I.A. Nos. 901, 942, 943, 993 of 2015 and Appeal No. 431 of 2015. Case: Web Pro System and Services and Ors. Vs Axis Bank Ltd.. Delhi DRAT DRAT (Delhi Debt Recovery Appellate Tribunals)
| Case Number | I.A. Nos. 901, 942, 943, 993 of 2015 and Appeal No. 431 of 2015 |
| Counsel | For Appellant: Amrit Kaur Oberoi, N.K. Kukreja and Pooja Yadav, Advocates and For Respondents: Loveleen Goyal, Advocate |
| Judges | Ranjit Singh, J. (Chairperson) |
| Issue | Code of Civil Procedure, 1908 (CPC) - Order XLI Rule 27, 27(1), 27(1)(b); Section 151; Indian Contract Act, 1872 - Section 72; Negotiable Instruments Act, 1881 - Section 131; Recovery Of Debts Due To Banks And Financial Institutions Act, 1993 - Sections 19(25), 22 |
| Judgement Date | January 28, 2016 |
| Court | Delhi DRAT DRAT (Delhi Debt Recovery Appellate Tribunals) |
Judgment:
Ranjit Singh, J. (Chairperson)
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The O.A. filed by Axis Bank for recovery of a sum of Rs. 37,86,854/- stands allowed by the Tribunal below. The appellants are held liable for this amount along with simple interest @ 18% p.a., from 24.9.2009 onwards with costs. Aggrieved against this order, the appellants have filed the present appeal. The appellant No. 2 is proprietor of appellant No. 1 concern. The sister of appellant No. 2, namely, Ms. Ritu Gera, was reportedly running business in China and was actively involved with her brother (appellant No. 2). Appellant No. 2 opened a current account in the name of appellant No. 1 with respondent Bank on 2.1.2004 and deposited the following amounts through seven different cheques drawn on foreign Banks:
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The cheque No. 120129 dated 14.7.2006 for USD 54000.00 drawn on Citizen Bank was deposited on 25.7.2006. The said cheque was returned in the month of August 2006 for the reasons of being fraudulent cheque.
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The cheque No. 9389 dated 31.7.2006 for CAD 59000.81 was drawn on Royal Bank of Canada. This cheque was deposited and was sent for clearing and got credited in the accounts of the appellants on 29.8.2006. The account of Web Pro System & Services was credited with Rs. 23,88,737/-. A sum of Rs. 22,85,538/- was withdrawn out of this amount on various dates by the appellants. This cheque (No. 9389) drawn on Royal Bank of Canada was, however, found to be forged and debit of CAD 59000.81 was passed on to the respondent Bank. The cheque was returned on 9.10.2006 for the reason "no account found on this location". Since the respondent Bank was liable to refund this amount to the Bank as per National Clearing Rules of Canada, it refunded the amount to the Canadian Bank.
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The third cheque No. 5973 dated 25.8.2006 was deposited on 7.9.2006 for USD 26191.00 and was payable on Hudson United Bank. This cheque was also returned on 15.9.2006 due to the reason on account of internal compliance.
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The fourth cheque No. 2998 dated 11.9.2006 for USD 31000.00 deposited on 23.9.2006 was drawn on Wachovia Bank and was returned on 15.9.2006 due to the reason "refer to the maker".
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The fifth cheque bearing No. 1425019 dated 23.8.2006 for USD 62500.00 drawn on Commercial Bank was also returned unpaid for the reason materially altered. Remaining two cheques were also returned for one reason or the other.
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Faced with the above position, the respondent Bank took up the matter with the appellants through letters dated 9.10.2006, 11.10.2006 and 12.10.2006. As per the Bank, the appellants avoided accepting service of the said letters and were noncommittal to take any action for refund of the amount withdrawn from the account. The appellants also failed to produce the details of the overseas parties' names, addresses and purpose for which the said cheques were received, along with documentary proof. Respondent Bank would allege that these were fraudulent act and Ms. Ritu Gera, sister of appellant No. 2, was equally involved in this fraudulent activity in connivance with the appellant. The Bank accordingly would plead that the appellant and others have cheated the Bank of a sum of Rs. 22,85,538/- by depositing the forged cheques for collection and by withdrawing the amount thereof. The Bank had also lodged a complaint with the police on 19.10.2006 pursuant to which FIR No. 361/07 was registered on 25.4.2007 at Lajpat Nagar Police Station, New Delhi and the police had seized documents. Pleading that an amount of Rs. 29,73,078/- was outstanding, including the principal amount with interest, the Bank had filed the O.A. claiming an amount of Rs. 37,86,854/-.
