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IN THE HIGH COURT OF JUDICATURE AT BOMBAY AT NAGPUR BENCH
A. S. Chandurkar, Pushpa V. Ganediwala, JJ.
The Amravati Peoples’ Co-operative Bank Ltd., Cosmos Co-operative Bank Ltd. -
Appellant
Versus
M/s Giltedege Management Services Ltd. and ors. – Respondents
First Appeal No. 361 of 2010
Decided On : 07-04-2021
Civil of Procedure Code, 1908 - Section 96 - Maharashtra Co-operative Societies Act, 1960 - Reserve Bank of India Act, 1934 - Activities as a Non-scheduled Urban Co-operative Bank - As per Circulars issued by Reserve Bank of India from time to time plaintiff is required to invest 15% of its net demand and time liabilities in government and other approved securities - In accordance with these Circulars plaintiff is engaged in making investments in government and other approved securities - This activity of purchasing securities was being undertaken by plaintiff through defendant no.1 which is a company registered with the Reserve Bank of India under provisions of Act, 1934 - Plaintiff’s dealings with defendant no.1 are from year 1998 and defendant no.2 is its Chief Executive Officer and Director plaintiff is concerned with two transactions of sale and purchase of Government Securities - Whether plaintiff proves that it had entered into transaction with defendant no.1 for sale of Security No.1 and in lieu thereof defendant no.1 was to sell Security No.2 to it.
Finding of the court: Court find that trial Court ought to have brought it to notice of the parties that it intended to rely upon said Circulars and Notifications while adjudicating the suit – If such notice would have been given to parties they could have addressed the Court effectively - In absence of any such opportunity trial Court was not justified in relying upon same while holding against plaintiff. Such pleas were also not raised by any of defendants by challenging aforesaid transactions as being contrary to said Circulars and Notifications - It is thus held that trial Court was not justified in placing reliance upon these Circulars and Notifications - Court do not find any merit in this submission as the record indicates that learned Judge who conducted trial and heard the learned counsel thereafter has himself decided suit - It may be that for certain period the learned Judge was discharging duties as the 3rd Joint Civil Judge, Senior Division, Amravati.
Result: First Appeal allowed
JUDGMENT :
A.S.Chandurkar, J.
This appeal under Section 96 of the Civil of Procedure Code, 1908 (for short, the Code) has been preferred by the unsuccessful plaintiff which claims to be a victim of the “Government Securities Scam” in Maharashtra. By the judgment dated 25.01.2010 in Special Civil Suit No.165/2002 the suit for return of Government Securities sold by the plaintiff or in the alternate for recovery of value of the securities to the tune of Rs.12,75,86,403.67 has been dismissed.
2. The facts relevant for deciding the appeal as can be gathered from the pleadings of the parties are being referred to. The parties are being referred to as per their status before the trial Court. It is the case of the plaintiff that it is a bank duly registered under the provisions of the Maharashtra Co-operative Societies Act, 1960 (for short, the Act of 1960). It carries on activities as a Non-scheduled Urban Co-operative Bank. As per Circulars issued by the Reserve Bank of India from time to time the plaintiff is required to invest 15% of its net demand and time liabilities in government and other approved securities. In accordance with these Circulars the plaintiff is engaged in making investments in government and other approved securities. This activity of purchasing securities was being undertaken by the plaintiff through the defendant no.1 which is a company registered with the Reserve Bank of India under the provisions of the Reserve Bank of India Act, 1934. The plaintiff’s dealings with the defendant no.1 are from the year 1998 and the defendant no.2 is its Chief Executive Officer and Director. The plaintiff is concerned with two transactions of sale and purchase of Government Securities. As per the first transaction dated 15.01.2002 the plaintiff was to sell Government Security “GOI 10.70% Government Stock 2020”(hereinafter referred to as Security No.1) to the defendant no.1. The total face value of the said security was Rs.4,00,00,000/- and the sale consideration was Rs.4,60,00,000/- with accrued interest of Rs.10,34,333.33 on the date of settlement which was 19.01.2002. The plaintiff was required to physically deliver the said security to the defendant no.1 within a period of fifteen days from the date of settlement. It was agreed that the defendant no.1 instead of paying sale consideration of Rs.4,70,34,333.33 would purchase Government Security “GOI 8.07% Government Stock 2017”( hereinafter referred to as Security No.2). The total valuation thereof was Rs.4,04,35,866.67. Security No.2 was to be physically delivered by the defendant no.1 to the plaintiff within a period of forty five days from the date of settlement. The defendant no.1 was to pay difference amount of Rs.65,98,466.66 to the plaintiff. According to the plaintiff pursuant to this agreement dated 15.01.2002 as per the trade practice Security No.1 was physically delivered along with blank signed transfer forms to the representative of the defendant no.1 on 29.01.2002. Pursuant thereto the defendant no.1 paid the amount of difference of Rs.65,98,466.66 to the plaintiff vide cheque dated 19.01.2002. According to the plaintiff it completed its part of the aforesaid transaction. However the defendant no.1 failed to deliver Security No.2 that was agreed to be delivered to the plaintiff.
3. The second transaction according to the plaintiff was dated 28.02.2002. In pursuance to the deal confirmation letter dated 28.02.2002 issued by the defendant no. 1, the plaintiff was to sell Government Securities having face value of Rs.5,50,00,000/- (hereinafter referred to as Security No.3) to the defendant no.1 for a consideration of Rs.6,40,32,347.48. These Government Securities were to be physically delivered to the defendant no.1 within 15 days from 28.02.2002. The defendant no.1 instead of paying the sale consideration agreed to purchase Government Securities having face value of Rs.5,50,00,00/- (hereinafter referred to as Security No.4) which were to be thereafter physically del
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