IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH WEDNESDAY, THE 20TH JANUARY 2010 / 30TH POUSHA 1931 SA.No. 768 of 2001() -------------------- AS.130/1995 of ADDITIONAL DISTRICT COURT,ALAPPUZHA. OS.1/1993 of PRINCIPAL SUB COURT,ALAPPUZHA .................... APPELLANT(S)/APPELLANT/DEFENDANT: -------------- INDIAN OVERSEAS BANK, C.C.N.B.ROAD, ALAPPUZHA, REP. BY SENIOR MANAGER SRI N.MURALEEDHARA KURUP. BY ADV. SRI.P.B.SAHASRANAMAN SRI.K.JAGADEESH SRI.T.S.HARIKUMAR RESPONDENT(S)/RESPONDENTS/PLAINTIFF AND LRS OF 1ST PLAINTIFF: --------------- 1. V.V.SOMAN, VALAYIL HOUSE, ARYAD P.O., AMBALAPUZHA TALUK, ALLEPPEY DISTRICT (DIED) 2. THANKACHI, W/O.LATE V.V.SOMAN, VALAYIL, ARYAD NORTH P.O., ALAPPUZHA. 3. SARITHA, D/O.LATE V.V.SOMAN, VALAYIL HOUSE, ARYAD NORTH P.O., ALAPPUZHA. 4. ANITHA, D/O.LATE V.V.SOMAN, VALAYIL HOUSE, ARYAD NORTH P.O., ALAPPUZHA. 5. PADMAKSHI, MOTHER OF LATE V.V.SOMAN, VALAYIL HOUSE, ARYAD P.O., AMBALAPUZHA TALUK, ALLEPPEY DISTRICT. ADV. SMT.ELIZABETH MATHAI IDICULLA FOR R2 TO 4 SRI.MOHAN IDICULLA ABRAHAM FOR R2 TO 4 SRI.K.A.IDICULLA FOR R2 TO 4 SMT.PUSHPY B.MURICKEN FOR R2 TO 4 THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 20/01/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P.JOSEPH, J. = = = = = = = = = = = = = = = = = = = = = = = = S.A. No. 768 of 2001 = = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 20th day of January, 2010 J U D G M E N T --------------------- Heard both sides. 2. The following substantial questions of law are framed for a decision. (i) Whether courts below ought to have found in view of Exts.B1 and B2 that claim of deceased plaintiff is barred by the law of limitation? (ii) Whether in the light of Exts.B1 to B3 courts below are legally correct in holding that the sum of Rs.9,900/- is due to the deceased plaintiff? 3. Second Appeal arises from concurrent finding entered by the courts below in A.S. No.130 of 1995 and O.S. No.1 of 1993 and the decree granted in favour of the deceased plaintiff allowing him to recover the sum of Rs.9,900/- with interest at the S.A. No.768 of 2001 -: 2 :- rate of 12% per annum from 19.9.1986 till date of decree and thereafter at the rate of 6% per annum till date of realisation with costs and compensatory costs of Rs.250/-. 4. Facts of the case necessary for a decision of the questions above framed are: Deceased plaintiff (respondents are his legal representatives) was holding a SB A/c with the appellant during the relevant time, opened on 03.03.1980. His case is that he has been depositing various amounts in the said account and on 5.9.1986, then Cashier of the appellant had unauthorisedly withdrawn Rs.12,000/- from his account making use of fabricated withdrawal slip. The Cashier was charge sheeted by the CBI and convicted for various offences in connection with that withdrawal. On 5.9.1986 deceased plaintiff had Rs.22,521.30 by way of balance in his account. On 19.9.1986 he deposited a further sum of Rs.15,000/- making the balance amount due as on that day to Rs.37,521.30. His original passbook (Ext.A1) was taken custody by the CBI in connection with the criminal case against the Cashier. Appellant issued Ext.A2, duplicate passbook to deceased plaintiff showing the balance as on 9.10.1986 as Rs.121.30. On 6.11.1986 appellant credited Rs.27,500/- in the SB account under caption “by S.A. No.768 of 2001 -: 3 :- claim”. Original plaintiff was made to sign an indemnity bond and balance confirmation letter. According to the deceased plaintiff he did not know banking laws and he signed the documents without understating the contents. He therefore laid the suit for recovery of of Rs.9,900/- which according to him ought to have been in his account by way of balance amount but for the misappropriation by the Cashier. Appellant contended that on 9.10.1986 balance amount due in the account of deceased plaintiff was only Rs.121.30 and on 6.11.1986 there was a settlement of the account between appellant and the deceased plaintiff as per which appellant had credited