SUPREME COURT OF INDIA
K.N. SINGH, T.K. THOMMEN AND KULDIP SINGH, JJ.
M/s. Hyderabad Commercials, Appellant
Versus
Indian Bank and others, Respondents.
Civil Appeal No. 4498 of 1990 (Arising out of S. L.P. (C) No. 14468 of 1989)
Decided on 4-9-1990.
Employment and Service matter - Unauthorised transfer - Admission of liability and assurance to recredit disputed amount - Order of High Court of Andhra Pradesh dismissing appellants Writ Petition on ground that it involved disputed questions of facts which could be determined by Civil Court in a suit - Appellant is the Sub-Distributors of M/ s. Unimech Appliances, it has a Current Account with Indian Bank - Appellant had been depositing money through cheques in its Current Account from time to time - Appellant protested the transfer of aforesaid amount on the ground that it had never authorised the Bank for transferring the amount to respondents account. On the appellants protest the Bank by its letter informed the appellant that the transfer had been made in an unauthorised manner and same will be recredited to its account within two months - Held, It is difficult to believe that a sum of Rs. 12.95 lacs could be transferred to account of an other person on oral instructions, without taking care to obtain authority or instruction in writing for the same - Plea of oral instruction, justifying transfer of such large amount is an afterthought which does not inspire any credence - Banks conduct is reprehensible. We are constrained to observe that such functioning of a Nationalised Bank is detrimental to public interest and if it follows practice of transferring money of its customers to some other persons account on oral authority, people will loose faith in the credibility of Bank - Since basic facts regarding the unauthorised transfer of disputed amount from the appellants account as well as the Banks liability was admitted, there was no justification for the High Court to direct appellant to file suit on ground of disputed questions of fact. The respondent Bank is an instrumentality of the State and it must function honestly to serve its customers - Appeal allowed.
ORDER:— Leave granted.
2. This appeal is directed against the judgment and order of the High Court of Andhra Pradesh dismissing the appellants Writ Petition on the ground that it involved disputed questions of facts which could be determined by the Civil Court in a suit. After hearing learned counsel for the parties and having perused the material on record we find that the case does not involve any disputed questions of facts instead on admitted facts the appellant is entitled to relief.
3. The appellant is the Sub-Distributors of M/ s. Unimech Appliances, it has a Current Account No. 525 with the Indian Bank, Barkatpura Branch, Hyderabad. The appellant had been depositing money through cheques in its Current Account from time to time. During the period 15-1-87 to 13-5-87 the appellant had deposited cheques in the Indian Bank, the amounts under those were realised by the Bank and credited to the a appellants account but later on a sum of Rs. 12.95 lacs was transferred to the account of the respondent- M/ s. Unimech Appliances. The appellant protested the transfer of the aforesaid amount on the ground that it had never authorised the Bank for transferring the amount to respondents account. On the appellants protest the Bank by its letter dated 21-12-1987 informed the appellant that the transfer had been made in an unauthorised manner and the same will be recredited to its account within two months. The letter runs as under:-
"Indian Bank Barkatpura, Hyderabad
Dated: 21-12-1987
M/s. Hyderabad Commercials, Hyderabad.
Dear Sir,
We have today to inform you that we have unauthorisedly debited your account from Jan., 87 to June, 87 on various dates which will be recredited back to your account within 60 days time.
We regret very much for the inconvenience caused in this regard.
Yours faithfully,
For INDIAN BANK
Sd/- x x x
Accountant/ Manager."
Under the aforesaid letter the Bank admitted that the transfer of the disputed amount had been made by the Bank in an unauthorised manner and it further admitted its liability to pay back the amount to the appellant. By another letter Dated 21-12-1987 (Annexure V to the SLP) the Bank reiterated that the amounts which were Transferred from the appellants account on various dates between January, 1987 to June, 1987 will be credited to its account for which no consent letter had been received from the appellant. In spite of its admission of liability and assurance to recredit the disputed amount to the appellants account the Bank failed to honour its commitment. Ultimately, the appellant filed a Writ Petition for the issue of mandamus directing the respondent Bank, a Nationalised Bank for the issue of a direction to the Bank to deposit the disputed amount in its account. The Indian Bank resisted the appellants claim on a strange plea that the disputed amount had been transferred to the respondents account on oral instructions of the appellant. As noted earlier the High Court dismissed the Writ Petition on the ground that the case involved disputed questions of facts.
4. The facts as noted earlier make it amply clear that the Bank had transferred the disputed amount of Rs. 12.95 lacs from the appellants account to the account of respondent M/s. Unimech Appliances. There is, further, no dispute that the Bank admitted that it had made the transfer in an unauthorised manner without obtaining any instruction or authority from the appellant and it accepted its liability to recredit the amount to the appellants account. On such admission the Bank. which is an instrumentality of the State was under a legal obligation to pay back the disputed amount to the appellant. Initially the Bank accepted its mistake and admits its liability and assured the appellant to credit the, amount to its account but later on it resiled and raised a strange plea of oral authority simply with a view to defeat the appellants claim. It is difficult to believe that a sum of Rs. 12.95 lacs could be transferred to the account of an other pers
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.