Mr. Chander Kalani And Anr vs State Bank Of India Thr. Its … on 29 June, 2021

8 minutes read

Bombay High Court

Bench: K.K. Tated, R. I. Chagla

                                                             5-IAST-98257-20.doc

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                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                        CIVIL APPELLATE JURISDICTION
                    INTERIM APPLICATION (ST) NO. 98257 OF 2020
                                          WITH
                              FIRST APPEAL NO. 1345 OF 2019
        Mr. Chander Kalani & Anr.                           ...Applicants
                Versus
        State Bank of India                                 ...Respondent
                In the matter of
        State Bank of India                                 ...Appellant
                Versus
        Mr. Chander Kalani & Anr.                           ...Respondents
                                          ----------
        Mr. Rizwan Siddique i/by Siddiquee & Associates for the
        Applicants.
        Dr. Abhinav Chandrachud a/w Mr. Ravi Goenka, Mr. Abhishek
        Bhaduri, Goenka Law Associates for the Respondent-
        Org.Appellant/present Respondent.
                                          ----------

                                          CORAM :        K.K. TATED &
                                                         R.I. CHAGLA, JJ.
                                          DATE         : 29 June 2021

        ORDER :

1. Heard the learned Counsel for parties.

2. By this Interim Application, the Applicant original complainant is seeking permission to withdraw the amount deposited by the Appellant – State Bank of India pursuant to 5-IAST-98257-20.doc the order dated 15th October, 2020 passed by this Court in Civil Application (St.) No.24647 of 2019.

3. In the present proceeding, the Applicant has fled the complaint for adjudication under Section 46 of the Information Technology Act, 2000 before Adjudicating Offcer. In that complaint the Applicant stated that the Appellant Bank on the basis of fraud email released the fied deposit amount of Rs.63,00,000/- in favour of the third party. It is the case of the Applicant that 6 fied deposits were in the joint names of both Applicants. On the basis of the alleged email in the name of Applicant No.1, the Appellant Bank released Rs.63,00,000/- in favour of third person. When the Applicant requested the bank to reimburse the said amount they failed and neglected to do so. Hence the Applicant has fled complaint No.1 of 2014 on 30th December, 2013 before the Adjudicating Offcer.

4. The Adjudicating Offcer after hearing both sides vide its order dated 12th January, 2015 held that the Appellant bank as per Section 43 A of the Information Technology Act, 2000 (for short “the Act”) is liable to pay compensation of 5-IAST-98257-20.doc Rs.40,00,000/- (Rs. Forty lakhs only) to the Applicant, to cover partly their loss within a month from the said order, failing which they have to pay interest @ 12% compounded monthly.

5. Being aggrieved by the said order dated 12th January, 2015, the bank preferred Cyber Appeal No.13 of 2015 before the Telecom Disputes Settlement & Appellate Tribunal, New Delhi. The Appellate Tribunal after hearing both sides dismissed the said Appeal with costs of Rs.25,000/-. The operative part of the said order reads thus:-

“23. In the result, we fnd no merit in the Appeal. It is dismissed accordingly. The amount of compensation awarded to the respondents should be made available to them, if not already made available, within one month from today failing which it shall become payable with interest @ 8% per annum with annual rest, from the date of the order of Adjudicating Offcer till the date of realization. The respondents are also held entitled to Rs.25,000/- as consolidated cost of the Appeal. This shall also be payable along with the compensation awarded.”

6. In spite of the dismissal of Appeal, the Appellant Bank failed and neglected to pay said amount to the Applicant. Hence the Applicant made application before Competent 5-IAST-98257-20.doc Authority for eiecution of the said order. The Competent Authority vide its order dated 13th August, 2019 directed the bank to pay the said amount within one month, failing which adverse actions will be taken under Section 64 of the Act. The operative part of the said order reads thus:-

“It has been more than 4 years since the order was passed by this forum and still no payment has been made by the Respondent. No stay on the order of this Court has been received from the Hon’ble High Court. Hence, Respondent is given a fnal chance to compensate the complainant with Rs.40,00,000/- along with 8% interest compounded monthly and an additional cost of Rs.25,000/- as cost of appeal as per the order of the Hon’ble Tribunal. Respondent is further directed to pay an additional 12% interest compounded monthly from July 31, 2018, i.e. the date of the Judgment passed by the Hon’ble Tribunal. Respondents are directed to comply with this order within one month, failing which, adverse actions will be taken against the Respondent under Section 64 of the Information Technology Act, 2000.

7. In spite of the said order, the Appellant bank failed to pay the said amount. Hence, the Applicant moved again before the Competent Authority for issuing Revenue Recovery Certifcate against the Appellant bank. The Authority vide its order dated 24th January, 2020 directed the Collector and 5-IAST-98257-20.doc District Magistrate to recover the said amount with costs immediately. Thereafter the Appellant Bank preferred the present First Appeal in the month of March, 2019 and moved for stay. The Civil Application (St.) No.24647 of 2019 for stay was decided by this Court vide its order dated 15th October, 2020 and stay was granted on the condition that the Appellant bank shall deposit the entire amount along with interest in the Registry. The operative part of the said order dated 15th October, 2020 reads thus:-

11. In view of above mentioned facts, following order is passed:-

A. Applicant is directed to deposit entire amount along with interest as per order dated 12.01.2015 passed by Adjudicating Offcer in the Registry of this Court on or before 05.11.2020.

B. If amount is deposited in time, there shall be interim relief in terms of prayer clause (a) which reads thus:

“(a) This Hon’ble Court be pleased to stay the operation and eiecution of the orders dated 31st July, 2018 and 12th January, 2015.”

