IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN MONDAY, THE 13TH DECEMBER 2010 / 22ND AGRAHAYANA 1932 RSA.No. 1184 of 2010() ---------------------- AS.2/2008 of I ADDL. DISTRICT COURT, TRIVANDRUM OS.31/2004 of PRL.SUB COURT,TRIVANDRUM .................... APPELLANT/DEFENDANT --------------------------------------- SASEENDRAKUMARI,SREEPADMAM,SEKT-K5, KURUP'S LANE,SASTHAMANGALAM,THIRUVANANTHAPURAM. BY ADV. SRI.GOPAKUMAR R.THALIYAL SRI.P.R.PRATEESH RESPONDENT(S): PLAINTIFF ------------------------ STATE BANK OF TRAVANCORE,REPRESENTED BY ITS SASTHAMANGALAM BRANCH MANAGER, M.SATHEESAN.695010. ADV. SRI.R.S.KALKURA THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 01/12/2010, THE COURT ON 13/12/2010 PASSED THE FOLLOWING: S.S.SATHEESACHANDRAN, J 'C.R' -------------------------------------- R.S.A No.1184 OF 2010 -------------------------------- Dated this the 13th day of December 2010 JUDGMENT The defendant in a suit for money is the appellant. Concurrent decision rendered by the two courts below granting a decree for recovery of money in favour of the respondent/ plaintiff, but, with a slight modification over the decree of trial court by the lower appellate court, as to the date from which interest is payable on the amount found due, is challenged in the appeal. 2. Plaintiff is a banking company, and the appellant/ defendant a customer who operated an S.B account in one of its branches. Receiving an intimation from its foreign exchange department to credit 3090 U.S dollars in the account of the defendant, the bank credited the equivalent sum in Indian rupee, Rs.1,24,650/- in that account on 20/05/1998. However, when plaintiff bank received a credit advice over the above amount later, by mistake, that sum of Rs.1,24,650/- was again credited in the account of the defendant on 01/06/1998. The double credit so made in respect of a single credit invoice came to the notice of the bank much later, on 13/09/2002, during the reconciliation of R.S.A No.1184 OF 2010 - 2 - inter office accounts, and by that time, the defendant had already withdrawn a larger portion of the amount credited by mistake and what remained in balance in her account was only Rs.16,007/-. Demand made by the plaintiff to reimburse the amount wrongly credited with interest not being responded, the suit was laid for recovery of a sum of Rs.2,77,314/- with interest at the rate of 15.5% per annum with quarterly rest. The above sum of Rs.2,77,314/- was calculated on the basis of reckoning the sum due on the amount deposited by mistake, on 01/06/1998, with 15% interest per annum with quarterly rest from such date and thereafter adjusting and deducting the balance amount of Rs.16,007/- available on the account of the defendant. 3. The defendant resisted the suit claim contending that there was no mistake in the credits made, and whatever sum credited in her account was actually due to her and she was entitled to withdraw the sum. The balance amount in her account, Rs.16,007/- is illegally withheld by the plaintiff was her further case. Refuting the case of the plaintiff that there was a wrongful credit in her account by mistake, the defendant also impeached the case of the plaintiff that such mistake came to its notice much later, only on 13/09/2002. Suit claim was challenged R.S.A No.1184 OF 2010 - 3 - by the defendant as barred by limitation disputing the cause of action alleged that the mistake in the credit was detected only on 13/09/2002. 4. The trial court framed two issues for consideration. (1) Whether the suit was barred by limitation and (2) the entitlement of the plaintiff to realise the amount claimed against the defendant. The evidence consisted of PW1 and Exts.A1 to A10 for the plaintiff, with no material tendered on behalf of the defendant. The case of the plaintiff that there was a mistake in crediting twice the amount in the account of the defendant over a single credit invoice and such mistake came to be detected much later as pleaded was found proved by the materials tendered. Negativing the challenge of the defendant that the suit claim was barred by limitation, the trial court, analysing the materials tendered with reference to the facts and circumstances involved, concluded that by virtue of the wrongful crediting of the amount by mistake, the defendant had obtained unjust enrichment and, thus, she was liable to repay the benefit so received thereof to the bank. However, the claim of the plaintiff raised in the suit was found excessive, and adjudging the merit of that claim, a decree for a sum of Rs.1,24,650/- with 6 % interest per annum from the R.S.A No.1184 OF 2010 - 4 - date of credit , 01/06/1998, was found due to the plaintiff. The trial court, taking a view that the balance amount of Rs.16,007/- in the account of the defendant should be deducted from the sum of Rs.1,24,650/- as on 01/06/1998 and thus reckoning the amount due, granted a decree in favour of the plaintiff bank allowing it to realise a sum of Rs.1,08,643/- with interest at 6% per annum from 01/06/1998 till realisation, with cost of the suit, from the defendant. 5. In the appeal preferred by the defendant against the decree as above passed by the trial court, the lower appellate court, confirming the findings of the trial court that the suit is not barred by limitation and the plaintiff is entitled to a decree of the sum deposited in the account of the defendant with interest, after reappreciation of the materials tendered, modified the decree holding that the interest on the sum due is realisable only from the date of demand made after detecting the mistake in crediting the amount by mistake in the account of the defendant. Modifying the decree passed by the trial court, the lower appellate court passed a decree allowing the plaintiff to recover a sum of Rs,1,24,650/- with 6 % interest per annum from 28/10/2003 from the defendant and her assets, with liberty to adjust balance R.S.A No.1184 OF 2010 - 5 - amount in the account of the defendant in the sum due under the decree. 