Banks are obliged to act in accordance with the terms and conditions of the account opening forms and its commercial banking practices. Acting on oral instructions and transferring huge sums of money without consent is irresponsible and contrary to banking customs.

SWATANTER KUMAR, J.

( 1 ) THE learned trial court vide its judgment and decree dated 1st March, 2004 while partially decreeing the suit of the plaintiff/respondent No. 1 in the present appeal, directed defendant No. 2/bank of Rajasthan Ltd. to pay simple interest on the amount of Rs. 12 lakh from August, 1992 till the date it remained unpaid/adjustment of the account. Being aggrieved, the Bank of rajasthan Ltd. has filed the present regular first appeal.

( 2 ) M/s. Anant Raj Agencies P. Ltd. was maintaining a current account with the Bank of Rajasthan Ltd. at its Kamla Nagar Branch, Delhi. M/s. Simplex packaging P. Ltd. , B. 37, Noida was also having an account at the same Branch. M/s. Anant Raj Agencies P. Ltd. , respondent No. 1 herein, was having sufficient balance in their account and the Bank debited the sums of Rs. 3 lakh, Rs. 1 lakh and Rs. 8 lakh on 6. 11. 91, 7. 12. 91 and 27. 12. 91 respectively. The same were credited to the account of respondent No. 2. According to respondent No. 1, they had learned about these illegal debits in the second week of August, 1992 whereafter enquiries were made from the Bank about the difference of Rs. 12 lakhs plus additional interest charged by the Bank @ 22. 5% with quarterly rests. It was averred that this was done to give undue favour to respondent No. 2. When respondent No. 1 threatened to lodge a complaint with the police, the manager of the Bank requested the said respondent not to take criminal action and assured that this amount would be got refunded with interest. However, only a sum of Rs. 2. 75 lakh was adjusted/credited while leaving a balance of Rs. 9. 25 lakh. Being aggrieved from this action of the Bank and as the amount was not refunded, respondent No. 1 filed a suit for recovery of the amount with pendente lite and future interest @ 27. 5% per annum and costs. The total amount debited on account of principal and interest was stated to be Rs. 18,64,881. 93/- and after making an adjustment of Rs. 8. 75 lakh, balance of Rs. 9,89,881. 93/-remained for which the suit was filed. This obviously included the interest from 6. 11. 92 till filing of the suit i. e. 5. 12. 94 to the extent of Rs. 4,28,087. 93/ -. The Bank contested the suit taking various preliminary objections as well as stating on merits that the amounts were debited to the account of respondent No. 1 on instructions from them and the same were credited in the account of respondent No. 2 to the knowledge of respondent No. 1. However, debit entries of Rs. 12 lakh and charging of interest thereupon were not denied. It was stated that the interest has been charged as per the bank rates and it was specifically denied that any promise was made by the Manager of the Bank. According to respondent No. 2, they used to do lot of business transactions with the Bank and the same was done without knowledge of respondent no. 2 and respondent No. 2 was not liable for that as they were not even aware of such entries keeping in view the large scale business.

( 3 ) KEEPING in view the pleadings of the parties, the learned trial court vide its order dated 16. 3. 2001 framed the following issues:-

1]. Whether the amount in question was unauthorisedly debited in the account of the plaintiff and the account of defendant No. 1 was correspondingly unauthorisedly credited with that amount" 2]. Whether the plaintiff is entitled to any interest, if so, for which period and at what rate" 3]. If issue No. 2 is decided in affirmative, whether it would be deft. no. 1 and deft. no. 2 who would be liable to pay the interest"

( 4 ) THE parties led evidence and the issues were answered by the trial court in favour of the plaintiff. But in the meanwhile, the sum of Rs. 12 lacs was refunded/paid by respondent No. 2. Vis-a-vis defendant No. 2, the trial court passed a decree for interest as afore-noticed, giving rise to the filing of the present appeal. The said judgment and decree is challenged before this court primarily on the ground that no f