In the High Court at Calcutta Civil Appellate Jurisdiction Appellate Side The Hon’ble Justice Sabyasachi Bhattacharyya And The Hon’ble Justice Uday Kumar F.A. No. 144 of 2017 with CAN 1 of 2016 (Old No. CAN 1198 of 2016)

Punjab & Sind Bank Vs.

M/s. Chainrup Sampatram For the appellants : Ms. Jayati Chowdhury, Ms. Mayuri Ghosh, Ms. Mandobi Chowdhury, Ms. Priya Malakar For the respondent : Mr. Sakya Sen, Mr. Rishabh Karnani, Mr. Pawan Kumar Gupta, Ms. Sofia Nesar, Mr. Santanu Sett Hearing concluded on : 03.04.2025 Judgment on : 09.04.2025 Sabyasachi Bhattacharyya, J.:-

1. The present appeal has been filed by the defendant-Bank against a judgment and decree passed in favour of the plaintiff/respondent declaring that the discounting and/or discharge of the Fixed Deposit Receipt Nos.084574 for Rs.25,00,000/- and 084575 for Rs.5,00,000/- is false, fraudulent, inoperative and not binding upon the plaintiff as well as a decree of Rs.39,67,922/- along with interest pendente lite on the principal sum at the rate of 9% per annum from the date of suit to the date of decree and further interest from the date of decree till realisation at the rate of 6% per annum, with costs.

2. The brief facts of the case are that the plaintiff/respondent, which is a partnership firm, opened a Fixed Deposit of Rs.25,00,000/- on May 17, 1997 and another Fixed Deposit of Rs.5,00,000/- on May 19, 1997 with the defendant-Bank for a period of six months each, maturing respectively on November 17, 1997 and November 19, 1997.

3. According to the plaintiff/respondent, when the respondent wrote to the Branch Manager of the concerned Bank on November 19, 1997 for release of the maturity amounts in respect of the said two Fixed Deposits (FDs), a reply was given in writing by the said Branch Manager on behalf of the Bank on the same date, alleging that the FDs had been discharged and prematurely discounted on May 19, 1997 and May 24, 1997 respectively and the proceeds credited to Current Account No.756 purportedly opened in the name of the plaintiff/respondent. Apparently, the said amount had subsequently been siphoned off from the said account as well.

4. The plaintiff/respondent alleges that fraud was practised on it by the respondent-Bank and its officers collusively, either by themselves or with the help of some third party, manufacturing and fabricating false documents by forging the signature of a partner of the plaintiff-firm, alternatively, the defendant-Bank, in breach of its duty of care to the plaintiff, its customer, had allowed a stranger to withdraw the amounts of the said two FDs by use of manufactured, forged, false documents and, as such, the defendant-Bank is liable to compensate the plaintiff for the loss and damages suffered by the latter on account thereof.

5. The plaintiff further alleged that the receipts with regard to the said two FDs were, on being induced by the then Branch Manager of the defendant-Bank, deposited by the plaintiff with the said Brach of the defendant-Bank for safe custody on the undertaking to keep the same in the Bank’s custody safely without any lien, guarantee or charge thereon. The plaintiff furnished two letters dated may 17, 1997 and May 19, 1997 issued by the Bank regarding such safekeeping of the FD Receipts.

6. Learned counsel for the appellant-Bank argues that no vicarious liability can be attributed to the defendant-Bank in view of the misconduct of its Branch Manager or employees in terms of the Service Rules of the Bank. It is argued that in the event of contravention of such Service Rules, the Bank would not be liable for such misconduct of its employees, as such acts would be de hors the duties conferred on the said employees by the Bank.

7. At best, it is argued, the plaintiff could be said to have made out a case of negligence against the Bank, but not fraud as per the plaint case.

8. Learned counsel for the Bank further contends that either in a civil or a criminal proceeding, an allegation of fraud has to be prove