 denied of having executed any such document. The two officials of the Bank were produced. They stated on oath by way of affidavit that those documents were executed by respondent no.1. Obviously they were parties to the documents. It has to be seen that respondent no.1 basically denied the very basis of the claim of the Bank and averred that neither he opened any account as alleged nor submitted any cheque for withdrawal of the amount. He also did not request the Bank to allow any overdraft. He further stated that all the alleged documents submitted by the Bank were forged and fictitious with the collusion of the officials of the Bank. The two employees of the Bank including the then Branch Manager therefore, became interested party and bare statement of these persons would not have resulted in shifting onus from petitioners to respondent no.1.
32. The question is, whether the petitioners adduced the best evidence. When a document was denied and claimed to be forged, it was always open to the party who alleged execution of such document by other, to get it examined by hand writing expert or produce any other corroborating evidence. It can not be said that the Bank did not have any specimen signatures of respondent no.1 which were admitted by him. Three accounts in the name of firms relating to respondent no.1 were available in the Bank. Therein admitted signatures of respondent no.1 must have been available. The Bank did not make any effort on its own to get admitted signatures of respondent no.1 examined vis a vis vouchers and documents produced in relation to account no. 2870 by an expert and file report as an evidence. It could have produced the expert also in witness box. In a case like this where direct evidence in the form of primary evidence was not possible, it could have adduced other kind of evidence i.e., the indirect or presumptive evidence to corroborate.
33. The main function of rule of evidence is to narrow down the scope of dispute before the Court to the facts relating to that matter which have logical probative value in determining a fact and to prevent giving judgments based on illogical conclusions or prejudices and as an aid to the administration of justice. Broadly speaking, evidence has been classified in six categories i.e. (a) direct and indirect evidence or substantial evidence (b) primary and secondary evidence (c) oral and documentary evidence (d) real evidence (e) original and hearsay evidence and (f) presumptive evidence.
34. "Direct evidence" means that the existence of a given thing or fact is proved either by its actual production or by testimony or demonstrable declaration of someone who has himself perceived it. "Direct evidence" is evidence which if believed establishes a fact in issue. It requires no mental process on the part of Tribunal of fact nor to draw conclusion sought by proponent of evidence other than acceptance of evidence etc. Direct evidence consists of either testimony of witnesses who perceived the facts or the production of documents which constitutes fact which is in question. Sometimes it is called original evidence arising from the personal knowledge of the witness. However direct evidence proves existence of facts in issue without any inference or presumption. There is another term "percipient evidence" which is a term given by some authors to direct evidence having a slightly distinct meaning. It is said that this term not only avoids any possibility of confusion but is also more appropriate to describe the opposite of hearsay evidence.
"Percipient evidence" is evidence of fact which a witness personally perceives using any of his senses.
35. "Indirect evidence" also known as substantial evidence is that which give rise to a logical inference that such fact exists.
"Substantial evidence" may be either "conclusive" or "presumptive". It is conclusive when there is connection between principal fact and the evidentiary fact. It is presumptive where facts rest on a greater or lesser degree of probability. The effect of substantial evidence on consideration must be such as not to admit more than one solution and must be inconsistent with any explanation that the fact is not proved. By direct or presumptive evidence one may say that other facts are disapproved from which existence of given facts may be logically inferred.
36. Learned counsel for the Bank tried to suggest that the documents of the Bank namely vouchers including Bank's registers etc. showing opening of account, deposit of money and entries made in the Bank's account constitute direct evidence and, therefore, nothing further was required and Tribunal must have shifted onus upon respondent no.1 to prove his case else the suit of the bank deserved to be decided in its favour. To my mind, this submission is not correct. The dispute before this Court is not merely about the correctness of entries in the Bank's record. On the contrary the very basic question raised by respondent no.1 is that he had not at all signed any document for opening the aforesaid account, had not deposited any money in the aforesaid account and had not issued any cheque to withdraw any amount from the aforesaid account. Meaning thereby the very basis of these documents was under dispute. In these circumstances, the bank has to prove by leading cogent and reliable evidence so that the Tribunal may have been able to draw an inference, that, what is being contended by the Bank is correct or at least it has produced prima facie evidence to fortify its case. On this aspect unfortunately nothing has been done by the Bank, there is no such facts that the Tribunal could have taken judicial notice and no presumption lay to be drawn in favour of the Bank.
