Bank appealed a decree dismissing a suit for recovery of misappropriated funds. The High Court held the suit was barred by limitation as the cause of action accrued upon detection, not the acquittal date. The claim also failed on merits as the bank failed to prove the fictitious person or forgery.
Appeal dismissed; no costs awarded to either party.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN & THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
FRIDAY, THE 13TH DAY OF OCTOBER 2017/21ST ASWINA, 1939
RFA.No. 39 of 2005 ( )
----------------------AGAINST THE ORDER/JUDGMENT IN OS 93/1996 ON THE FILE OF SUB COURT, SULTHAN BATHERY DATED 10-09-2004
APPELLANT(S)/PLAINTIFF :
CANARA BANK, HAVING HEAD OFFICE AT 112 JAYACHAMARAJENDRA ROAD, BANGALORE, HAVING A BRANCH AT SULTHAN BATHERY AND, REPRESENTED BY DEPUTY GENERAL MANAGER.
BY ADV. SHAHNA KARTHIKEYAN
RESPONDENT(S)/DEFENDANT :
T.K.LAKSHMI NARAYANAN EX-EMPLOYEE OF CANARA BANK, GOWRI BUILDINGS, PERUMAL KOVIL VILLAGE,, KOLLANGODE.
BY ADV. SRI.N.HARIDAS BY ADV. SRI.ANTONY MATHEW
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 13-10-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
AMV
'CR'
P.N.RAVINDRAN
&
DEVAN RAMACHANDRAN, JJ
R.F.A.No.39 of 2005
Dated this the 13th day of October, 2017
JUDGMENT
DEVAN RAMACHANDRAN, J
A suit is laid on file by a Bank against its erstwhile employee alleging that he had misappropriated certain sums of money - not an unusual scenario, except that the suit is filed over thirty years after the alleged misappropriation was concededly detected by the Bank. The explanation of the Bank for this is that they had initiated criminal proceedings against him which took more than thirty years to conclude travelling all the way to the Hon'ble Supreme Court and being finally concluded by an acquittal of the employee.
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in their service. For the purpose of convenience, we will refer to the parties as they are arrayed in the civil court. We will, therefore, refer to Canara Bank as the plaintiff and Sri.T.K.Lakshmi Narayanan as the defendant.
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8.10.1973 through two cheques. The bank further says that the defendant similarly fabricated 19 other mail transfer advices, again purported to have been originated from several branches of the bank, and that a total amount of Rs.2,90,000/- was thus credited in to the account of Sri.T.R.Raman, which was eventually withdrawn in its full by the defendant using cheques drawn on the said account. It is the specific case of the bank that the entire amount of Rs.2,90,000/- was withdrawn by 7.10.1974.
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was, thereafter, confirmed by the Honourable Supreme Court in a further criminal appeal.
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recovered by the investigating officer in the criminal case against the defendant. The plaintiff has filed this appeal assailing the judgment and decree of the court below.
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defendant, which finally culminated only in the judgment of the Hon'ble Supreme Court on 11.08.1994, they are entitled to file a suit invoking Article 58 of the Limitation Act within a period of three years from 11.08.1994. They further contend that since the suit was thereafter filed on 12.03.1996, well within the period of three years from the judgment of the Hon'ble Supreme Court, their suit cannot be found hit by limitation. The alternate contention, which is more or less in the nature of a second limb to the one above, is that since the defendant had misappropriated the money belonging to the Bank, he should be treated to be a trustee in custody of such amounts and, therefore, that since the amount represents a trust in the hands of the defendant, Section 10 of the Limitation Act would apply, thereby indicating that there is no period of limitation at all in recovering the same.
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independently, since the findings of the court below are vehemently assailed before us by the counsel on either side to the extent to which they are against their respective clients.
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filed to obtain any other declaration and fixes the period as three years after the right to sue first accrues. This article resides in Part III of the Schedule to the Act, which prescribes the periods of limitation, and relates to suits relating to declaration. Articles 56 and 57, which are the other two articles in the said part prescribes the periods of limitation for suits filed to declare the forgery of an instrument and to obtain a declaration that an alleged adoption is invalid respectively. After providing for these two specific instances, Article 58 fixes three years as the period of limitation to obtain any other declaration from the date when the right to sue first accrues.
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they take refuge under Article 58 of the Act to assert that their cause of action arose only after the judgment of the Hon'ble Supreme Court, that too confirming the respondent's acquittal by this Court earlier.
30.While enacting Article 58 of the 1963 Act, the legislature has designedly made a departure from the language of Article 120 of the 1908 Act. The word “first” has been used between the words “sue” and “accrued”. This would mean that if a suit is based on multiple causes of action, the period of limitation will begin to run from the date when the right to sue from accrues. To put it differently, successive violation of the right will not give rise to fresh cause and the suit will be liable to be dismissed if it is beyond the period of limitation counted from the day when the right to sue first accrued.
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action that they may claim is only subsequent to it and could not extend the periods of limitation for filing the suit.
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court below that the period of limitation under Article 58 of the Limitation Act would arise only after 11.08.1994, being the date on which the Hon'ble Supreme Court delivered judgment, cannot obtain forensic support.
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that may arise in the minds of the plaintiff if we are to dismiss this appeal as grounds of limitation alone.
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Bank.
