Whether the person availing banking services is consumer and entitled to get protection of consumer protection law?

 Consumer Protection Act, 1986; Section 2(1)(d)(ii) - Consumer complaint alleging premature encashment of Joint Fixed Deposit by bank in contravention of the terms and conditions is maintainable - A person who avails of any service from a bank will fall under the purview of the definition of a 'consumer' under the 1986 Act. As a consequence, it would be open to such a consumer to seek recourse to the remedies provided under the 1986 Act. (Para 19)

IN THE SUPREME COURT OF INDIA 

CIVIL APPELLATE JURISDICTION

Civil Appeal Nos 5204-5205 of 2022 

Arun Bhatiya Vs HDFC Bank & Ors.

Coram:  DR. DHANANJAYA Y. CHANDRACHUD; J., A.S. BOPANNA; J.

Author: Dr Dhananjaya Y Chandrachud, J

Dated:  August 08, 2022 

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Whether non-voluntary transfer of ownership from defaulting borrower to the Bank under SARFAESI proceedings will result in assigning contractual rights under the Maintenance Agreement?

Cannes has argued that since the Sale Deed between TDI and Surya makes a reference to the Maintenance Agreement, combined with the fact that the Bank has admittedly stepped into the shoes of Surya, leads to the conclusion that such rights of the previous owner stands assigned to the new one. The Court is however unable to accept such an argument.

10. Replacing the owner of the property does not ipso facto lead to the conclusion that the Bank would also be bound by the Maintenance Agreement, which is a separate and a distinct agreement, executed between Surya and Cannes for availing CAM services for one unit in TDI Mall. Unarguably, the obligations and rights flowing from this agreement were distinct from those flowing from the Sale Deed, and cannot be jumbled together for the purpose of reading a privity of contract where there is none.

11. A party cannot be subjected to obligations of a contract to which it is not a party. A stranger or a third party cannot be bound if there no is assignment of contractual rights and liabilities. Certainly, the non-voluntary transfer of ownership from Surya to the Bank under SARFAESI proceedings does not result in assignment of contractual rights under the Maintenance Agreement. The burden of the liability acquired by Surya under a separate Maintenance Agreement, cannot be foisted on the Bank just because it has become the owner of the property. Surya’s liability under the Maintenance Agreement is not attached to the immovable property, even if it was in relation thereto. A mere general reference in the erstwhile Sale Deed to the Maintenance Agreement is insufficient to bind the Bank to the arbitration agreement contained in the Maintenance Agreement.

12. The Maintenance Agreement in its recital, does provide that it shall also bind the parties’ nominees, administrators, legal representatives and the assignee. Thus, the pertinent question is whether the Bank is an assignee under the Maintenance Agreement or not? There is no document on record to show that Surya had specifically assigned its rights and obligations, either in rem or specifically under the Maintenance Agreement, in favour of the Bank. In fact, Cannes also does not deny this fact. No averment has been made to any other document to urge that it would constitute as assignment of Surya’s rights to the Bank under the Maintenance Agreement. The court is thus unable to assume the existence of any assignment of rights. In order to be bound by the terms of the agreement, including the arbitration clause, the assignment of such rights has to be necessarily shown, by way of make a binding agreement between the parties. This is a pre-requisite to bind the Bank to arbitration.

 IN THE HIGH COURT OF DELHI AT NEW DELHI

 Date of Decision: 07th October, 2021 

ARB.P. 591/2020

 CANNES PROPERTY MANAGEMENT SERVICES PRIVATE LIMITED Vs ALLAHABAD BANK 

 CORAM: HON'BLE MR. JUSTICE SANJEEV NARULA

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Is the relationship between the customer and Bank a creditor and a debtor?

 The money that a customer deposits in a bank is not held by the latter on trust for him. It becomes a part of the banker’s funds who is under a contractual obligation to pay the sum deposited by a customer to him on demand with the agreed rate of interest. Such a relationship between the customer and the Bank is one of a creditor and a debtor. The Bank is liable to pay money back to the customers when called upon, but until it’s called upon to pay it, the Bank is entitled to utilize the money in any manner for earning profit.

Supreme Court

CHIEF JUSTICE OF INDIA N.V. RAMANA JUSTICE SURYA KANT JUSTICE HIMA KOHLI

N. Raghavender Vs. State of Andhra Pradesh, CBI

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Whether bank is required to subject the cheque to minute and microscopic examination?

 In the present case, we do not find any circumstance or reason which could have caused any doubt in the mind of a prudent bank to initiate inquiries, rather the facts of the case demonstrate that the respondent-bank and the petitioners were in the same position. The mere fact that the collecting bank has made a payment to its customer who deposited the tampered cheque does not raise an estoppel against the paying bank if later on it is found that the cheque is forged. The respondent-bank was not called upon to be overtly suspicious. The standard of care expected from a banker in collecting the cheque did not require him to subject the cheque to a minute and microscopic examination. The collecting bank has its remedies against its clients for indemnification by asking them to return the money. In turn the clients, i.e., the petitioners have remedies against the drawer of the cheque or her customer to recover the amount from them as per law. 