37. By indirect or presumptive evidence we mean that other facts are thus proved from which existence of given facts may be logically inferred. Substantial evidence consists of evidence of circumstances none of which speak directly to the facts in issue but from which those facts may be inferred. In cases where evidence is of substantial nature circumstances from which conclusion of a fact is to be drawn should in first instance be fully established and all the facts so established should be consistent only with the hypothesis of the guilt of wrong doer. The circumstances should be of conclusive nature and they should be such so as to exclude every hypothesis but the one proposed to be proved. In other words there must be a chain of evidence so as to complete and not to leave any reasonable ground for conclusion consistent with effect and must be such as to show that within all human probability the act must be done by a person.
38. It is the function of the Court to separate grain from chaff and accept the fact what appears to be true and reject the rest. In the case in hand we find that on very first day, it is alleged, that respondent no.1 opened a new current account by depositing a petty sum of Rs. 500/and thereafter deposited another Rs. 10,000/.
This is what the Bank claims. Up till then there might not be any problem since these are the acts expected in a common transaction of such nature. But then comes startling fact that on the same day a cheque for withdrawal of Rs. 1,75,000/allegedly deposited by respondent no.1 and honoured by the Bank. The total amount in the account allegedly deposited by respondent no.1 was only Rs. 10,500/where against the Bank admittedly allowed withdrawal of over draft to the extent of Rs. 1.75 lacs. No document of security is available with the Bank. The Bank did not also produce any application by respondent no.1 requesting for overdraft nor any order of competent authority in the Bank permitting such overdraft. When the amount in the account was insufficient the Bank was under no obligation to honour the cheque for withdrawal of Rs. 1.75 lacs, yet it was allowed by the Bank. This was an unusual and exceptional step on the part of the Bank doubting the very functioning of the Bank. It thus lay heavy onus on the Bank to show and prove that these transactions actually took place at the instance of respondent no.1. The very fact that respondent no.1 straightaway denied of having done any of such things, leading to an inference of commission of fraud or forgery by the Bank, the initial onus continued on the Bank to dispel allegation of fraud and misrepresentation, also, for the reason that the action of the Bank in the case in hand was unusual and exceptional. Therefore, reasons for such exception had to be explained and proved by the Bank which the Bank has utterly failed throughout and even before this Court nothing could be explained by Sri G.P. Agarwal learned counsel for the petitioners. 39. He (Sri G.P. Agarwal) then contended that from the facts that cheques were available and submitted and honoured by the Bank, presumption under Section 118 of the Negotiable Instruments Act 1861 (hereinafter referred to as Act, 1861) would be attracted in favour of the Bank. Section 118 reads as under:
"118. Presumptions as to negotiable instruments of consideration.Until the contrary is proved, the following presumptions shall be made:
(a) of consideration.that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has bee accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.
(b) as to date. that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance.that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer.that every transfer of a negotiable instrument was made before it s maturity;
(e) as to order of endorsements.that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps.that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course.that the holder of a negotiable instrument is a holder in due course;
Provided that, where the instrument has been contained from its lawful owner, or form any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving the holder is a holder in due course lies upon him.
40. It raises certain presumption as to negotiable instruments. The presumption is based upon a principle and is not a mere technical provision. But the presumption is rebuttable. It would only come into picture when execution of promissory note or the instrument is admitted.