C. If amount is deposited, Applicant to intimate the other side in writing.

5-IAST-98257-20.doc D. Registry is directed to invest entire amount in fied deposit of any nationalized bank initially for a period of one year and same be continued till further orders.

E. Liberty granted to the Respondents to prefer appropriate application if they so desire for withdrawal of the amount and that be decided on its own merits.

F. Civil Application stands disposed of accordingly.

G. No order as to costs.

H. This order will be digitally signed by the Private Secretary of this Court. All concerned will act on a digitally signed copy of this order.

8. By the said order, this Court granted liberty to the Applicant to prefer appropriate application for withdrawal of the amount, if they so desire. It has been pursuant to the said liberty that the Applicant preferred the present application for withdrawal.

9. Learned Advocate for the Applicants submits that both the Applicants are senior citizens. They lost 5-IAST-98257-20.doc Rs.63,00,000/- in 2013 because of negligence on the part of Appellant bank. He submits that sum of Rs.63,00,000/- was lying with the Appellant bank in fied deposit in joint names of both the Applicants. He submits that neither Applicant No.1 nor Applicant No.2 sent any email to the Appellant Bank. He further submits that the Appellant Bank on the basis of fraud email from third person, in the name of Applicant No.1, released the said amount in favour of third person. When the Applicants requested bank to reimburse the said amount, they failed and neglected to do so. Hence the Applicants approached Adjudicating Offcer under Section 46 of the Act. The Adjudicating Offcer instead of awarding Rs.63,00,000/- (Rs. Siity three lakhs only) with interest compensated only Rs.40,00,000/- (Rs. Forty lakhs only) holding that the Applicant is also responsible in the present case.

10. The learned Counsel for the Applicants submits that though Applicant No.1 is an NRI, he is staying in Mumbai for more than four years. His address is shown in cause title of the present proceeding. He submits that since both the Applicants incurred loss of Rs.63,00,000/- (Rs. Siity 5-IAST-98257-20.doc three lakhs only) because of the negligence on the part of Appellant Bank offcers, the Applicants should not be punished for that. He submits that the Applicants required the said amount for their business purpose. Hence this Hon’ble Court be pleased to allow the Applicant to withdraw the said amount during the pendency of the First Appeal. He submits that if the Applicant is allowed to withdraw the said amount, no irreparable loss would be caused to the Appellant Bank.

11. On the other hand, learned Counsel Dr. Chandrachud appearing on behalf of the Appellant Bank vehemently opposed the present Interim Application. He submits that if the entire amount is withdrawn by the Applicants, then nothing will survive in the present proceedings. He submits that both the Applicants are NRI and if the Appellant bank succeeds in the present proceedings, then it would be very diffcult for them to recover the said amount. He further submits that in any case, as on today the said amount is lying in fied deposit, so that they can earn some interest, which is benefcial to whosoever succeeds in the First Appeal. Therefore, there is no question of allowing the 5-IAST-98257-20.doc Applicant to withdraw the said amount without furnishing any security.

12. Learned Counsel for the Appellant Bank submits that bare reading of the orders passed by Adjudicating Offcer as well as the Appellate Authority clearly shows that the Applicant himself was also responsible for releasing the said amount in favour of the third person. Both of them never informed the Appellant bank of the change in the mobile numbers. Hence it remained on the part of the bank to verify the said email through sms alert. On the basis of this submission, the learned Counsel for the Appellant bank submits that there is no substance in the present Interim Application and the same is required to be dismissed with costs.

13. We heard both sides at length. It is to be noted that in the present proceedings, the Appellant bank transferred sum of Rs.63,00,000/- from the account of the Applicants in favour of a third party on the basis of a fraud email. During the course of argument, when this Court called upon the Advocate 5-IAST-98257-20.doc for the Appellant bank to eiplain any provision or bye-law of the bank, which permitted them to act on the basis of an email and release the amount from the customers account, he failed to show the same.

14. It is to be noted that in the present proceeding both the Applicants are senior citizens and they have lost near about Rs.63,00,000/- (Rs. Siity three lakhs only) in the year 2013. Though the Adjudicating Authority vide its order dated 12th January, 2015 directed bank to pay the said amount to the Applicants, they failed and neglected to do so. They fled Appeal in the year 2015 before the Telecom Disputes Settlement & Appellate Tribunal, New Delhi. That Appeal was also unsuccessful.

15. It is to be noted that though the order was passed by the Appellate Authority on 31st July, 2018 and no stay having been granted, the Appellant bank failed and neglected to deposit and or to pay said amount to the Applicants. They fled the First Appeal in the year 2019 and moved for interim relief by way of Civil Application. The 5-IAST-98257-20.doc submission made by learned Counsel for the Appellant Bank that they deposited more than Rs.80,00,000/- (Rs. Eighty lakhs only) which includes interest in the Registry of this Court. This is nothing but on account of the negligence on the part of the Appellant bank’s offcers to deposit the said amount earlier. If the bank desires they can recover the said amount from the concerned offcer by holding appropriate inquiry.

16. In view of the above mentioned facts, we are of the opinion that the Applicants can be permitted to withdraw the entire amount with the interest on their personal undertaking that, if this Court called upon them to refund the entire amount, they will do the same with interest, if any, as per the Court orders. Hence the following order is passed:-

(i) The Applicants are permitted to withdraw the amount deposited by the Appellant bank in the Registry of this Court as per order dated 15th October, 2020 passed in Civil Application (St.) No.24647 of 2019 with accrued interest on personal undertaking before the Registry that, if this Court called upon them to bring the entire amount with interest, 5-IAST-98257-20.doc they will do the same immediately.

(ii) Interim Application stands disposed of accordingly with no order as to costs.

[R.I. CHAGLA J.] [K.K. TATED, J.]

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