 IN THE HIGH COURT OF DELHI AT NEW DELHI 
Date of Decision: 16th October, 2018 
 W.P. (C) No. 6778/2016 & C.M. No.27868/2016 

M/S ADYA GLOBAL EXPORT INC.  Vs CANARA BANK 

  CORAM:  MR. JUSTICE SANJIV KHANNA 
                 MR. JUSTICE CHANDER SHEKHAR 

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Whether bank can fix liability upon guarantor on basis of account statement?

 In addressing the above rival submission at the cost of
repeatation for better appreciation, it may be stated that the so called
cash credit facility holder, Madhusudan being dead, his liability towards
the so called cash credit facility as is said to have been availed by him
from the plaintiff-Bank is now sought to be fastened upon the defendant
assigning him in the position as that of a guarantor. 
Undeniably, the plaintiff-Bank neither proved any loan
document i.e. promissory note, nor any such agreement for said cash
credit facility said to have been availed of by Madhusudan from the
plaintiff-Bank nor the agreement of the hypothecation being executed by
Madhusudan Pansari. The document which the bank has proved is the
statement of account certified under Banker’s Book of Evidence Act.
Thus the factum that Madhusudan had availed of any such cash credit
facility from the plaintiff-Bank has not been established. So when the
plaintiff-Bank has not proved the factum of lending of money by way of
cash credit facility to said Madhusudan, there arises no question of any
person coming to be saddled with the liability on that score merely
basing upon the statement of the account that too on being said as a
guarantor. There being no relationship of creditor and debtor between
the plaintiff-Bank and Madhusudan, the creation of relationship putting
a person in the position of a guarantor / surety does not arise. This
assignment of position of a guarantor to the defendant is based upon the
relationship between the person who has taken the cash credit facility
standing as the debtor which stands as the basic precondition so as to be
satisfied. Then only the question of the defendant standing as guarantor
as the surety in securing the payment of dues of the plaintiff- Bank
remaining unpaid by Madhusudan for its recovery on account of default
of Madhusudan would arise.
The law is quite well settled that mere statement of
account is not sufficient to charge the person of the liability unless of
course with the relationship first, the liability if on that score is accepted
by giving a nod to the correctness of the entry of account. This is not the
case here. In every such monetary transaction, the relationship between
the parties must be established first with the availment of the facility and
thereafter the accounts relating to the said transaction as between the
parties as maintained in due course of business when is proved would go
to determine the rights and liability of the parties to the transaction. The
statement of the account has been filed with the plaint. The correctness
of the same has been challenged with the denial of relationship between
the plaintiff-bank and Madhusudan and thereafter the position of this
defendant as assigned by the Bank as a guarantor. When it is stated in
the plaint that Madhusudan has executed a promissory note, no such
pro note has been proved in the case. P.W.1 on behalf of the Bank has
merely gone to depose that the bank record reveals about the advance of
cash credit facility to the extent of Rs.50,000/- to Madhusudan on
21.3.1971 according to his request. Evidence of P.W.1 being read with
the relevant pleading in the plaint, it is seen that the agreement of
hypothecation also is said to have been executed in the year 1976
whereas facility is said to have been so advanced on 21.3.78 which is one
year and four months after the execution of the so called agreement of 
hypothecation. Those documents are not going to establish the
advancement of the cash credit facility to Madhusudan and about such
other documents, it has neither been spoken by P.W.1 nor those have
even been produced and proved in accordance with law. Said documents
have not seen the light of the day. The statement of account filed by the
bank containing the certificate as required under section 3 of the
Banker’s Book of Evidence Act undoubtedly raises a presumption with
regard to correctness of the statement of account until so rebutted by the
adversary. But the same itself is not taken as the document from which
the court can got to hold that the plaintiff-Bank’s case as regards the
advancement of cash credit facility to Madhusudan and the factum as
stated that the defendant stood as guarantor / surety for the same by
tendering the title deeds with the plaintiff-Bank in creating with
equitable mortgage for the purpose of repayment of loan in case of
default by mortgaged has been so established. Mere entry in the books of
account even though maintained therein the Bank in course of official
transaction and by those in due discharge of official duty cannot be
taken as enough and sufficient or the basis so as to fasten the liability
upon the (so called debtor) or a person sought to be proceeded with in
connection with said transactions and dues recoverable by the creditor
being arraigned as a guarantor as to have been given his property as
equitable mortgage through deposit of title deeds for recovery of said 
outstanding dues due to default by the so called debtor and in the
absence of proof of any documents laying the foundations in creating the
relationship between parties.