Rs.27,500/- in the account of the deceased plaintiff under caption “by claim”. Thus the balance amount due in the account of deceased plaintiff was Rs.27,621.30. That balance in the account was confirmed by the deceased plaintiff as per Ext.B1. He also executed Ext.B2, indemnity bond undertaking to make good the loss caused to the appellant in case the balance is not found to be Rs.27,621.30. It is incorrect to say that the balance in the account of deceased plaintiff should have been Rs.37,521.30. Trial court upheld the claim of deceased plaintiff, found that the balance amount as on 19.9.1986 was Rs.37,521.30 and hence deceased S.A. No.768 of 2001 -: 4 :- plaintiff is entitled to recover Rs.9,900/- from the appellant. Appellate court has confirmed that finding and decree. Hence this Second Appeal on the substantial questions of law above framed. Learned counsel for appellant would contend that the suit is hopelessly barred by limitation since even as on 6.11.1986 when Exts.B1 and B2 were executed by the deceased plaintiff in favour of appellant, the former was aware that balance amount in his account was only Rs.27,621.30 including the sum of Rs.27,500/- credited by the appellant under the caption “by claim” in view of the settlement reached between appellant and the deceased plaintiff. Learned counsel would contend that the mere fact that notice was issued to the appellant on 28.3.1992 cannot confer any cause of action for the deceased plaintiff or extend the period of limitation. According to the learned counsel suit filed in the year 1993 is barred by limitation. It is also contended by learned counsel that at any rate courts below went wrong in holding that balance amount in the account of deceased plaintiff as on 19.9.1986 was Rs.37,521.30, ignoring Exts.B1 to B3. So far as Ext.B3 is concerned learned counsel would contend that it is the true extract of the ledger of the account of deceased plaintiff maintained by the appellant in the S.A. No.768 of 2001 -: 5 :- usual course of business and hence it could be admitted in evidence under Section 4 of the Banker's Book Evidence Act. Learned counsel placed reliance on the decisions in Krishna Gopal Kakani v. Bank of Baroda (AIR 2008 SCW 7379) and Bihar State Electricity Board, Patna v. M/s.Green Rubber Industries (AIR 1990 SC 699). In response it is contended by learned counsel for respondents that no plea of limitation has been raised in the written statement, no such question was urged in the trial court, that question was raised for the first time only in the first appellate court and hence that plea cannot be allowed to be raised in the Second Appeal since question of limitation is a mixed question of law and fact. So far as acceptability of Exts.B1 to B3 is concerned learned counsel submits that courts below rightly disregarded Exts.B1 to B3 and at any rate Exts.B1 to B3 cannot override Ext.A1, original passbook issued by the appellant so far as the entires therein are not shown to be incorrect. 5. I shall refer to the substantial question of law framed as to the issue of limitation. It is true that in the written statement no specific plea of limitation is raised. But it is not disputed that in the first appellate court that plea was raised, though it was not S.A. No.768 of 2001 -: 6 :- decided. As pointed out by learned counsel on both sides question of limitation is one of law and fact. A question of law could be raised for the first time in the appeal. Now question of limitation is urged on the facts admitted and proved. Therefore I propose to decide the question regarding limitation raised in the Second Appeal. 