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In response to the notice, the appellants appeared and filed written statement. The appellants have averred that in due course of their business appellant No. 1 had received a cheque of 59000 CAD from M/s. Nile Traders, Uganda on 17.7.2006 which was deposited for clearance with the respondent Bank. The said cheque was cleared and credited in the account. Appellant No. 1 started proceeding on order of M/s. Nile Traders, Uganda and purchased 1000 hard disks worth Rs. 20,50,000/- from M/s. Marks Marketing Pvt. Ltd. against two invoices of Rs. 10,25,000/- each. Appellant No. 1 claims that it had got orders from other companies as well but since the said cheques sent by the concerns got dishonoured, appellant No. 1 did not send any consignment to them.
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As per the appellants, the respondent Bank had informed appellant No. 1 after 82 days of the date of deposit of cheque of 59000 CAD issued by M/s. Nile Traders, Uganda was dishonoured. The appellants would urge that the Bank had earlier informed the appellant No. 1 that the cheque had been cleared and amount was credited in the account of the said appellant. It is only thereafter the appellant No. 1 had purchased 1000 drives worth Rs. 20,50,000/- besides incurring other expenses. The appellants would plead that the Bank otherwise had failed to furnish any document showing that the cheque was dishonoured. As per the appellants, the Bank had withheld an amount of Rs. 1,03,199.42 lying in their accounts. The appellants would accordingly plead that the Bank had acted negligently, besides pleading the deficiency in service on the part of the Bank. The appellants would deny the allegation of fraud or the fact that sister of appellant No. 2 was running business in China where the appellant No. 2 was actively involved. The appellants would point out that the police though had registered a case, but has not taken any action against the appellants. The appellants accordingly would dispute the claim of the Bank or that the Bank was entitled to recover any amount.
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Both parties led evidence on the basis of their respective pleading. The Tribunal formulated three major issues one of which was whether there was any negligence or deficiency in service on the side of the Bank in dealing with the cheques. The appellant had also raised a plea of O.A. being barred by limitation. The Tribunal, after a detailed discussion, has held that the O.A. is not barred by limitation and was filed within three years. The Tribunal has also held that there was no negligence or deficiency in the service on the part of the Bank while dealing with the cheque in question and has accordingly held that the Bank is entitled to recover the amount claimed in the O.A. from both the appellants. The Tribunal, however, has dismissed the O.A. against the sister of appellant No. 2, Ms. Ritu Gera, impleaded as defendant No. 3 in the O.A. Aggrieved against this order, the appellants have filed the present appeal.
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While issuing notice in this appeal, the appellants were directed to deposit 50% of the principal amount as determined by the Tribunal below. The appellants impugned this order by filing a writ petition before the High Court. The High Court disposed of the writ petition by directing the appellants to deposit Rs. 10 lacs in two installments. This amount has accordingly been deposited and is being kept in a fixed deposit. This amount is to be appropriated by the Bank only subject to the orders being passed by this Tribunal in the present appeal.
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When this appeal came up for hearing before this Tribunal on 26.10.2015, the Counsel for the appellants commenced his argument on an application which was not even listed before this Tribunal on the said day. The case was accordingly adjourned while imposing a cost of Rs. 2,000/-. On the next date, it was so noticed that an application was filed for placing on record the investigation report prepared by the police in the criminal case. The Counsel for the appellants was required to satisfy this Tribunal if investigation report will be admissible piece of evidence or if that report could be admitted in evidence at the stage of appeal. On request made by the Counsel, the case was adjourned to 12.11.2015. On this date, another application was filed seeking permission to place on record certain other documents. Notice was issued on this application. On that day, the Counsel for the appellants also prayed for time to move an application to seek permission for recording additional evidence. The case has seen some adjournments thereafter on the subsequent dates as well and in this manner the appeal is now heard along with four applications filed by the appellants.
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The Counsel for the parties have been heard on the pending applications as well as in the main appeal. It would be appropriate to consider the prayer made in the applications first before considering the submissions made by the Counsel in the main appeal.
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I.A. No. 942/2015 is filed under Order 41 Rule 27, CPC read with Section 151, CPC and Sections 19(25) and 22 of the RDDBFI Act. The prayer in the application is to take on record the certified copy of the final police report. Another application (I.A. No. 901/2015) is also filed for placing on record some relevant import documents in respect of final report. Except for stating that investigation report is a very vital document and that there was no document before the Tribunal below to pronounce judgment against the appellant, prayer is made to take this investigation report on record. As already noticed, the Counsel for the appellant was required to satisfy this Tribunal as to how this report prepared by a police officer, which is his finding based on statement of the witnesses recorded, if any, would be admissible in evidence, that too, in the absence of the author of this report. The Counsel for the appellant would submit that the appellant may be permitted to examine the Investigation Officer to produce and prove this document.
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A perusal of this application would also show that the Bank had filed an application for summoning the Investigation Officer, but said prayer was dismissed by the Tribunal on 8.9.2014. The Bank, however, was directed to file the final report. This order was not challenged either by the Bank or the appellants. It is accordingly...
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