HIGH COURT OF ORISSA: CUTTACK.
S.A. NO.240 of 1998

U.Co.Bank, Bolangir  V Bipin Bihari Pansari 

PRESENT:
  SHRI JUSTICE D.DASH
Citation: AIR 2017 (NOC)776 Orissa

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Whether bank can evict tenant using provisions of SARFAESI Act?

That issue has been considered in the various Judgments of this Court and the latest one is in "Vishal N. Kalsaria v. Bank of India and Ors." in Crl. Appeal No. 52 of 2016 decided on 20.01.2016, reported in MANU/SC/0061/2016 : (2016) 1 SCALE 172 and at paragraph 30, this Court has observed as under:

It is a settled position of law that once tenancy is created, a tenant can be evicted only after following the due process of law, as prescribed under the provisions of the Rent Control Act. A tenant cannot be arbitrarily evicted by using the provisions of the SARFAESI Act as that would amount to stultifying the statutory rights of protection given to the tenant.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 5610-5611 of 2011

Decided On: 17.02.2016

 Indian Bank Vs. Nippon Enterprises South and Ors.

Hon'ble Judges/Coram:

Kurian Joseph and Rohinton Fali Nariman, JJ.

Citation:(2016) 15 SCC 79

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Whether bank can refuse to encash FDR issued without consideration?

Be that as it may, we do not see nor is there any discussion in the orders before us giving the basis on which the second FDR was issued. Assuming the FDR dated 8th March, 1996 was issued to the Appellant fraudulently, it was all the more obligatory on the Respondent-Bank to have taken action against its employees. As far as the Appellant is concerned, the only document that he had in his possession and rightly so was the FDR issued to him by the Respondent-Bank. The Appellant cannot be expected to produce anything more than what is given to him by the Bank which is the FDR receipt itself.

9. Under the circumstances, we are of the view that the State Commission as well as the National Commission were in error in dismissing the complaint filed by the Appellant. Accordingly, we set aside the orders passed by the State Commission as well as the National Commission and restore the order passed by the District Consumer Forum.
IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6850 of 2005

Decided On: 18.01.2017

 Pishora Singh Vs.  Bank of Punjab and Ors.

Hon'ble Judges/Coram:
Madan B. Lokur and Prafulla C. Pant, JJ.

Citation: AIR 2017 SC 2696

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Whether court can direct bank to deposit money of deceased for distribution to legal heirs inspite of nomination?

With regard to the first point, this Court in a Judgment reported in MANU/GH/0183/1997 : 1998 (2) GLT 350 in the case of Smt. Sunita Shambhu Shirodkar v. Shri Madhukar Lotlikar & Ors. has held that the nominee does not step into the shoes of the legal heirs merely on account of his nomination by the depositor. The provisions of Section 45ZA of the Banking Regulations Act relied upon by the learned Counsel appearing for the Respondent No. 1 have also been taken into consideration whilst coming to the conclusion that even though the nominee may have a right to recover the amounts from the Bank, nevertheless, it is always open to the Court to direct such amount to be deposited in the Court for distribution among the legal heirs. The learned Single Judge of this Court has observed at Paras 10, 11, 12 and 13 thus :

"10. Now as far as the State of Goa is concerned, the law of succession which is in force in the State provides that where any person dies without disposing of his properties, or disposing only a part thereof, or having made the disposition, the will is annulled, revoked or lapses, all legal heirs shall have the said properties or part thereof, in respect of which the testator has not made any disposition. The provisions in this regard are found in Article 1968 of Portuguese Civil Code. The order of legal succession is firstly to the descendants, then to the ascendants, followed by brothers and their descendants, then surviving spouse, then to the collaterals and lastly to the State as is provided in Article 1969 of the said Code.

11. Applying the law laid down by the Apex Court in the above referred matter and considering the provisions of the law of succession in force in the State as also the provisions contained in Section 45ZA of the said Act, it is clear that whenever a depositor appoints his nominee and the depositor dies before the maturity of the fixed deposit for release, the nominee so appointed would certainly be entitled to collect the amount payable on such fixed deposit amount on its maturity for release. However, that would not take away the right of the legal heirs of the deceased depositor from claiming right to the amount standing to the credit of the deceased depositor in accordance with the provisions of law of succession in force. This is so because a nominee is merely a representative of the lawful successor of the deceased depositor to receive the payment on the maturity of the deposit for release. The nominee does not step in the shoes of the legal heirs merely on account of nomination by a depositor.

IN THE HIGH COURT OF BOMBAY AT GOA

Second Appeal No. 49 of 2016

Decided On: 15.03.2017

 Vishwanath Yadav and Ors.Vs. Kashinath Yadav and Ors.

Hon'ble Judges/Coram:

F.M. Reis, J.

Citation: 2017(4) MHLJ 162,AIR 2017 Bom 258

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Whether Advocate can be prosecuted for giving wrong search report to bank?