41. In Kundan Lal Rallaram v. Custodian, Evacueen Property, Bombay, AIR 1961 SC 1316, the Apex Court referring to Section 118 said that it prescribes a special rule of evidence applicable to negotiable instrument. The presumption contemplated there under is one of law and obliges the court to presume inter aila that negotiable instrument or endorsement was made or endorsed for consideration and burden of proof of failure of consideration is thrown on the maker of the note or the endorser, as the case may be. But this occasion would arise only when the execution of document is admitted. The question of consideration does not arise if the very execution of document is denied by the defendant. This is what was also held in Bharat Barrel and Drum Manufacturing Co. (supra). In para 12, the Apex Court said:
"Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118 (a) would arise that it is supported by consideration. Such a presumption is rebuttable."
42. This Court is not going into other aspects of the matter since in the case in hand the very execution of the negotiable instrument was disputed and denied by respondent no.1. Unless initial burden is discharged by the Bank it can not be said that any presumption would/can be drawn in its favour by the courts below.
43. There is another decision of a learned Single Judge of Andhra Pradesh High Court in N. Santosh Vs. Indian Overseas Bank, Hyderabad 2003(1) Banker's Journal 390 cited by Sri G.P. Agarwal, Advocate, to suggest that once a negotiable instrument is produced before the Bank it is bound to honour the same and cannot refuse to pay since it is under a contractual and statutory obligation to do so. The judgment is inapplicable to the case in hand and reliance placed is thoroughly misconceived.
44. The alleged payments were not in the nature of simple withdrawal of money deposited by a depositor. Here what is being claimed is, though respondent no.1 had not deposited enough amount in the Bank, but was allowed overdraft through aforesaid cheques. Unless the Bank shows that there was an agreement between the Bank and respondent no.1 to allow such overdraft or that it was otherwise under any obligation to allow such overdraft, it cannot be said that under the negotiable instrument Act, with respect to overdraft, the Bank would be under obligation to honour it and make the payment. In absence of any contract or agreement, the Bank was not obliged to allow withdrawal of certain amount which is more than what was/is deposited in the account of a depositor. The obligation referred to in N. Santosh(supra) has no application to the case in hand. In para 15 of the said judgment the Court has clearly said that Bank cannot withhold payment to any customer simply on the ground that it suspects that the money held by such customer is for and on behalf of a person who owes amount to it. What all the Bank may require in such cases is existence of an instance of issuance of a cheque by one such customer to the person owing amount to the Bank, just as they rely upon the circumstance of the petitioner issuing cheque to Mr. Venkateshwara Rao. Neither Law of Contract nor principles of Banking permit such a course of action. The whole edifice of the confidence of the customer reposed in the Banks and banking system will collapse. In para 13 earlier the Court also observed that whenever a cheque purporting to be by customer is presented to the Bank, it carries mandate to the Bank to pay. However, it presupposes that sufficient funds have been deposited by the person concerned wherefrom the amount shall be paid by the Bank. In case of deficiency it can validly decline to accept or honour such instrument. In absence of any contract permitting respondent no.1 for overdraft, the Bank is never under an obligation to encash a cheque merely on its presentation though sufficient funds are not available in the account concerned.
45. Another decision cited by Sri G.P. Agarwal in Yumnam Gouramani Singh (Supra) also has no application in the case in hand inasmuch as, para 2 of the said judgement clearly shows that it was an admitted case therein that three loans were taken by defendant respondent from Manipur State Bank but what he claimed was that he had deposited Rs. 11,300/which the court below found not proved by him. The High Court, however, reversed the finding observing that books of account produced by the Bank were not corroborated. This approach of the High Court was not found correct by the Apex Court referring to sections 34 and 115 of the Indian Evidence Act read with Section 4 of Bankers' Book Evidence Act. 1891. Once a transaction of withdrawal of money is admitted by customer, various different considerations apply but the same is not the case here. The very factum of issuance of alleged cheques was disputed and denied by respondent no.1. Neither the books of account nor the presumption, as argued by Sri G.P. Agarwal, therefore, would come into picture. The Bank has been quite unsuccessful in showing that cheques were issued by respondent no.1 and the amount was withdrawn at his instance.
