HON’BLE SRI JUSTICE V. ESWARAIAH AND HON’BLE SRI JUSTICE B. CHANDRA KUMAR CCCA No. 207 of 2000 Judgment: (per Hon’ble Sri Justice B. Chandra Kumar) This appeal is directed challenging the judgment and decree dated 27.04.2000 passed in O.S. No.804 of 1992 by the IV Senior Civil Judge, City Civil Court, Hyderabad, whereby and whereunder the suit filed by the first respondent herein for recovery of an amount of Rs.6,40,309-11 ps., with interest at 12% p.a., from the date of suit till realisation, was decreed against the appellant and second respondent herein. The appellant herein is the first defendant and the second respondent herein is the second defendant and the first respondent herein is the plaintiff in the original suit. The parties hereinafter will be referred to as they are arrayed before the lower Court for the sake of convenience. The plaintiff-Bank filed the suit for recovery of an amount of Rs.6,40,309-11 ps., against the defendants 1 and 2. The first defendant is Punjab Chemi Plants Limited, represented by its Secretary, and the second defendant is one of the officers of the first defendant company. The case of the plaintiff-Bank is that on the request of the first defendant company, it had provided BANCARD facility to the officers of the first defendant company and, accordingly, the second defendant was provided with BANCARD on 06.05.1986 and he was utilizing the said card facility. Ex.A1 is the application form dated 28.04.1986 for issuance of credit card. On 08.02.1990 the second defendant informed the plaintiff-bank that he had misplaced the credit card and as he is not able to trace it, it may be treated as lost and that he may be issued another card at an early date. Then the plaintiff-Bank seems to have sent a letter dated 16.02.1990 asking the second defendant to fill up the lost card report again and according to the second defendant he received the said letter on 27.02.1990 and again sent the lost card report, vide his letter dated 27.02.1990. However, the second defendant received the bill from the plaintiff- bank, vide bill No.267495, dated 01.03.1990 for Rs.4685/-. Then the second defendant, through his letter dated 06.03.1990, informed the plaintiff-bank that his credit card is being misappropriated by some other person and asked the bank to take necessary action. Then, the plaintiff-bank issued a new card to the second defendant on 24.03.1990. On the report given by the second defendant, the police R.K. Puram (Crime), New Delhi, registered a case in Crime No.129 of 1990 and during the course of investigation one Anwar Ahmed Khan was arrested and 46 Air tickets and 14 credit cards, including the card issued to the second defendant, were recovered from the said person. After trial, the said Anwar Ahmed Khan was convicted for the offences punishable under Sections 379, 419, 420 and 468 IPC. The plaintiff alleged that the second defendant was utilizing his card beyond the prescribed limits and that on earlier occasion also he reported loss of card and that he is in the habit of loosing the cards. The specific case of the plaintiff-bank is that the lost card could not be included in the ‘hot card bulletin’ in the month of February 1990, as the letter dated 08.02.1990 addressed by the second defendant reached the plaintiff- bank after issuance of ‘hot card bulletin’. The further case of the plaintiff-bank is that the lost card was included in the next ‘hot card bulletin’ on 16.03.1990. In the meantime, the second defendant was asked to send lost card report and, accordingly, he had sent a report on 27.02.1990. The further case of the plaintiff-bank is that the card holder will be liable for all transactions made by the use of the lost card for a period of 30 days from the date of the lost card report and that since the lost card report is dated 27.02.1990 and 30 days period expired by 27.03.1990, the defendants 1 and 2 are liable to make good all transactions till 27.03.1990. Accordingly, the plaintiff-bank claimed Rs.6,40,309-11 ps., for the transactions done by using the card till 27.03.1990. The first defendant company filed a written statement contending, inter alia, that it is not responsible for the negligence and laches committed by the plaintiff-bank for permitting the second defendant to utilize the card facility beyond the prescribed limits and in issuing new card to the second defendant and that it was not informed that new card is being issued to the second defendant and in the above circumstances the plaintiff bank is not entitled to recover the suit amount from the first defendant company. The second defendant filed a detailed written statement. His specific case is that he had lost the card somewhere in January 1990 and discovered about the loss of the card on 08.02.1990 and then he immediately informed the same to the plaintiff-bank through registered letter with acknowledgment due. His further case is that the plaintiff- bank had not taken any action till 16.02.1990 and in the communication dated 16.02.1990 the plaintiff-bank had stated that his card was being hot listed. It is also his case that, immediately, on receipt of the said letter, he had filled up the lost card report and sent it to the plaintiff-bank on 27.02.1990. It is also his case that subsequently he received bills from the plaintiff-bank and he had reported back to the plaintiff-bank reiterating the misuse of the credit card and also reminded the plaintiff-bank to take necessary action. It is also his case that he had categorically informed the plaintiff- bank that none of the transactions charged were entered into or made by him. Then, on 03.05.1990 he had addressed letters to all the persons to whom plaintiff had allegedly made payments on the basis of charge slips with a request to identify the man who had misused the credit card and inform the police to take appropriate action and then he had lodged a police complaint. Basing on the above pleadings, the lower Court framed necessary issues. On behalf of the plaintiff, PW.1 was examined and Exs.A1 to A9 were marked. On behalf of the defendants, DWs.1 and 2 were marked and Ex.B1 was marked. The lower Court, on appreciation of oral and documentary evidence, came to the conclusion that the second defendant had simply reported on 08.02.1990 that the