After hearing learned counsel for the parties
and perusing the record of the case alongwith the factual
report submitted by the learned Public Prosecutor as well
as the precedent law cited at the Bar, this Court is of the
opinion that in totality, the only allegation against the
petitioners is that they were panel lawyers of the Bank
and were supposed to furnish their professional advice
regarding the documents submitted by the loanee.
13. The advice rendered by the petitioners has
apparently gone wrong, but such a wrong would not
entitle the respondent to prosecute a lawyer, as it does
not amount to any criminal culpability. The petitioners at
the most may be liable for gross negligence or
professional misconduct, if it is established by the
evidence, but they cannot be charged for the offences, as
alleged, alongwith the other conspirators.
14. It is not the case of the prosecution that the
petitioners were conspirators alongwith the loanee or had
direct link with them, so as to enter into the conspiracy to
cause loss to the Bank. If any such material was on
record, then of course, the prosecution could have
proceeded against the petitioners. But since there is no
such fact available on record, therefore, the prosecution
of the lawyers, merely on the basis of their professional
advice, cannot be sustained in the eye of law.
15. The Hon’ble Supreme Court in Central
Bureau of Investigation, Hyderabad (supra) also
observed that rendition of legal opinion cannot be
construed as an offence.
16. This Court also takes note of the fact that it is
not possible for the panel advocate to investigate the
genuineness of the documents and he can only peruse the
contents and conclude whether the title was conveyed
through a document or not, which has been done in this
case. It shall not be possible for a lawyer to render
professional advice, in case a wrong advice results into a
case for criminal prosecution against him, and in such
circumstances, the system of justice delivery shall suffer,
as lawyer being an important component of the justice
delivery system would not be able to give his professional
advice without fear and favour.
17. It is also not the case of the prosecution that
the petitioners were themselves involved in forgery or in
creation of illegal documents for committing fraud with
the Banking institution.
18. In light of the aforesaid discussions, this
Court deems it appropriate to allow the present
misc.petitions and the same are accordingly allowed. FIR
No.54/2009 registered at Police Station, Shastri Nagar,
Jodhpur for offences under Sections 420, 467, 468 and
471 IPC is quashed qua the present petitioners only. 
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Misc(Pet.) No. 2786 / 2017
Rajendra Singh V  State of Rajasthan 
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
 Order
29/08/2017

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Whether bank is liable for payment of compensation for wrongful attachment of property?

 Given the above narration of facts, we are satisfied that the
action of the Bank touted as a “mistake”, was not a genuine
mistake but was a deliberate act which they have stood by even
after they were put to notice that they had illegally attached the
petitioner’s property. The respondents did not withdraw the
attachment even when the petitioner filed objection on 14th
September, 2015 against the order of attachment before the Debt
Recovery Tribunal, Lucknow. The petitioner attempted follow-up
with the detailed reminder dated 29th September, 2015 to the
Canara Bank as well as the Recovery Officer, Debt Recovery
Tribunal which was of no avail. Even the filing of this writ
petition on the 25th of October 2016 did not persuade the
respondent bank to seek cancellation of the attachment which was
informed by the petitioner as being completely wrongful. The
attachment was withdrawn only on 7th of March 2017 by the
Recovery Officer. 
31. It is evident that if the petitioner had not agitated before the
Recovery Officer, the respondents may have very well proceeded
with the attachment and may have even sold the property pursuant
to the recovery certificate.
32. The act of attachment of the property is a serious matter.
This attachment was effected without taking the basic care and
effecting a title search. The attachment remained in force from 14th
September, 2015 to 7th March, 2017. Undoubtedly, the present
case is a fit case where the petitioner deserves to be compensated
for the wrongful act of the respondents and the harassment,
insecurity and the trauma which has been faced by 68 year old
petitioner for over one and a half years.
33. It would appear that the compensation amount at the rate of
Rs.15,000/- per month of the attachment i.e., from 14th September,
2015 to 7th March, 2017 (seventeen and half months) being a total
of Rs.2,62,500/- would be a reasonable compensation for the
petitioner.
34. We may note that the petitioner has been compelled to
contest the attachment in Lucknow and by filing the present writ
petition in this court. The petitioner is entitled to litigation costs as
well which are quantified at Rs.1,00,000/-.
IN THE HIGH COURT OF DELHI AT NEW DELHI
 W.P.(C) 10210/2016 & CM No.40335/2016
 Date of decision : 20th June, 2017
V.K. BHATNAGAR 
v
CANARA BANK & ANR
CORAM:
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE ANIL KUMAR CHAWLA
Dated:JUNE 20, 2017

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How difference between sale and agreement of sale will affect contractual obligation?

