A bank's internal policy cannot override legal obligations regarding the cancellation of expired demand drafts, especially when the original draft is presented for cancellation.

ORDER :

Suraj Govindaraj, J.

1. The petitioner is before this Court seeking for the following reliefs;

a. Issue a Writ of Certiorari or directions in the nature of Certiorari quashing the impugned order bearing CTS No.201819002006174 dated 19.6.2019 passed by the Respondent No.1 (Annexure-H);

b. Consequently issue a writ order or directions in the nature of Certiorari directing the 2nd Respondent to cancel the Demand Draft bearing No.005209 dated 31.03.2010 for Rs.50 lakhs and credit the same to the account of the Petitioner along with interest @ 18% p.a. from the date of submission of DD for cancellation namely 19.7.2018 (Annexure-B) and;

c. Issue any other appropriate writ, order or direction as this Hon’ble Court deems fit under the facts and circumstances of the case, in the interest of justice and equity.

2. The petitioner is a current account holder of the respondent No.2-Bank, on 31.3.2010 the petitioner secured/purchased a demand draft for sum of Rs.50 lakhs in the name of one Sri.P.Bache Gowda towards payment to be made to him on account of certain transactions between the petitioner and Sri.P.Bache Gowda. The agreement for sale between the petitioner and the said Sri.P.Bache Gowda having been terminated, the amount received by the Petitioner was sought to be refunded by way of the said demand draft. Sri.P.Bache Gowda did not accept it and a suit for specific performance was filed.

3. After much time taking note that the demand draft had expired the petitioner approached the respondent No.2-Bank, on 19.7.2018 with the original demand draft, requesting the bank to cancel the demand draft and credit the amounts into his current account.

4. The petitioner followed up the said request by email dated 10.8.2018. The respondent-bank in reply, stated that encashment of the demand draft would require confirmations/NOC from the payee.

5. By then Sri.P.Bache Gowda had expired hence the Respondent No.2 bank called upon the Petitioner to furnish no objections from the legal heirs of the payee/Sri.P.Bache Gowda to the satisfaction of the Bank, and in the absence of such confirmation, they would not credit the amount covered under the demand draft into the account of the petitioner.

6. The petitioner, thereafter, repeatedly followed up with the respondents, calling upon the respondent to place on record as to on what basis and under what law the same has been withheld. However, the respondent No.2-Bank was unable to place on record any rules, guidelines or law on which basis the same was being withheld.

7. Left with no alternative, the petitioner was constrained to get a legal notice issued on 5.9.2018, again calling upon the Bank to credit the aforesaid amount. The respondent No.2-Bank replied to the said legal notice, stating that the Demand Draft is in the unpaid status as per the bank records and as per the process of the bank for cancellation of a demand draft, they would require the original demand draft, No Objection Certificate from the payee, which had earlier been communicated to the petitioner. Since only the original of the demand draft was received and No Objection from the payee was not received, the Bank had reiterated and categorically indicated that the refund of the monies was not possible and if the petitioner was aggrieved by said reply, to approach the respondent No.1-Banking Ombudsman.

8. It is in furtherance of the same that the petitioner lodged a complaint with the Banking Ombudsman on 5.1.2019, which came to be disposed by respondent No.1 on 19.6.2019, wherein the Banking Ombudsman took up the contention that the dispute between the petitioner and the payee was pending before a Court and as such dismissed the complaint filed by the petitioner. It is in that background that the petitioner is before this Court, seeking for the aforesaid reliefs.

9. Sri.K.V.Satish., learned counsel for the petitioner submits that;

9.1. There is no dispute about the demand draft being obtained by the petitioner from the respondent No.2-Bank