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Sri.T.R.Raman declared in the Bank was 'Teacher, Aided Upper Primary School, Cheeral'. So, therefore, what was attempted to be shown by the plaintiff through Ext.A84 and through the testimony of PW5 is that the address of Sri.T.R.Raman was not genuine. An axiomatic inference was then sought to be drawn that if the address was fictitious, then Sri.T.R.Raman is also fictitious. We cannot, however, find this to be a reasonable way of establishing that a particular person is fictitious. Even going by the plaint allegations, the account was opened in the name of Sri.T.R.Raman either by him or by somebody else, with a specific intention to commit misappropriation. It is therefore only logical that a person who opened such an account would not give his address or name correctly. Merely because the address is found to be incorrect, a hypothesis cannot be drawn as an automatic inference that the person is also fictitious. We are distressed that nothing has been lead in evidence even in this proceedings or even before the court below in establishing that the aforementioned Sri.T.R.Raman is a fictitious person. We leave it there.
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manager of the Sulthan Bathery Branch of the plaintiff's Bank. On an examination of the testimony of PW1, it becomes more or less luculent that his testimony would not in any manner support the allegations made in the plaint. This is because PW1 concedes, without leaving any case for doubt, that he signed the account opening form as also the specimen signature card for the purpose of opening the account in the name of Sri.T.R.Raman. He does not say why he did that except by stating that he did so to avoid an audit objection. According to him, these papers were presented before him by the defendant for the purpose of opening an account and that he signed the same as a manager without verifying its contents. Even though it is his specific assertion in his testimony that he did not know who this Raman was, he concedes and admits without any reservation that he has signed the account opening form as well as the specimen signature card showing the signature of Sri.T.R.Raman. This can only lead us to an inference that the allegation that the account was opened by the defendant in a clandestine and surreptitious manner, with an intention to create a mechanism for misappropriation has not been proved, even on the preponderance of possibility doctrines, against the defendant.
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fact, forensically examined during the criminal proceedings under orders of this Court and the report of the handwriting experts had also been obtained. Unfortunately for the plaintiff, the opinion of the handwriting expert is contrary to their assertion and this Court in Ext.A3 has found that there is absolutely no tangible evidence to establish that the said credit slips had been tampered or fabricated by the defendant.
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method to conclude that the signatures in Ext.A47 to A83 were actually signed and created by the defendant. We do not find any other evidence on record to even indicate that the defendant could be linked to the cheques that were presented, namely Exts.A47 to A83. The evidence of PW1, as we have already discussed above, would also not come to the aid of the defendant since he unequivocally states all these cheques and the mail transfer advices were passed by him without following any of the requisite formalities.
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hardly any thing in the plaint averment to establish these facts and the plaint does not even say on what basis these allegations are made. The plaintiff virtually concedes that these allegations have been made only because of the recovery made by the investigating officer in the criminal case and that they have built this claim singularly on the basis of the list of articles placed before the criminal court by the investigating officer.
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return of these articles to the defendant as per Ext.B1 order, after rejecting the objections raised by the plaintiff therein. This submission is particularly pertinent because the criminal appeal before the Hon'ble Supreme Court was initiated and concluded at the instance of the plaintiff themselves since the prosecution had not filed such an appeal. The reason why the prosecution did not file such an appeal is also obvious from Ext.A3 judgment, which records that the prosecution had given up the allegation that the defendant was guilty of misappropriation of 2,90,000/-, but that₹ they confined the charge only to the misappropriation of an exiguous sum of 4,000/- allegedly drawn by the defendant through₹ a particular cheque dated 06.10.1973, which has been marked in evidence in this case as Ext.A50. Once this Court, in Ext.A3 judgment, found that the prosecution has given up the charges against the defendant except 4,000/- it was quite natural that the₹ prosecution did not deem it necessary to take up the matter in a further appeal before the Hon'ble Supreme Court. The plaintiff, however, took the burden and prosecuted the appeal before the Honourable Supreme Court but unsuccessfully.
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conclude that these articles represent the amounts allegedly misappropriated, the factum of such misappropriation itself being unproved. We, therefore, find that the court below has arrived at conclusions through a cogent and reasonable assessment of the materials and evidence on record and we see no cause in this appeal to disturb the same.
Needless to say all interim orders, if any, in this file will also
stand vacated.
Sd/- P.N.RAVINDRAN JUDGE
sd/- DEVAN RAMACHANDRAN JUDGE
vpv /AMV
/TRUE COPY/ P.A.TO JUDGE
The words “ Section 5 ” occurring in the 3rd sentence in paragraph No.19 of the judgment dated 13/10/2017 are corrected as “ Section 14 ” and the words “ if maintainable ” are added after the words “ Limitation Act ”. After such correction, the third sentence shall be read as:
“ At the best, the Bank can only maintain that the delay during which they waited for the criminal proceedings to conclude be condoned under Section 14 of the Limitation Act, if maintainable, by filing an appropriate application for such purpose along with the suit, which they did not do”.
As per order dated 16/02/2018 in R.F.A.No.39/2005.
Sd/Registrar (Judicial)
3 issues framed by the court
Whether the period of limitation for the suit commenced from the date of the Supreme Court judgment acquitting the defendant or from the date the misappropriation was detected.
Whether the misappropriated amounts can be treated as held in trust by the defendant so that Section 10 of the Limitation Act applies.
Whether the plaintiff established that the account holder was fictitious and that the defendant fabricated documents and forged signatures.
Colour shows how this judgement treated each authority
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4 provisions across 2 enactments
CANARA BANK
T.K.LAKSHMI NARAYANAN
P.N.RAVINDRAN
DEVAN RAMACHANDRAN
As recorded by the court registry
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