46. It is true that in a matter involving huge financial liability of public body like a Nationalized Bank, the courts would not allow sheer technicality to defeat public interest and a just cause. The Court would ensure that injustice is not done to any party who has a just cause. As far as possible a substantive right should not be allowed to be defeated on account of procedural irregularities which are curable but not otherwise. However this shall not mean that the public body, whatever does or alleges will be presumed always correct even if it is failed to prove its assertion. This burden has to be discharged by the plaintiff and is not lessened if plaintiff is a Bank.
47. The well known distinction between "burden of proof" and "onus of proof" need not be repeated here at. It is well establish that when a suit is filed, burden of proof lies upon the plaintiff who has sought relief from the Court and failure to prove its case would disentitle him from getting any relief. The onus shifts from stage to stage. The distinction between the "burden of proof" and 'onus' has been discussed by the Apex Court in para 19 of its judgment in Anil Rishi (supra). The said paragraph reads as under:
"There is another aspect of the matter which should be borne in mind. A distinction exists between a burden of proof and onus of proof. The right to begin follows onus probandi. It assumes importance in the early stage of a case. The question of onus of proof has greater force, where the question is which party is to begin. Burden of proof is used in three ways : (i)" to indicate the duty of bringing forward evidence in support of a proposition at the beginning or later; (ii) to make that of establishing a proposition as against all counter evidence; and (iii) an indiscriminate use in which it may mean either or both of the others. The elementary rule is Section 101 is inflexible. In terms of Section 102 the initial onus is always on the plaintiff and if he discharges that onus and makes out a case which entitles him to a relief, the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same."
48. In R.V. E. Venkatachala Gounder Vs. Arulmigu Viswesaraswami and V.P. Temple and another (2004) 6 JT (SC) 442 the Court said in para 29 as under:
"In a suit for recovery of possession based on title it is for the plaintiff to prove his title and satisfy the court that he, in law, is entitled to dispossess the defendant from his possession over the suit property and for the possession to be restored to him. However, as held in A. Raghavamma v. A. Chenchamma there is an essential distinction between burden of proof and onus of proof: burden of proof lies upon a person who has to prove the fact and which never shifts. Onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. In our opinion, in a suit for possession based on title once the plaintiff has been able to create a high degree of probability so as to shift the onus on the defendant it is for the defendant to discharge his onus and in the absence thereof the burden of proof lying on the plaintiff shall be held to have been discharged so as to amount to proof of the plaintiff's title."
49. Sri G.P. Agarwal has also relied on Canara Bank Vs. Canara Sales Corporation (Supra) where the dispute related to honouring a forged cheque and consequential liability. In my view, this decision is also of no help to the petitioner. It was not a case of overdraft by the Bank. It would be appropriate to refer para 24 of the judgment as under:
"24. The relationship between the customer of a Bank and the Bank is that of a creditor and debtor. When a cheque which presented for encashment contains a forged signature the Bank has no authority to make payment against such a cheque. The Bank would be acting against law in debiting the customer with the amounts covered by such cheques. When a customer demands payment for the amount covered by such cheques, the Bank would be liable to pay the amount to the customer. The Bank can succeed in denying payment only when it establishes that the customer is disentitled to make a claim either on account of adoption, estoppel or ratification. The principle of law regarding this aspect is as follows:
When a cheque duly signed by a customer is presented before a Bank with whom he has an account there is a mandate on the Bank to pay the amount covered by the cheque. However, if the signature on the cheque is not genuine, there is no mandate on the Bank to pay. The Bank, when it makes payment on such a cheque, cannot resist the claim of the customer with the defence of negligence on his part such as leaving the cheque book carelessly so that third parties would easily get hold of it. This is because a document in cheque form, on which the customer's name as drawer is forged, is a mere nullity. The Bank can succeed only when it establishes adoption or estoppel."
