What is the litigant's duty if the opposite side has given a pay order to him during the pendency of the proceeding?

  In the opinion of this court, the impugned order has not rested its findings on any principle of law, much less any statutory provision. The Tribunal appears to have been completely swayed by the complainant's plight. In doing so, it did not give due consideration to the fact that ₹ 4,53,750/- was debited from the account of the developer. The complainant, for reasons best known to her, filed the original Pay Order due to perhaps lack of proper advice or instruction. Apparently, no order contemporaneously was sought from the MRTP Commission, which would have protected the interests of the complainant with respect to the money received even while ensuring that her contentions on the merits with respect to entitlement towards the flat were preserved. Many avenues / alternatives were available. 

Firstly, the complainant could have sought for a deposit of the proceeds of the Pay Order in an account, to be maintained by the Registrar of the Commission. 

Secondly, she could have sought for a ‘without prejudice’ order enabling her to encash the amount, and at the same time ensure that her claim was not defeated on that score. 

Thirdly, equally, she could have sought for appropriate orders that the amount be maintained by the developer, who could, in the event it became necessary, be directed to pay the principal along with such interest as the Commission or the Tribunal deemed appropriate and in the interests of justice.

 Since none of these choices were opted for, and also having regard to the fact that the amount in question was undoubtedly debited from the developer's current account, there ought to have been a discussion of what was the applicable legal provision which fastened any liability upon the developer. This was more important because the Tribunal in the present case has accepted Citibank’s explanation regarding interest (or rather, its absence of liability, even though the amount was undoubtedly with the bank for about 11 years). {Para 28}

32. In the present case, the complainant was aware that the Pay Order had been tendered by the developer to her; nevertheless she filed the original Pay Order with her complaint, and did not seek any order from the MRTP Commission at the relevant time. The pleadings in the complaint did not disclose that the Pay Order was filed in the Commission, to enable the developer to respond appropriately. In these circumstances, the developer’s argument that the rule embodied in Order XXI, Rule 4 CPC, is applicable, is merited. The developer cannot be fastened with any legal liability to pay interest on the sum of ₹ 4,53,750/- after 30th April 2005.

33. This court is also of the opinion that the complainant’s argument that on account of the omission of the developer, she was wronged, and was thus entitled to receive interest, cannot prevail. The records nowhere disclose any fault on the part of the developer; on the other hand, the complainant did not take steps to protect her interests. It has been held by this court, in Sailen Krishna Majumdar v Malik Labhu Masih10 that in such cases, even if equities are equal, the court should not intervene:

“Equity is being claimed by both the parties. Under the circumstances we have no other alternative but to let the loss lie where it falls. As the maxim is, 'in aequali jure melior est conditio possidentis'. Where the equities are equal, the law should prevail. The respondent's right to purchase must, therefore, prevail.”

In the present case too, the complainant cannot claim interest from the developer, who had returned the Pay Order. As discussed, at the time of filing of the complaint, she could have chosen one among the various options to ensure that the amount presented to her was kept in an interest-bearing account, without prejudice to her rights to claim interest later. In these circumstances, no equities can be extended to her aid.

IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION 

CIVIL APPEAL NO(S). 1401 & 4530 OF 2019; 

K.L. SUNEJA & ANR.Vs DR. (MRS.) MANJEET KAUR MONGA (D) THROUGH HER LR & ANR.

Coram: M.R. SHAH; J., S. RAVINDRA BHAT; J.

Author: S. RAVINDRA BHAT, J.

Dated: JANUARY 31, 2023.

Read full Judgment here: Click here

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Supreme Court directs all Court/Tribunals to deposit money in banks if Pay Order, Demand Draft, Banker’s Cheque, etc. were deposited with it without seeking any order

 Before parting with this case, this court is of the opinion that all courts and judicial forums should frame guidelines in cases where amounts are deposited with the office / registry of the court / tribunal, that such amounts should mandatorily be deposited in a bank or some financial institution, to ensure that no loss is caused in the future. Such guidelines should also cover situations where the concerned litigant merely files the instrument (Pay Order, Demand Draft, Banker’s Cheque, etc.) without seeking any order, so as to avoid situations like the present case. These guidelines should be embodied in the form of appropriate rules, or regulations of each court, tribunal, commission, authority, agency, etc. exercising adjudicatory power. {Para 35}

IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION 

CIVIL APPEAL NO(S). 1401 & 4530 OF 2019; 

K.L. SUNEJA & ANR.Vs DR. (MRS.) MANJEET KAUR MONGA (D) THROUGH HER LR & ANR.

Coram: M.R. SHAH; J., S. RAVINDRA BHAT; J.

Author: S. RAVINDRA BHAT, J.

Dated: JANUARY 31, 2023

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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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