The undisputed factual position is that the appellantbank
has not released the mortgage. The possession of the
mortgaged property has not been delivered to the first
respondent so far. The three year lock in period expired on
01.03.2015. The creation of third party interest or
arrangement by way of agreement for sale within the three year
period is different from sale. Admittedly, sale has not been
made within the period of three years of settlement. The
scheme has not provided for any other restriction of
involvement of third party interest for settlement of the

dues. The only restriction is on sale of the property within
three years of the settlement. That admittedly having not been
done, the appellant cannot rest any claim under law for the
share of the increase in fair market value by way of
recompense. There is nothing to be recompensed since the bank
has not suffered or lost anything.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3197 OF 2016

PUNJAB & SIND BANK
V
PUNJAB BREEDERS LTD. & ANOTHER.
Citation:(2016) 13 SCC 283

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Whether amount can be withdrawn from bank account of deceased on basis of will only?

The   submission   of   the   learned   counsel   appearing   for   the
petitioner is that in view of the express provisions of the Indian
Succession Act, 1925 (for short “the Succession Act”) and the law
laid down by this Court, it is not mandatory for the petitioner to
obtain Letters of Administration or Probate on the basis of the

Will as the deceased was not a resident of Mumbai and the Will
does not affect any property in Mumbai.   The learned counsel
appearing for the petitioner placed reliance on the decisions of
this Court which hold that in such cases, Probate or Letters of
Administration is not mandatory in view of the express provisions
of Section 57 of the Succession Act.  He would, therefore, submit
that   the   Banks   cannot   insist   on   production   of   a   Succession
Certificate as the petitioner is making a claim on the basis of the
Registered  Will  of   the     account  holder.    The  learned  counsel
appearing for the respondent no.1 supported the stand taken in
the letter dated 1st July, 2014.
6. We   have   perused   a   copy   of   the   alleged   Will   of   deceased
Shevantibai.   The Will itself discloses that though her husband
pre­deceased her,  she was survived by her son and six married
daughters.  
7. Under Section 370 of the Succession Act, on production of a
Succession Certificate, the Banks will get a valid discharge.   In
the   present   case,   admittedly,   the   petitioner   is   not   a  nominee
appointed by the deceased account holder. The petitioner is not a
natural legal heir who is entitled to succeed to the assets of the
deceased as per the provisions of the Hindu Succession Act, 1956.

8. Therefore,   the   respondent   no.1   called   upon   the   petitioner   to
produce a Succession Certificate to facilitate the speedy disposal
of his claim.  We find no error in the approach adopted by the
bank when it insisted on the  petitioner producing a Succession
Certificate.     This   will   enable   the   Banks   to   obtain   a   valid
discharge.       We   may,  however,   hold  that   on   production  of  a
Succession Certificate under Section 370 of the Succession Act
issued by the Competent Court to the petitioner, the respondents
Banks will have to release to the petitioner the amounts standing
to   the   credit   of   the   accounts   held   by   deceased   Shevantibai
without insisting upon complying with other formalities such as
production of an indemnity bond, consent of the natural heirs
etc.   The reason is that if the Banks pay the amounts to the
petitioner on production of the Succession Certificate issued by
the Competent Court, the Banks will get a valid discharge.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.12350 OF 2015
Amol Rajgonda Patil vs.The Manager,Canara Bank & Anr. 
CORAM : A.S.OKA, & A. K. MENON, JJ.
                   DATE : 20th APRIL, 2017

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Whether bank can refuse to make payment to nominee?

Nomination made by a depositor/account holder is the reflection of his wish upon identification by him of the recipient of the deposit lying in an account in the event of death of such depositor/account holder and to hold the same in his (recipient's) custody for being distributed according to the law of succession. Nomination, which is made without any coercion, undue influence or misrepresentation and is accepted by a banking company upon a satisfaction that the nomination does not suffer from any of the vitiating factors and clothes the nominee to receive the amount, ought to be acted upon after the death of the depositor/account holder, for, that would result in honouring his wish. If at all the nomination is, at a subsequent stage, found to suffer from any technical defect precluding the banking company to act on such nomination, it ought to be the bounden duty of the officials of the bank to get the nomination rectified/altered so as to bring it in conformity with the statutory requirements provided the depositor/account holder is alive. Once the opportunity to get the nomination rectified/altered is lost by the tardy and indolent acts of the officials of the bank, it would not be in the interest of justice to allow the banking officials to refuse to honour the wish expressed by the depositor/account holder.

IN THE HIGH COURT OF CALCUTTA

W.P. No. 983 of 2015

Decided On: 30.03.2016

Communist Party of India (Marxist)

Vs.

United Bank of India and Ors.

Hon'ble Judges/Coram:

Dipankar Datta, J.

Citation: AIR 2017(NOC)15 Cal

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When bank is not liable for payment of damages for loss of pay order?

 In para 10 of the plaint, respondent No. 1/plaintiff himself has admitted regarding the factum of forged draft of the Bank. Once he himself admitted that the draft was forged and he could not establish any ill motive or mens rea of Bank, then in absence of any involvement of Bank or its employees, no adverse inference could have been drawn against the Bank.

