Through this second appeal appellant State Bank of India, Raja Darwaja, Varanasi ( in short, S.B.I.) has assailed the judgment and decree passed by the 3rd Addl. District Judge, Varanasi on 8.5.97 in Civil Appeal No.497 of 1992 reversing the findings and conclusions recorded by the trial court, that is, IInd Addl. Civil Judge, Varanasi in suit No.307 of 1985 filed by the S.B.I. for recovery of the amount of loan, the amount arising out of allowing overdraft facility to its client, respondent. While admitting the appeal, following substantial questions of law were framed by this Court:
"1. Whether the appellant Bank had discharged the onus cast upon it in order to establish the debt acknowledgment letter dated 26.11.1982 signed/executed by the defendants/respondents?
2.Whether the lower appellate court has recorded findings in contravention and ignorance of the provision of Section 34 of the Evidence Act and Section 4 of the Bankers' Book Evidence Act?
3.Whether the lower appellate court by disallowing the evidence provided by the appellant-Bank has not acted illegally and discarded a contradictory finding as laid down by the Hon'ble Supreme Court in the case of State of India -v- Yamuna Gurmani Singh-reported in AIR 1994 at page 1644?
It emerges from the record that in the year 1979 a current Bank account no.233 was opened by the respondent M/s R.K.Electricals, Raja Darwaja, Varanasi through its sole proprietor Dina Nath Sharma in the SBI, Branch Raja Darwaja, Varanasi. The said firm requested for allowing overdraft facility for running its business. The respondents had operated the aforesaid current account and obtained 2 overdraft facility as per practice of the SBI. The interest is charged on the overdraft account. It was agreed between the Bank and the borrower to charge the interest at the rate of 2.5% above the advance with a minimum of 19% per annum up to 31.3.1983 and thereafter 1.5 % above the advance rate with minimum of 18% quarterly interest was to be charged. As per SBI right from the very outset, the respondent firm was irregular in making repayments and keeping its account in order. It was not cooperating the Bank in keeping the account properly settled. It has defaulted in making repayments, several legal notices were sent to the firm from time to rime requesting it to regularise its loan account. The firm had defaulted in making repayment of loan and had abused the overdraft facility. Ultimately the Bank had filed a suit No.307/85 in the court of Addl. Civil Judge, Varanasi for recovery of Rs.1,09,832.59p. plus interest from the defendant, respondent herein. The suit was contested by the firm by filing written statement. Thereafter rejoinder affidavit was filed. Initially the firm had taken pleas of convenience in the written statement. Later on written statement was amended and a plea was taken that a correct entry of Rs. 65,700/- was made in the loan account of the petitioner on 30.12.1981. According to the firm this amount was not adjusted towards the repayment of loan, borrowed by the respondent firm.
The trial court had framed eight issues covering the dispute. The trial court had decreed the appellant Bank's suit with costs. The order for recovery of Rs.1,09,832.59p. plus interest at the rate of 16% upto to liquidation of entire decreetal amount from the defendant was passed. The defendant preferred an appeal which was registered as 497 of 1992. This appeal was allowed giving rise the cause of action to the SBI to file second appeal.
As per SBI, the lower appellate court without seeing the provisions of Banker's Book Evidence Act and even without examining the documents on record had allowed the appeal vide its judgment and decree dated 8.5.97 . The lower appellant court has failed to notice that there was no separate evidence produced by the borrower firm to establish that it has actually deposited Rs.65,700/- It was clarified by the Bank. Infact the Bank's version is that a mistake had crept in the account in the credit entry of Rs.65,700/- on 30.11.81 which was recorded in the current account of the respondents . Later on when the mistake was noticed, it was immediately corrected and the incorrect entry was scored out on 31.11.1981. The 3 findings of the lower appellate court is that the borrower had deposited Rs.65,700/- is without any evidence. No "pay- in- slip" document or voucher in support of the claim that a sum of Rs.65,700/- was deposited in the loan account of the firm was produced before the Court. No document is available. The court has failed to appreciate that this plea was taken for the first time in the additional written statement without producing any evidence in respect of this entry.