6. Notice being issued to the respondent bank, to consider the admissibility of the appeal, the bank has entered appearance. 7. I heard the counsel on both sides. The learned counsel for the appellant assailed the concurrent decision rendered by the courts below, of course, with some modification by the lower appellate court over the actual amount payable, mainly on the plea of bar of limitation that the suit filed long after the crediting of the sum in the account was hopelessly barred. The case of the plaintiff as to detection of mistake over the credit made, at a later point of time after an inter branch reconciliation of the accounts is assailed by the counsel contending that it could have taken notice of the mistake, if any, much earlier as reconciliation of accounts in branch level take place every year, and, further, even if that is not done, had there been reasonable care and diligence, duplication, if any, in crediting the amount in the account could have been easily detected. Pointing out that the case of the plaintiff was of crediting the amount twice in 1998 and it was detected four years later when an inter branch reconciliation of accounts was made, the learned counsel contended that despite a R.S.A No.1184 OF 2010 - 6 - challenge raised by the defendant that such a case had been pleaded only to get over the period of limitation, no material worth mentioning was tendered to prove that case for getting a decree of recovery of money on a mistaken credit, from the defendant. Suit claim was barred by limitation and the decree granted in favour of the bank concurrently by both the courts below is liable to be set aside, is the submission of the counsel. On the other hand, for the bank, stressing upon that no counter evidence was let in by the defendant, the learned counsel pointed out that the case pleaded by the plaintiff was deposed to by its branch manager examined as PW1 and his assertion that the mistake was detected only on inter branch reconciliation of accounts in 2002 remained unimpeached in cross examination. Documentary materials tendered in the case, relating to the transaction in the account of the defendant, according to the learned counsel, have presumptive value as to its genuineness, under Section 4 of the Bankers Books of Evidence Act 18 of 1891. Ext.A6, copy of ledger extract and Ext.A8, copy of credit and debit in the account of the defendant, according to the counsel, clearly establish that there was a wrongful crediting of the sum twice over a single credit invoice and it remained undetected till the R.S.A No.1184 OF 2010 - 7 - mistake was noticed in the inter branch reconciliation of accounts in 2002. The decree granted in favour of the bank is fully supported by the materials tendered and there is no merit in the challenge raised that the suit claim was barred by limitation is the submission of the learned counsel contending that the appeal is not entertainable. 8. The appellant/ defendant did not mount the box, not lead any evidence to substantiate the contentions raised that the suit claim canvassed by the plaintiff is barred by limitation. Despite the plaintiff leading evidence examining one witness and producing materials to substantiate its case that there was a mistake in the credits made in the account of the defendant and such mistake was detected only four years later, the defendant remained aloof from the court. No doubt, the burden was on the plaintiff to prove its case that there was a mistake in crediting the amount twice in the account of the defendant and it was detected only in the inter branch reconciliation of accounts in 2002. The finding of fact entered by the courts below, after appreciating the evidence tendered, concurrently, that there was a mistake in crediting the sum twice in the account of the defendant and it was detected much later, as pleaded by the plaintiff bank, unless R.S.A No.1184 OF 2010 - 8 - it is shown to be perverse and not based on materials, is not open to any further challenge in the Second Appeal. Then the only question to be considered is whether the suit is barred by limitation. If there was a mistake in crediting of the amount twice in the account of the defendant by the bank, then, the period of limitation for a suit for relief from the consequences of such mistake would fall under Section 17 of the Limitation Act. Extension from the period of limitation prescribed is provided under the above Section on two grounds, fraud and mistake. In cases covered by fraud or mistake, the Section spells out that the period of limitation shall not run against the plaintiff or the applicant until such fraud or mistake is discovered or it could have been discovered with reasonable diligence. If the plaintiff was aware of his right to seek relief, he cannot claim the benefit of the extension of period of limitation provided under the aforesaid Section. So, it is not the date of crediting the amount in the account of the defendant which is material where such crediting was one of mistake, but, its detection at a later point of time. Though the defendant had a case that both the amounts credited in her account belong to her, that plea remains as such without any material in support thereof. She had no case, whatsoever, R.S.A No.1184 OF 2010 - 9 - that if the crediting of the amount twice was by mistake then it was known to the bank much