6. Contention raised by learned counsel for appellant is that period of limitation for the suit must begin to run from Exts.B1 and B2 dated 6.11.1986 when deceased plaintiff acknowledged the balance amount payable to him as Rs.27,621.30. Under Article 22 of the Limitation Act (for short, “the Act”) the period of limitation for a suit for recovery of the money deposited under an agreement that it shall be payable on demand including the money of a customer in the hands of his banker so payable is three years and period of limitation will begin to run from the date when the demand is made. The agreement to pay on demand need not be express but may also be implied. The agreement could also be deduced from course of dealings. It is not disputed that deceased plaintiff was a customer of the appellant (banker) and that he was maintaining a SB A/c with the appellant which is a running account. Though in the case of S.A. No.768 of 2001 -: 7 :- loan or deposit it could be said that there is no fiduciary relationship between banker and customer as the repayment of loan or deposit is governed by the terms of the contract, it could not be said so in the case of a running account. In the case of running account it is possible to say that money is being retained by the banker in a fiduciary capacity. In Krishna Gopal Kakani v. Bank of Baroda (supra) the Supreme Court considered the relationship between a banker and customer so far as deposit of money is concerned and held that Article 22 of the Act would not be attracted on the facts of that case. It was also held that banker was not the trustee for the money. That is because deposit is on the terms of contract between customer and the banker. But in paragraph 21 of the judgment quoting the observations in UCO Bank v. Hem Chanda Sarkar (AIR 1990 SC 1329) it was held that “we may also state that in practice bankers do not set up the statute of limitations against their customers or their legal representatives, and we see no reason why this case should be an exception to that practice”. On the facts of this case I am persuaded to accept the contention of learned counsel for respondents that there was a fiduciary relationship between S.A. No.768 of 2001 -: 8 :- appellant and the deceased plaintiff as the account of the latter with the appellant was a running account and it is not a case of loan or deposit which is governed by the terms of the contract between them. Appellant was keeping the money in safe custody to be given to the deceased plaintiff as and when the latter desired. Even as per Article 22 of the Act period of limitation for suit for recovery of money of a customer in the hands of his banker is three years beginning from the date on which demand is made which in the present case was on 20.3.1992. Suit was filed within three years from that date. Hence it cannot be said that suit is barred by limitation. 7. Now what remained for consideration is whether on the facts and evidence on record courts below were justified in not acting upon Exts.B1 to B3 in preference to Ext.A1. It is not disputed that Ext.A1 is the original passbook issued by the appellant and as per that, on 19.9.1986 there was a deposit of Rs.15,000/- making up the balance in the account of deceased plaintiff to Rs.37,521.30. So far as Exts.B1 to B3 are concerned, Ext.B1 is the confirmation letter dated 6.11.1986 where the balance as on that day is stated to be Rs.27,621.30 including the sum of Rs.27,500/- S.A. No.768 of 2001 -: 9 :- admittedly credited by the appellant under the caption “by claim” on that day. Learned counsel for appellant would say that the said amount was credited in the account of deceased plaintiff following a settlement reached between appellant and the deceased plaintiff on 6.11.1986 as evidenced by Exts.B1 and B2. Exhibit B2 is the indemnity bond for the said sum of Rs.27,500/- executed by the deceased plaintiff. He has a case that he was not aware of the contents. That contention of course cannot stand since it is admitted by the deceased plaintiff that he has executed Exts.B1 and B2. In Bihar State Electricity Board, Patna v. M/s.Green Rubber Industries (supra) it is held that a person who executes the document is normally bound by it even though he has not read it or was ignorant of the precise legal effect of the document. I am at the question whether Exts.B1 and B2 by itself would defeat the claim of