21. From the conduct of respondent No. 1, it appears that he has not approached the Court with clean hands and a litigant who approaches the Court is bound to produce all the documents executed by him which are relevant to the litigation. He must come with clean hands. [See: MANU/SC/0491/2012 : (2012) 11 SCC 574, Badami (deceased) By Her LR vs. Bhali]. In the present case also, the plaintiff has not come to the Court with clean hands. He has not disclosed about the chain of events through which he followed the investigation process in criminal case registered against the conman, i.e. respondent No. 2. He did not elaborate the fate of police investigation and he has tried to shift the liability over the Bank which in the facts and circumstances of the case cannot be shifted.

22. No contractual liability exists between the Bank and respondent No. 1. Respondent No. 1 had neither contractual agreement with it nor was the customer of the Bank, therefore, no contractual liability of appellant Bank in the present set of facts. Similarly, from the facts and evidence it is established that no tortious liability of the appellant bank exists for suitably compensating respondent No. 1.

23. In view of the aforesaid, no actionable claim can be raised against the Bank because to be actionable claim and get redress from Court, the liability must assume legal shape in any recognized category of wrong such as negligence, malfeasance, misfeasance and non-feasance etc.

'Negligence' ordinarily means failure to do statutory duty or otherwise giving rise to damage, undesired by the defendant, to the plaintiff. Thus its ingredients are

(a) a legal duty on the part of A towards B to exercise care in such conduct of A as falls within the scope of the duty;

(b) breach of that duty;

(c) consequential damage to B."

According to Dias,

"Liability in negligence is technically described as arising out of damage caused by the breach of a duty to take care."

The axis around which the law of negligence revolves is duty, duty to take care, duty to take reasonable care. But concept of duty, its reasonableness, the standard of care required cannot be put in straitjacket. It cannot be rigidly fixed. In Black's Law Dictionary the meaning of each of these expressions is explained as under:

"Malfeasance. -- Evil doing; ill conduct. The commission of some act which is positively unlawful; the doing of an act which is wholly wrongful and unlawful; the doing of an act which person ought not to do at all or the unjust performance of some act which the party had no right or which he had contracted not to do. Comprehensive term including any wrongful conduct that affects, interrupts or interferes with the performance of official duties.

Misfeasance. -- The improper performance of some act which a man may lawfully do.

Non-feasance. -- Non-performance of some act which ought to be performed, omission to perform a required duty at all, or total neglect of duty."

24. The expressions 'malfeasance', 'misfeasance' and 'non-feasance' would, therefore, apply in those limited cases where the State or its officers are liable not only for breach of care and duty but it must be actuated with malice or bad faith [See; MANU/SC/0692/1994 : (1994) 4 SCC 1, Jay Laxmi Salt Works (P) Ltd. vs. State of Gujarat].

25. Here, in the present case from the pleadings and evidence of respondent No. 1/plaintiff, negligence, misfeasance and non-feasance have not been established in any manner. Plaintiff could not establish the malice or bad faith, in the present case. On the other hand, correspondence available on the record suggested that the Bank has taken due care to inform all the branches, Offices and the persons concerned regarding loss of pay order form, moment they come to know about the fraud. Respondent No. 1 was neither customer of the appellant bank nor was in contractual agreement with the Bank. Therefore, on the count of absence of any contractual liability also, no liability could have been fastened over the Bank. The finding so arrived in the impugned judgment and decree are perverse and therefore, set aside. In view of the aforesaid discussions, the judgment and decree dated 12-5-2000 passed by the 9th Additional District Judge, Gwalior is hereby set aside.
IN THE HIGH COURT OF MADHYA PRADESH (GWALIOR BENCH)

F.A. No. 147 of 2000

Decided On: 01.09.2016

 Bank of Maharashtra

Vs.

 Ico Jax India and Ors.

Hon'ble Judges/Coram:

Anand Pathak, J.

Citation: AIR 2017(NOC)183 MP

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NCDRC directed bank to pay compensation of Rs fifty thousand for delay in processing of cheque

Having heard Learned counsel for the Petitioner and the Complainant, who is on caveat, we are of the view that the Revision Petition is without any substance. On appraisal of the evidence adduced by the parties, particularly the pay-in-slip, both the Fora below have recorded a concurrent finding of fact that the Petitioner had failed to substantiate its stand that the delay in credit of the said amount was because of the reason that the Complainant had failed to mention the Account Number and the account holder's name on the pay-in-slip, at the time of deposit of the cheque. Both the Forums have rejected the stand of the Petitioner that the said particulars were filled up later. The said finding having not been specifically challenged as being perverse, we do not find any jurisdictional error in the impugned order, warranting our interference in Revisional jurisdiction, more so when the total amount involved in the case is a meagre sum of 50,000/-, which includes the litigation cost.