card was misplaced and that he had sent the lost card report only on 27.02.1990 and, therefore, till 27.03.1990 the defendants 1 and 2 are liable for any purchases made by using the said card and accordingly decreed the suit against the defendants 1 and 2. Aggrieved by the same, the first defendant-company preferred the present appeal. Sri G. Vidyasagar, learned counsel for the appellant/first defendant, submitted that the lower Court failed to consider the evidence in proper perspective. His main submission is that under Ex.A2, the second defendant had intimated about the loss of the card, but the lower Court has wrongly concluded that the plaintiff-bank has received lost card report only on 27.02.1990. His main submission is that the plaintiff-bank ought to have taken steps to hot list the card on 08.02.1990 itself and therefore the first defendant is not liable for the purchases made on or after 08.02.1990. It is also his submission that there is inordinate delay in hot listing the card and therefore the plaintiff-bank is not entitled to claim the suit amount from the first defendant. Though the learned counsel appearing for the plaintiff-bank initially argued that the first defendant company is liable for the transactions, which took place within 30 days from the date of intimation of lost card as per the terms and conditions of Andhra BANCARD membership, but, however, on verification of the terms and conditions furnished on the back side of Ex.A1, he has conceded that no such condition is enumerated in the said terms and conditions. The only point that arises for consideration in this appeal is whether the defendants are liable for purchases/transactions that have taken place by using the lost card on or after 08.02.1990? There is no need to discuss the other aspects in detail, since the admitted case of the plaintiff-bank is that they have received Ex.A2 letter from the second defendant. In Ex.A2, the second defendant had categorically informed that the credit card bearing No.4506 239 025 266 had been misplaced and that he was unable to trace the same and that the credit card may be taken as lost and that he may be issued another card. PW.1 himself admitted in his evidence about the receipt of Ex.A2 letter dated 08.02.1990. Accordingly to PW.1, subsequently the plaintiff-bank wrote a letter to the second defendant asking him to send lost card report and the second defendant had sent that report on 27.02.1990. PW.1 further admitted that as per condition No.3 in Ex.A1, the customer is liable in case he does not inform the bank about the loss of card within seven days. According to PW.1, in response to Ex.A2 they had addressed a letter on 09.05.1990 under Ex.A4 asking the second defendant to report to the police. On behalf of the first defendant-company DW.1 was examined and on behalf of the second defendant, he himself was examined as DW.2. DW.2 has reiterated his claim that he intimated the plaintiff- bank about the loss of card on 08.02.1990 and subsequently as per the request of the plaintiff-bank, vide their letter dated 16.02.1990 he had sent lost card report again. It is also his case that he lodged a police complaint and subsequently the police arrested the accused and recovered his credit card from the said accused. We have perused the entire material and evidence on record. Ex.A1 is the application, dated 28.04.1986, for issue of Andhra Bank Credit Card. The second defendant was initially provided card on 06.05.1986 for a period of one year and subsequently it was renewed. In 1989 the second defendant reported to the plaintiff-bank that he had lost his card and he was issued a new card in February 1990. It appears that during 1990, the transactions were done manually and according to the plaintiff-bank the system for recording lost card required some process to send information all over the World and therefore a condition of 30 days liability from the date of intimation of loss of card was incorporated. Thus, according to these terms and conditions, any company, at whose instance the cards have been issued to its officers, would be liable for the transactions which took place within 30 days from the date of intimation of the loss of the card. However, a reading of the terms and conditions furnished on Ex.A1 it is clear that there is no such condition. Clause 3 of Ex.A1 is as follows. “If the card is lost or stolen, the cardholder must immediately notify the Bank provided that if this notification is given orally it must be confirmed in writing within 7 days. Until the Bank receives such notification the cardholder will be liable in respect of any sale or cash advance vouchers issued against the lost or stolen card. After the Bank has been properly notified of any loss or theft the principal cardholder will give the Bank all the information in his or her possession as to the circumstances of loss, and take all reasonable steps to assist the Bank to recover the missing card. A nominal fee of Rs.75/- is charged to place the lost/stolen card number in our Hot Card Bulletin. This fee is compulsory whether the card is to be replaced or not.” A reading of above clause and other terms and conditions enumerated on the reverse of Ex.A1 makes it clear that there is no condition making the Company, at whose instance cards were issued, liable for the transactions which took place within 30 days from the date of intimation of the loss of the card. Therefore, now the plaintiff- bank cannot go back beyond those terms and conditions and say that the first defendant company is liable for the transactions which took place within 30 days from the date of intimation of the loss of the card, because this condition was not there as on the date of signing of Ex.A1 and issue of card to the second defendant. In view of the same, the impugned judgment and decree passed against the first defendant- company are liable to be set aside. Accordingly, the CCCA filed by the first defendant-company is allowed and the impugned judgment and decree passed against the first defendant-company stands set aside. Consequently, the suit against the first defendant-company is dismissed. However, in the circumstances, no costs. ______________________ V. ESWARAIAH, J. ___________________ B. CHANDRA KUMAR, J. Date: 10th August 2011 Nsr