deceased plaintiff. Going by Exts.B1 and B2 I am unable to find that deceased plaintiff had conceded that no amount was deposited by him on 19.9.1986 or that there was no such balance of Rs.37,521.30 as on that day. Circumstances in which Exts.B1 and B2 came into existence has also to be looked into. It is not disputed that even prior to Exts.B1 and B2, the CBI had proceeded S.A. No.768 of 2001 -: 10 :- against the Cashier of appellant and in connection with that case Ext.A1, original passbook issued to the deceased plaintiff was taken custody of by the CBI. Hence Ext.A1 was not with the deceased plaintiff on 6.11.1986 when Exts.B1 and B2 were executed by him. On the other hand it is not disputed that it is after Exts.B1 and B2 that Ext.A1, original passbook was returned to the deceased plaintiff from the custody of the CBI. Exhibit B3 is the certified copy of the ledger maintained by the appellant. First appellate court found fault with Ext.B3 for the reason that some of the entries in it appeared to be the result of overwriting. Learned counsel for appellant would contend that first appellate court was not correct in observing so and there is no material to show that Ext.B3 was falsified. In this connection learned counsel placed reliance on Section 4 of the Banker's Book Evidence Act. 8. It is not clear how the balance sum of Rs.27,621.30 was arrived at. Admittedly deposit of Rs.15,000/- allegedly made by the deceased plaintiff on 19.9.1986 and shown in Ext.A1 has not been given credit to in Ext.B3 to say that the balance as on 6.11.1986 (including Rs.27,500/- credited by the appellant on that day) was Rs.27,621.30. Therefore Exts.B1 and B2 prepared on the basis of S.A. No.768 of 2001 -: 11 :- Ext.B3 necessarily escaped the sum of Rs.15,000/- seen deposited by the deceased plaintiff on 19.9.1986. If that be so, merely based on Exts.B1 and B2 appellant cannot wash off its hands so far as the deposit of Rs.15,000/- is concerned. So far as Ext.A1 is concerned, I do not find any challenge to it on the ground that it is either fraudulently created by the deceased plaintiff or that entry regarding deposit of Rs.15,000/- in the passbook on 19.9.1986 was the result of collusion between deceased plaintiff and the then Cashier. So far as the relevant entry in Ext.A1 is not shown to be incorrect, appellant is bound by it. Taking into account the normal banking practice and presumption being against illegality, I must presume that the entry in Ext.A1 on 19.9.1986 was made genuinely and correctly by the Cashier of the appellant in the course of discharge of his official duty as Cashier. That binds the appellant. If a corresponding entry is not made by the Cashier in the ledger maintained by the appellant, that is not the fault of deceased plaintiff. In the circumstances for the reason of corresponding entry regarding deposit of Rs.15,000/- in the account on 19.9.1986 not being made in the ledger, if at all be so, appellant cannot say that no such amount was deposited on 19.9.1986. Thus, it is not shown S.A. No.768 of 2001 -: 12 :- that Ext.B3 to the extent it concerned the deposit of Rs.15,000/- shown in Ext.A1 on 19.9.1986 is concerned, is true and correct. The presumption attached to Ext.B3 so far as the impugned deposit is concerned, stands rebutted by Ext.A1. If that be so, Exts.B1 and B2 prepared on the basis of Ext.B3 cannot be accepted in preference to Ext.A1. Exhibit A1 binds the appellant. Appellant being in a fiduciary capacity, was bound to pay the amount when asked for by the deceased plaintiff on 20.3.1992. Courts below are therefore justified in not preferring Exts.B1 to B3 to Ext.A1. The Substantial questions of law framed are answered accordingly. Second Appeal is dismissed. No costs. Civil Miscellaneous Application No.1817 of 2001 shall stand dismissed. THOMAS P.JOSEPH, JUDGE. vsv S.A. No.768 of 2001 -: 13 :- THOMAS P.JOSEPH, J. =================== S.A. No.768 of 2001 =================== J U D G M E N T 20TH JANUARY, 2010 S.A. No.768 of 2001 -: 14 :-