National Consumer Disputes Redressal Commission, New Delhi

(Before D.K. Jain, President and M. Shreesha, Member)

Indian Overseas Bank

V

 R.K. Sharma 

Revision Petition No. 3414 of 2016

Decided on January 2, 2017

Citation: 2017 SCC OnLine NCDRC 2

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Whether accused can be acquitted if complainant bank fails to give details of loan given to accused?

Interestingly,   the   complaint   merely   states   that  the

accused had issued the cheque in repayment of the loan  without

giving any particulars of the loan.  The complaint does not give any

details as to when the amount of loan was disbursed.  It does not

even give the amount of loan that was given to the accused. In the

affidavit of his evidence in lieu of examination­in­chief also, the

witness for the complainant, did not give these details.   On the

contrary, he admitted that he did not know about these details.

13 In the cross­examination of the complainant's witness,

he admitted that, usually, when a cheque is given for repayment of

a loan, the (loan) account number of the debtor is written on the

reverse of the cheque.  He admitted that, in the instant case, such

account number  was not written.   Inspite  of  repeatedly  being

questioned in the cross­examination, he could not give the loan

account number of the accused, while admitting that such loan

account number ought to be there, if the accused had been given a

loan.  

14 In the cross­examination of the complainant's witness,

he admitted that proceedings had been filed against the accused

in the Co­operative court and some award had been obtained from

the Co­operative court.   He also admitted that the accused had

deposited some amount in the loan account.   He, however, was

unable to state how much amount had been deposited by the

accused in the loan account and / or how much loan amount had

already been satisfied on 25th  February 2005, i.e.,   the date on

which the cheque was supposedly issued.  The witness also stated

that he  did not have any record or account  to show how much

amount was due and payable by the accused to the complainant on

25th February 2005.

15 The   accused   had   taken   a   defence   that   he   had

previously obtained loan from the complainant bank which had

been  repaid.   These  facts were admitted by  the  complainant's

witness in his cross­examination.   The case of the accused was

that, a cheque given by him to the complainant at that time, as

and by way of security, had been misused, and the accused was

wrongly being prosecuted with respect to an offence punishable

under Section 138 of the N.I.Act.

16 In   light   of   the   fact   that   the   complainant   had

scrupulously avoided giving any details, whatsoever, of the loan

allegedly   obtained   by   the   accused,   and   the   admission   of   the

complainant's   witness   that   he   did   not   have   such   details,   thedefence of the accused was certainly plausible.  The Magistrate's

conclusion,   that   the   accused   had   successfully   rebutted   the

presumption created by Section 139 of the N.I.Act, was proper

and legal.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.920 OF 2013

THE KARAD URBAN CO­OPERATIVE BANK  )

LIMITED ) V/s. SUNIL LAXMAN DALVI AND ANR. )

CORAM : ABHAY M. THIPSAY, J.

DATE : 15th DECEMBER 2015.

Citation:2016(4) MHLJ 577

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What are rules for interpretation of bank documents?

 The loan documents obtained by the bank are in a standard format of contract, standard clauses of the guarantee agreement have been widely adopted because the experience shows the facilitated grant of loan. In the banking transactions, while granting loan and obtaining loan documents, the banks do not compromise on the terms and conditions thereof. In such a contract standard form enables the banker to say "if you want loan or banking services at all, these are the only terms on which they are available. Take it, or leave it." It is a type of contract on which conditions are fixed by one of the party and upon to acceptance by the person appearing from the bank. The contract which, frequently, contain many conditions would present for the acceptance and is not open to discussion. It is settled law that a person who signs document which contains a contractual assumption in normal bound by them even though he is not ready, even though he has ignored all the precise legal effect. Law, in this behalf, is settled by the Apex Court in the case of Bihar A.C.B. v. Green Rubber Industry as back in the year 1989, 1991 S.C.C. 791. Thus, none of the contentions raised in this behalf can be accepted.

Bombay High Court

Central Bank Of India, A Body ... vs The Sion Bakers And Confectioners ... on 11 April, 2008

Equivalent citations: 2008 (110) Bom L R 1363

Bench: V Daga

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Whether a person can take defence that he had signed on blank forms while taking loan from bank?

 In para 13 of the cross-examination, defendant No. 3 has also given number of admissions, which read as under:

It is true that I signed all the loan documents alongwith defendant nos. 2 and 4. It is true that all loan documents were signed by me as a Guarantor and Director of the company. I did not make any complaint to the bank and/or its higher official for having obtained my signatures on the blank forms including form of guarantee letter.