50. The Bank therefore may have valid reasons and therefore can always refuse payments. In this case admittedly, cheques did not contain any account number. The account also has no sufficient funds. The Bank was therefore under no obligation, in the absence of any contract or agreement, for overdraft. Order of sanction for overdraft admittedly did not exist. The reliance, therefore, on the aforesaid authorities is thoroughly misplaced.
51. The manner in which the Bank claimed to have cleared payments is really disturbing. The Bank appears to have not taken any action against its officials concerned. It has simply tried to blame respondent no.1 and to recover the amount from him knowing very well that there were serious lapses on its part. It is true that application for signatures of respondent no.1 through handwriting expert was submitted by the Bank but the same was rejected by the Tribunal and not challenged by the Bank thereafter. However, it was always open to the Bank to obtain opinion of handwriting expert on its own and submit the same before the court below and also produce the said expert for cross-examination. I am rather surprised to consider the poor manner of contest on behalf of the Bank. Pleadings are very sketchy. Attempt on the part of the Bank to prove the issues is also highly defective. It appears that the Bank did not make honest and efficient attempt in contesting the matter before the courts below. The writ petition filed on behalf of the Bank considering all the aforesaid circumstances appears to be only a technical compliance and a pretext to show that they contested the matter at the highest level but without there being any real and bona fide intention.
52. It cannot be said that the Tribunal has erred in observing that the Bank miserably failed to prove the alleged overdraft and withdrawal of huge amount by or at the instance of respondent no.1. Therefore, dismissal of the suit of the Bank by the Tribunal is neither erroneous nor illegal warranting any interference.
53. In view of the above, though the second issue may not be necessary to decide but I propose to consider the same also so as to test all the arguments raised before this Court.
54. Admittedly, the suit of respondent no.1 was transferred to DRT on the application submitted by the Bank. In order to avoid production of evidence before the Civil Court in the suit filed by respondent no.1, the Bank said that documents have already been filed before DRT in the suit of the Bank transferred to DRT and since those very documents are required to be considered in the suit of respondent no.1, and the issues were also overlapping and integrally connected, hence, it should be transferred to DRT. It is the Bank's application which was allowed by DRT and respondent no.1's suit was transferred. Respondent no.1 also did not raise any objection; at least none is on the record. Therefore, with the consent of the parties, the suit of respondent no.1 stood transferred and decided along with the suit of the Bank.
55. Learned counsel for the Bank has not been able to show that the two suits were not inextricably connected. In the circumstances, transfer of respondent no.1's suit to DRT and its disposal along with the suit of the Bank cannot be challenged at this stage. Such exceptional course is permitted as is evident from the Apex Court's observations in para 23 of Indian Bank Vs. A.B.S. Marine Products Pvt. Ltd. (supra) which reads as under:
"Though there appears to be some merit in the first Respondent's submission, we do not propose to examine that aspect. Suffice it to clarify that the observations in Abhijit that an independent suit of a defendant (in Bank's application) can be deemed to be a counterclaim and can be transferred to the Tribunal, will apply only if the following conditions were satisfied:28
(i) The subject matter of Bank's suit, and the suit of the defendant against the Bank, should be inextricably connected in the sense that decision in one would affect the decision in the other.
(ii) Both parties (the plaintiff in the suit against the Bank and the Bank) should agree for the independent suit being considered as a counterclaim in Bank's application before the Tribunal, so that both can be heard and disposed of by the Tribunal.
In short the decision in Abhijit is distinguishable both on facts and law."
56. The two exceptions provided therein are fully satisfied and applicable in the present case. In the circumstances, Bank cannot be permitted to raise this issue for the first time before this Court that the suit of respondent no.1 could neither have been transferred to DRT nor decided along with the suit of the Bank. The plea raised at this stage is thoroughly ill-advised and hence rejected.
57. In view of the above discussion, I find no reason to interfere with the orders impugned in these writ petitions. No error apparent on the face of record could have been shown by the petitioners.
58. Both the writ petitions, therefore, are devoid of merit and are dismissed.
59. In the peculiar facts of the case, I refrain myself from imposing any costs on the petitioners.