THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO C.C.C.A. NO. 21 OF 2001 Date: 29-03-2011 Between: Pradeep Agarwal .. Appellant And Andhra Bank, a Govt. of India undertaking Having its Central Office at Andhra Bank Building, Sultan Bazar, Hyderabad and another .. Respondents THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO C.C.C.A. NO. 21 OF 2001 JUDGMENT: The 1st defendant in O.S.No. 1968 of 1987 is the appellant herein. The suit was filed for recovery of Rs.1,62,427/- with interest on the principal amount of Rs.1,00,000/-. The allegations in the plaint go to show that the 2nd defendant was a clerk in the plaintiff’s bank and he had got knowledge as cashier and as a clerk and also the process of clearing of bills, drafts, etc. (A.B.C.D. Cell). The 1st defendant is a close friend of the 2nd defendant. Both of them have colluded in order to cheat the bank and the 1st defendant on 27.08.1984 presented a cheque for Rs.1,00,000/- at State Bank of Hyderabad, Sultan Bazar, Hyderabad by altering its number purported to have been issued by one Y.R.Reddy, who was found to be not existing. The instrument was forwarded to the plaintiff bank and the 2nd defendant removed the said instrument and destroyed the same or otherwise caused it to disappear. The 1st defendant has withdrawn that amount, which was credited to the savings bank A/c No.7101. The fraud of the defendants was noticed by the officials of the bank while verifying the records and it was found that the credit of Rs.1,00,000/- was given even without the instrument being traced. The sheets pertaining to the period 27.08.1984 and 28.08.1984 were removed. It was also noticed on enquiry that the 1st defendant opened another S.B. Account No.5391 at Andhra Bank, Hyderabad Branch and was issuing cheques, which were dishonoured. But the amount of Rs.1,00,000/- credited to the special savings bank A/c No.7101 was withdrawn freely. Thereafter a police complaint was given and a case was registered and investigated into. It was noticed during investigation that both the defendants have cheated and gained unlawfully and, therefore, the amount of Rs.1,00,000/-, which was illegally drawn, is recoverable with interest. The 1st defendant filed written statement denying the allegations in the plaint and also the working with the bank of the plaintiff. According to him, the 1st defendant has presented the instrument issued to him by his customer towards sale consideration in his account of State Bank of Hyderabad and the same was honoured and credited to his account. The conspiracy between the defendants is denied. The loss, if any, sustained by the plaintiff is due to the fault of the staff of the plaintiff. There is no liability on behalf of the 1st defendant, therefore, the suit is liable to be dismissed. The 2nd defendant also filed a written statement denying the conspiracy between him and the 1st defendant. He denied that he was incharge of the clearance of the cheques. He pleaded that he was acquitted in the criminal case and the present suit is not maintainable against him and is liable to be dismissed. On the basis of the above pleadings, the following issues have been framed for trial: 1. Whether the plaintiff is entitled to recover the suit claim from D-1 and D-2? 2. Whether the D-1 is entitled to exemplary costs as prayed for? 3. To what relief ? On behalf of the plaintiff, P.Ws.1 to 5 were examined and marked Exs.A-1 to A-18. On behalf of the defendants, D.Ws.1 and 2 were examined and marked Exs.B-1 to B-8. After considering the evidence on record, the learned First Senior Civil Judge, City Civil Court, Hyerabad decreed the suit of the plaintiff against both the defendants and aggrieved by the said judgment and decree, the 1st defendant has filed the appeal. The 2nd defendant did not file any appeal. The points that arise for consideration are: 1. Whether the appellant has committed any fraud and presented a false cheque and drawn the money? 2. Whether the judgment and decree passed by the learned I Senior Civil Judge, City Civil Court, Hyderabad is legal and sustainable? POINTS: The facts which are not in dispute are the appellant herein, who is the 1st defendant, said to have presented a cheque for Rs.1,00,000/- said to have been given by one customer by name Y.R.Reddy dated 27.08.1984 and the said cheque was presented by him in the State Bank of Hyderabad at Sultan Bazar and it was sent for clearance to the plaintiff bank and it is not in dispute that the amount was cleared and the appellant had withdrawn the said amount in installments. According to the case of the plaintiff, the cheque, which was presented by the appellant, was said to have been given by a non- existing person and as both the defendants are friends the document was made to disappear and clearance was given by