earlier. True, she has contended that the assertion of the bank that it came to know of the mistake in 2002 is incorrect and it was so made to bring the suit within the period of limitation. Statement as above disputing the date of knowledge over the mistake by the plaintiff is not sufficient to conclude that the defendant had challenged the maintainability of the suit as barred by limitation asserting a case that if the credits made in the accounts were mistake, no extension in the period of limitation was available to the plaintiff since it had knowledge of the mistake or could have with reasonable diligence discovered such mistake at a point of time much earlier. Other than setting up a contention that the knowledge of mistake claimed by the plaintiff as 30/09/2022 is incorrect, there was no case for the defendant that the bank knew or could have discovered with reasonable diligence such mistake earlier to resist the suit as barred by limitation. 9. An unlawful enrichment in favour of the defendant by wrongful crediting of the amount twice in her account, is found by both the courts below, which, on materials placed, accepted the case of the plaintiff that the credit of the amount was by mistake R.S.A No.1184 OF 2010 - 10 - and it was detected only when an inter branch reconciliation of accounts was carried out. When the plaintiff has proved the mistake in crediting the amount twice in the account of the defendant and the suit was filed within three years from the date of detection of that mistake, the defendant cannot be allowed to retain the benefit obtained under such mistake and thereby enrich herself. 10. In such a case, Section 72 of the Contract Act applies with full force. The aforesaid section of the Contract Act stipulates that a person to whom money had been paid or delivered by mistake or coercion, must repay or return it. The apex court, in “The Sales Tax Officer and others v Kanhaiya Lal Makund Lal Saraf” (AIR 1959 SC 135), dealing with the aspect of mistake under Section 72 of the Contract Act has held thus: “True principle is that if one party under a mistake, whether of fact or law, pays to another party money which is not due by contract or otherwise that money must be repaid. The mistake lies in thinking that the money paid was due when in fact it was not due and that mistake, if established, entitles the party paying the money to recover it back from the party receiving the same.” R.S.A No.1184 OF 2010 - 11 - So much so, the benefit and advantage obtained by the defendant by virtue of the wrongful credit in the duplication of the remittance made by the bank cannot be allowed to be retained and the bank is entitled to recovery of the amount credited by mistake from the defendant. In the facts of the case, the decree granted in favour of the plaintiff allowing to recover the amount credited by mistake in the account of the defendant is unassailable. 11. Though the decree granted in favour of the plaintiff is found to be unimpeachable, it is noticed that the lower appellate court had erred in modifying the decree passed by the trial court especially where there was no cross appeal or cross objection from the plaintiff challenging any part of the decree of the trial court. It is also not a case of the lower appellate court invoking its powers under Order 41 Rule 33 of the Code of Civil Procedure when it effected the modification of the decree of the trial court. The decree granted by the trial court limited the relief to the plaintiff by allowing it to realise a sum of Rs.1,08,643/- with interest at 6 % per annum from 01/06/1998 till the date of realisation, with cost, from the defendant. The lower appellate court, modifying that decree had passed a decree for R.S.A No.1184 OF 2010 - 12 - Rs.1,24,650/- with interest at 6% per annum from 28/10/2003 till the date of realisation, allowing it to adjust the balance amount in the account of the defendant, in the sum decreed and payable. Such modification over the principal amount due to the plaintiff was made by the lower appellate court holding it can claim interest only from the date of demand and not from the date on which the mistaken credit was made in the account of the defendant. Even if that be so, when there was no challenge from the plaintiff against the decree rendered by the trial court, the decree passed with respect to the principal amount with reference to the date of payment could have been fixed only at Rs.1,08,643/-. No reason is also spelt out in the judgment rendered by the lower appellate court how it had varied the principal amount decreed by the trial court for awarding excess amount, the sum which was credited in the account, when it found that the amount due to the plaintiff could be only from the date of demand and not from the date of mistake in the crediting of the amount. When there was no appeal against the decree of the trial court by the bank with respect to the principal amount awarded on the mistaken credit made in the account of the defendant, the lower appellate court, even when it found that for R.S.A No.1184 OF 2010 - 13 - the amount due interest can be claimed only from the date of demand, should have made such modification only on the principal amount as adjudged by the trial court and not for an excess amount. That being so, the decree of the lower appellate court shall stand modified and corrected limiting the sum due to the plaintiff at Rs.1,08,643/0- with future interest at 6% per annum from 28/10/2003, till realisation, from the defendant and her assets. Subject to the modification of the decree as indicated above, the appeal is dismissed directing both sides to suffer their cost. S.S.SATHEESACHANDRAN JUDGE vdv