The lower appellate court has ignored a material evidence that by a letter, the respondent firm has acknowledged the liability on 26.11.1982. It was indicated in this letter that he owed the above amount to the Bank. Letter was duly signed by the borrower firm. It was confirmed that the loan amount was fully in the knowledge of the borrower and the the plaintiff firm 's letter was signed by him on 26.11.1982. The defendant respondent had acknowledged the debt due against them. The statement of the account duly verified was filed before the court. Such statement of account is prepared as per provisions of Banker's Book Evidence Act. These entries are clear and categorical proof of the balance of the amount payable by the respondent and in arriving at a conclusion to the contrary on the basis of an entry which was recorded by a mistake and had remained only for 24 hours, the appellate court had erred in fact and law that such an amount of Rs.65,700/- was correctly entered in the borrower firm's account. The lower appellate court had recorded contrary finding at one stage taking note of the acknowledgement of liability vide letter dated 26.11.1982 and on the other land relied upon the incorrect entry in the Bank account without any proof. The Bank's statement was duly verified and proved by two officers of the Bank. They were S.N.Prasad and Madho Prasad, erstwhile Branch Managers, SBI, Raja Darwaja, Varanasi. The respondent has insisted that one Madho Prasad was required to prove the account entry. This official was later on dismissed as a result of departmental enquiry. However the Bank had produced its branch manager to prove the documents. If the respondent borrower was to gain something from the evidence of Sri Madho Prasad, he could have made a formal request to the court for summoning the said witness and examining him. No such effort was made by the borrower firm before the courts below.
The lower appellate court has in fact misread the evidence on record and ignored the fact that no evidence was laid by the borrower firm in support of its pleadings in the written statement and additional written statement. Learned 4 counsel for the SBI has relied upon the cases of Chandrdhar Goswami and others Vs. Gauhati Bank Ltd. (AIR 1967 SC 1058), Sajjanraj Swarupchand Vs. Mehta Commercial Co. (AIR 1973 Gujarat 57, State Bank of India Vs. Yumnam Gouramani Singh (AIR 1994 SC 1644) and Syndicate Bank Vs. R.Veeranna and others (2003) 2 SCC 15 Learned counsel for the respondent has opposed the appeal. According to him the suit altogether was based on wrong, false and baseless allegations. The defendant was persuaded by one Sri S.N.Prasad and Sri Madho Prasad the erstwhile Managers of S.B.I., Raja Darwaza, Varanasi to open a current account in the said bank. Madho Prasad , the then Manager on opening the current account with the Bank had accommodated the defendant by granting several overdraft at the initial stage. Thus he gained immense confidence of defendant No.2. It has been alleged that the said branch of S.B.I. was not maintaining the account properly. There occurred manipulations and fabrication in the defendant's account. The account books maintained in the said Raja Darwaza branch of S.B.I., Varanasi were not worth reliable . There were several instances of Sri Madho Prasad, the Manager of the Bank cheating its customers. However, later on he was charge sheeted and departmental enquiry was held against him which had resulted in removal of his service. The Bank with full knowledge of bungling and manipulation carried out by the said managers is now trying to fasten the uncalled for liability on its account holders. Learned counsel for the defendant respondent has further submitted that a sum of Rs.20,000/- was paid to Madho Prasad on 25.8.91 for depositing in the current account of the defendants. This amount was not deposited as no entry was shown in the account of the defendant. Some blank cheques with signatures were taken by the said Manager. The defendant has already settled his account with the Bank and no amount of loan is to be repaid by him.
Later on the defendant had sought amendment in the written statement. By filing of the additional written statement, a new plea was taken that he had deposited Rs.65,7000/- in the Bank and entry to this effect was made in his account on 30.12.1981. Much stress has been laid by the learned counsel for the defendant that the entries made in the account book has to be treated as an evidence which supported the version of the defendant that they had cleared the loan amount and there was nothing against them on the debit side. This amount must have been 5 credited in his current account. The provisions of Bankers Book Evidence Act infact supports the case of the defendant that such an entry recorded deposit of Rs.65,700/- on 30.12.1981 in the statement of account and it ought to have been read in his favour. Learned counsel for the defendant has reiterated the pleas taken before the trial court and the first appellate court. He has summed up that the judgment and order dated 8.5.1997 passed by the first appellate court is wholly erroneous and uncalled for and no substantial question of law arises for adjudication by this Court. The judgment passed by the trial court deserves to be set aside and the judgment and the judgment and decree passed by the first appellate court is liable to be upheld.