(emphasis supplied) 

40. Perusal of the aforesaid evidence would unequivocally go to show that defendant No. 3 has admitted to have signed all loan documents alongwith defendant Nos. 2 and 4. He has also admitted that loan documents were signed by him as guarantor as also in the capacity of Director of the defendant No. 1-Company. He has also admitted that he did not make any complaint to the bank or its higher authority for obtaining his signatures on the blank forms including form of guarantee letter. It is, thus, clear that execution of the loan documents has been admitted and the execution of the agreement of guarantee has also been admitted. The defendant No. 3 has failed to prove that the said documents were blank documents. Had it been so, he would not have remained silent. He is an educated person. He would have definitely complained to the higher authorities of the bank against the Branch Manager for having obtained blank loan documents from him. Apart from his own bare statement, there is no other evidence on record. Defendant No. 3 was running Industrial Unit. He has seen ups and downs of the life. Such a person is not expected to sign blank documents. Apart from this assuming to be so, once having acted upon those documents having taken advantage of those documents; having taken advantage of the money borrowed from the bank and having used it for years together for its Industrial unit; the defendant No. 3 cannot be allowed to take such somersault and contend that the documents were blank though he has borrowed money, though he had taken guarantee.

Bombay High Court

Central Bank Of India, A Body ... vs The Sion Bakers And Confectioners ... on 11 April, 2008

Equivalent citations: 2008 (110) Bom L R 1363

Bench: V Daga

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Whether debtor can initiate insolvency petition against creditor bank?

The question is whether the bank can claim exemption from insolvency proceedings under Section 8 of the Act. Any company registered under any enactment is exempted from the insolvency proceedings. The bank was registered as a banking company as defined under Section 5(c) of the Banking Regulation Act, 1949 (Act No. 10 of 1949), which reads as under:

"5(c) 'banking company' means any company which transacts the business of banking in India;" Clause (d) of Section 5 of the Act No. 10 of 1949 defines 'company' to mean any company as defined in Section 3 of the Companies Act, 1956; and includes a foreign company within the meaning of Section 591 of that Act. Section 2 of Act No. 10 of 1949 provides that the provisions of Act shall be in addition to, and not, save as hereinafter expressly provided, in derogation of the Companies Act, and any other law for the time being in force.

After the enforcement of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Act No. 5 of 1970), all the banking companies including the foreign companies registered under the Companies Act, 1959, were nationalised and more than 51 per cent shares were taken over by the Government of India and the banking companies became the body corporate under Section 2(d) of Act No. 5 of 1970. Clause (d) defines 'corresponding new bank in relation to existing bank' to mean a body corporate specified against such bank in column 2 of Schedule 1. In the First Schedule 'Punjab National Bank Ltd.' is in the first column and in the second column it has been referred to as 'Punjab National Bank'. Section 4 of 1970 Act provides that on commencement of the Act undertaking of every existing bank shall be transferred to and shall vest in the corresponding new bank.

 In view of the aforesaid provision of law, Punjab National Bank is a Government company under Section 617 of the Companies Act. The view taken by the courts below that the bank is registered company and, therefore, it is exempted from insolvency proceedings--does not suffer from any illegality.

IN THE HIGH COURT OF ALLAHABAD

Civil Misc. Writ Petition No. 17526 of 2001

Decided On: 24.05.2001

Appellants: Nagendra Kumar Jain
Vs.
Respondent: District Judge, Moradabad

Hon'ble Judges/Coram:
S.N. Agarwal, J.

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When adverse inference should not drawn against bank for non production of CCTV Footage recording?

ATM—Unauthorised withdrawal--Since there is no R.B.I. guidelines in India regarding C.C.T.V. Footage recording in the ATM Booth, the non-production of the said C.C.T.V. Footage from the side of the Bank does not impair the defence of the Bank in any way.
ATM—C.C.T.V FOOTAGE RECORDING NOT PRODUCED BY BANK—NO ADVERSE INFERENCE CAN BE DRAWN.
A perusal of the records of the District Forum shows that no such application was ever moved by the complainant before the District Forum. However, the following order was passed by this Commission on 7.11.2012:-

"The main dispute between the parties as alleged by the appellant is that Video clips were not supplied by the respondent. On the other hand, counsel for the respondent submitted that CCTV was not available at that time in the ATM Cabin, and as such the same was not supplied to the appellant/customer. Whether the CCTV was compulsory to be installed in the ATM cabin or not and what were the directions/regulations of the RBI. The documents be produced by the parties."

 In spite of that order, no such document was produced by either of the parties. As the onus was upon the complainant so he was required to place on record the directions/regulations of the RBI that the installation of CCTV Camera in the ATM booth at the relevant time was mandatory. For the non-production of any such direction or regulation an adverse inference is to be drawn against the complainant himself. 

State Consumer Disputes Redressal Commission

Mehar Singh vs Centurion Bank Of Punjab Ltd. on 25 March, 2013

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
  PUNJAB, DAKSHIN MARG, SECTOR-37A, CHANDIGARH

                 FIRST APPEAL NO. 722 OF 2008

                                      

Quorum:

Hon'ble Mr. Justice Gurdev Singh, President Sh. Baldev Singh Sekhon, Member 

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