IMPORTANT POINT
Banks are duty-bound to honor acknowledged deposits and pay maturity values, and cannot deny liability based on alleged fraudulent acts by their employees.

JUDGMENT :

Hiranmay Bhattacharyya, J.

1. This appeal is at the instance of Punjab National Bank (for short “PNB”) and is directed against a judgment and order dated 18.05.2022 passed by a learned Single Judge in WPA 19959 of 2014.

2. By the judgment and order impugned the writ petition stood allowed and the appellant bank was directed to return a sum of Rs. 26,35,18,453,93/- together with interest to the first respondent within the time limit stipulated in the said order.

3. The first and second respondents in this appeal filed a writ petition praying for a direction upon the Branch Manager of PNB to refund and/or return the sum of Rs. 20 crores deposited on 24.01.2023 in the form of fixed deposits for a period of three years with PNB together with interest thereon.

4. The first writ petitioner/the first respondent herein is a State Co-operative Bank and a Schedule Bank within the meaning of the Reserve Bank of India Act 1934 carrying on, inter alia, banking business. The respondent no. 1 herein at the relevant point of time claims to have negotiated with several bankers to obtain maximum available interest on its deposit. PNB agreed to provide the highest available interest to the respondent no. 1 herein at the relevant point of time. PNB through its Selimpur branch issued a letter dated 17.01.2013 containing a proposal to accept a bulk deposit for a sum of Rs. 10 crore and above for a period of one year with interest @ 9.65% per annum. The first respondent was requested to remit this fund in favour of the appellant bank through electronic mode of transfer at the account mentioned in the said letter. The first respondent remitted and deposited a sum of Rs. 20 crores on 24.01.2013 in favour of PNB through Real Time Gross Settlement (RTGS) process at the designated IFSC code and account number provided by the appellant bank. Upon such deposit being made a unique transaction reference number was generated acknowledging receipt of the said sum of Rs. 20 crores. The Senior Manager of PNB under a forwarding letter dated 04.02.2013 forwarded the fixed deposit certificate with the effective date of 24.01.2013 showing the date of maturity as 24.01.2016 and the maturity value of Rs. 26,35,18,454.93/-. After coming across a newspaper report regarding commission of fraud relating to fixed deposits with UCO Bank, Circus Avenue Branch, Kolkata, the first respondent by its letter dated 20.03.2013 requested the appellant bank to confirm the balance on account of the fixed deposit for the said sum of Rs. 20 crores. In response to the said letter, the appellant bank vide letter dated 21.03.2013 informed the petitioner that the appellant bank had not opened the fixed deposit account in favour of the first respondent for the said sum of Rs. 20 crores. Immediately, thereafter, the first respondent through its letter dated 21.03.2013 lodged a complaint before Deputy Commissioner of Police, Detective Department, Kolkata alleging fraud and wrongful misappropriation of the said sum of Rs. 20 crores against the appellant bank and its officials. The first respondents alleged that despite demands made by it for return of the fixed deposit amount by the appellant bank, PNB failed and neglected to pay the amount to the first respondent for which this writ petition was filed.

5. The appellant bank contested the writ petition by filing its affidavit-in-opposition. The specific defense of the appellant bank was that one Sanjay Kumar Pandey carried on business under the name and style of one “Laxmi Enterprise”. The said Laxmi Enterprise opened a current account with the Selimpur branch of PNB on 22.12.2012 after complying with the necessary formalities in that regard. The appellant bank claims to have been informed by a letter issued by the first respondent that they had made RTGS in favour of the said Laxmi Enterprise. The appellant bank requested the first respondent to inform the bank about the purpose of such credit.

6. The appellant bank states that the first r