crediting the said amount to the account of the appellant and thereby caused the loss. The fact that the appellant had drawn a sum of Rs.1,00,000/- is not in dispute. In the cross-examination of the witnesses also, there is no serious confrontation of the fact that the alleged cheque said to have been issued by Y.R.Reddy was missing. It is the specific case of the plaintiff that there was no account in the name of Y.R.Reddy, who is said to have given the cheque in favour of the 1st defendant. According to the case of the appellant, he was doing furniture business and Y.R.Reddy was his customer. He claims to have supplied furniture to Y.R.Reddy but he does not know what was his occupation or what was his residential address. He claims to be running the furniture shop by name M/s Kumar Traders and as there was no account the cheque was credited to his personal account. According to him entries were made in the accounts book regarding the sale of furniture. The evidence of P.Ws.1 to 5 clearly shows as to how the loss has been occurred to the plaintiff bank. The learned counsel for the appellant contends that the plaintiff bank has no right to claim the amount from the appellant, who is a third party and if there is any defect in instrument it would have been returned and the collecting bank should have been verified. If there is any negligence or carelessness of the employees of the plaintiff, the third party is not liable. The criminal case having been ended in acquittal, there can be no further liability against the appellant. It was also pleaded that State Bank of Hyderabad is a proper party. Reliance is placed on a decision reported in the case of K.M.ABBU CHETTIAR v. HYDERABAD STATE BANK[1], wherein it was held that “when the loss is suffered by the negligence or conduct of his own employees, the innocent third parties cannot be made liable”. Reliance is also placed on a decision reported in the case of UNITED BANK OF INDIA LTD. v. M/s A.T. ALI HUSSAIN AND CO.,[2] wherein it was held that every sum paid under a mistake is not recoverable, but if the circumstance be construed as falling within the purview of the doctrine of estoppel or are such that it would be inequitable to allow the plaintiff to recover, the plaintiff must fail. There cannot be any doubt about the broad principle to the effect that if the acts of the appellant are bonafide and if any mistake has occurred due to the fault or negligence of the employees of the plaintiff, the liability cannot be fixed on the customer. For instance, if from a customer’s account a wrong transfer has been effected by the employees of the bank, the customer cannot be put to loss. But, however, the facts in this case are quite different. According to the case of the plaintiff, there was no presentation of cheque at all and the 2nd defendant, who was incharge of the clearance has manipulated as if the document was misplaced and a clearance for Rs.1,00,000/- was given and credited to the account of the appellant, who has withdrawn the same. If it is to be held that the plea of the appellant that one Y.R.Reddy has given a cheque for the furniture supplied by him is false, then the entire case of the plaintiff has to be accepted. The appellant herein did not summon the said Y.R.Reddy as a witness. If really a cheque was given by him, it would not have been very difficult for the appellant to call him and prove that he received the furniture and that he has got account with Andhra Bank and gave the cheque for Rs.1,00,000/- in favour of the appellant. Merely because, the criminal Court has acquitted the appellant for criminal charges the undue enrichment made by the appellant cannot be allowed and the plaintiff bank cannot be put to sufferance. If the appellant has not made an attempt for getting money, it would not have been credited into S.B. account of the appellant. Therefore, it is quite clear that from the material available on record, the appellant has failed to prove that he has presented a valid instrument to the bank and for that only the amount was credited. The defendant has failed to discharge the burden and it is not a case of negligence on the part of the bank staff and it is clearly a case of undue enrichment by the appellant. The evidence on record shows that Y.R.Reddy has no account at all with Andhra Bank, for which the cheque is presented by the appellant. Therefore, for all the above reasons, I do not find any infirmity in judgment of the lower Court and the decree and judgment passed by the lower Court does not call for any interference. Hence, the appeal is dismissed with costs. ________________________ N.R.L.NAGESWARA RAO, J 29-03-2011 MR THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO C.C.C.A. NO. 21 OF 2001 Date: 29-03-2011 MR [1] AIR 1954 MADRAS 1001 [2] AIR 1978 CALCUTTA 169