I have heard learned counsel for the parties and perused the record.
In the present case the trial court has passed a detailed well considered judgment and order after framing 8 issues covering the dispute. It was incumbent upon the borrower to have produced a pay-in-slip, receipt voucher or any other document in support of his statement that he had deposited Rs.65,700/- with the appellant Bank for the purpose of the payment of loan taken by him. The finding of the first appellate court against the Bank is wholly unfounded . They are based on unfounded pleas. It was the burden of the borrower firm to have established as to where and in what manner the amount of Rs.65,700/- was deposited by him. No documentary or oral evidence was ever produced before the courts below and in this Court as to when and how the amount of Rs.65,700/- was tendered to the Bank or to whom it was presented. No document or voucher is available on record regarding deposit of the said amount on 30.12.81 in the loan account. Mere oral statement before the court and highlighting a mistake which remained in account for a day or two would not be enough to prove that borrower had in fact deposited the amount and cleared the loan after settling the account.
In the present case the lower appellate court has totally overlooked the fact that the defendant borrower had failed to produce any evidence regarding the deposit of the said amount on 30.12.1981. In fact no such averment was made in the original written statement. Later on, by an amendment for the first time a new defence was prepared. The borrower cannot take undue advantage of some mistake which crept in the entries. He cannot take a different stand after acknowledging his liability and confirming the statement of account.
It is noteworthy that the defendant borrower had acknowledged his liability of repayment through a balance statement letter dated 26.11.1982. Through the statement dated 26.11.1982, he had conceded , acknowledged the liability that he owes a substantial amount to the Bank . This "balance statement letter" was duly signed by the borrower on 26.11.1982 acknowledging the debt. Thus mere existence of an incorrect entry which remained in the account for one or two days cannot be weighed in preference to this written acknowledgement of liability. The Bank had produced a statement of account duly verified in terms of the provisions of the Banker's Book Evidence Act and it was clear and categorical proof of the balance of the amount available in the current account of the respondent. The appellate court without any evidence only relying on a mistake has wrongly held that Rs.65,7000/- were credited in the account of the borrower. The findings in this regard are wholly unfounded and are perverse giving rise to the substantial question of law. A contradictory opinion has been recorded by the first appellate court without giving genuine reasons in reversing the findings of the trial court. The appellant's case is squirely covered by State Bank of India Vs. Yumnam Gouramani Singh (AIR 1994 SC 1644).
The first appellate court has ignored that the Branch Manager of SBI Raja Ka Darwaja , Varanasi had appeared in the court and verified the entries in the account book. The other concerned bank official has also verified the entries. They were put to cross examination by the borrower. The lower appellate court has misread the evidence on record. The borrower defendant had failed to lead any evidence before the Court to discharge his burden and demonstrate that he was not liable to pay the amount of loan borrowed by him from the bank. The appellant bank has been able to discharge the onus cast upon it by highlighting the debt acknowledgement letter dated 26.11.1982 duly signed and executed by the borrower defendant.
The bank has been able to explain as it has done before the two courts below regarding putting the entry of Rs.65,700/- on 30.12.1981. It has proved that the said entry had been made by the bank due to oversight or inadvertence on 30.12.1981. On coming to learn about the mistake, the bank had corrected the entry immediately, i.e., on 1.1.1982 giving the balance confirmation letter dated 26.11.1982 proving this fact. The balance in the account and the entries were acknowledged by the borrower. The appellant's case is fully covered by the 7 judgments cited in this case.
In the result, the appeal is allowed and the trial court's judgment dated 29.4.92 is upheld. The suit stands decreed. The first appellate court's judgment and order dated 8.5.97 impugned in the second appeal is set aside. In the circumstances of the case no order as to costs.
Order Date :- 5.1.2010 VPC