The Vysya Bank Ltd., Madikonda Branch Vs K. Venkat Rao

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132't7 1

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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FRIDAY, THE FOURTEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE

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PRESENT

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THE HONOURABLE SRI JUSTICE N.TUKARAMJI

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APPEAL SUIT NO: 296 OF 2002

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Appeal filed under section 96 of CPC against the Judgment and Decree dated 12-06-2001 made in O.S.No.'106 of 1998 on the file of the ll Additional Senior Civil J udge,. Warangal,

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Between:

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The Vysya Bank Limited, Madikonda Branch, Warangal District rep. by its Branch Manager.

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...APPELLANT(PLAINTIFF)

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AND

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K. Venkat Rao S/o Narayana, Age: 44 Years, Business R/o H.No.8-5-12, Station road, Warangal

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...RESPONDENT(DEFENDANT)

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Counsel for the Appellant: Sri B. Adinarayana Rao

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Counsel for the Respondent: Sri M. Vivekananda Reddy

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The Court delivered the following: JUDGMENT

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I-ICTNIOURABLE SRI JUSTICE N. TUKi\R,AMJl

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APPEAL SUIT NO.296 ol 2OO2

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JUDGMENT:

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I have lreard lVlr. B. Adinarayana Rao, learnec Counsel for the appellant and Mr. C.Anand Hitesh, learned counsel, representing Mr. M.Vivekananda Reddy, learned counsel on record, for respondent.

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2 This appeal has been preferred by the appellant/plaintiff assailing the riecree and^judgment dated^'12.06.20C 1 in O.S.No 106 of 1998 cn the file of the ll Additional Senior Ci,'ril .ludge, at Warangal

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3 Briefly stated, the relevant facts arc tl' at, the appellanUplaintiff (hereinafter 'the plaintiff) instituted the suit seeking recovorv of Rs.1,45,429l- along with future intere:st at the rate of 24ok per annum, compounded quarterly. The claim was based on t re allegation that the respondenVd,--fendant (hereinafter 'tlre defendant'), a customer of the plaintff bank, maintained a flerible fixed deposit account. Through this account, the defendant alregedly acquired stocks in his name anrj that of his relatives, zrs well as other investment instruments, despite

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NTR,J AS 296_2002

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there being no corresponding credit balance in the account. The plaintiff contended that the requisite funds for these investments were disbursed by the bank on behalf of the defendant. The plaintiff further pleaded that, due to a fire that occurred on 08.06.1995 at the bank's premises, certain documents and records were destroyed. While some suspicions of managerial connivance were raised, the plaintiff stated that the records were subsequently reconstructed using the remaining available data On the basis of these reconstructed records, the plaintiff asserted that payments were made by the bank for which corresponding share allotments were received. Accordingly, the plaintiff argued that the defendant is liable for the suit amount

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In response, the defendant entered an unequivocal denial of the allegations. He contended that even the particulars mentioned in the plaint were incorrect and denied any knowledge or involvement in the alleged share transactions. The defendant further asserted that he had never approached the plaintiff bank for the issuance of stock investment instruments. He argued that the suit was filed without furnishing sufficient^particulars and was based solely on assumptions. Moreover, he challenged the

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validity of the so-called reconstructed account, staling it was a unilateral act,on taken without notice to him, rendering the process arbitrary and self-serving. On these !,rou1ds, the defendant pra yed for dismissal of the suit

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The Triurl Court proceeded to frame the following issues for determ ination

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Whether he surt is filed without disclosing mateial particulars of the trans.,ction is maintainable?

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Whether the plaintiff is entitled for the suit claim?

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Whether plaintiff bank is a scheduled commercial bank?

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To what r,>lief?

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During the trial, the plaintiff bank examined its manager as PW-1 and sutrnritted documentary evidence markec as Exs. A-1 to A-28. Conversely, the defendant appeared as DUy'-'l and offered oral te stimony; however, no documentary evidence was submitted on lris behalf.

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7 . Upon e raluating the evidence, the trial Court c,tncluded that the plaintiff had failed to establish, even prima f:cle that the defendant ha,l received any amount from the bank for the purpose of investing in stocks. The trial Court found the plaintiffs

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case to be unsupported by adequate proof of the alleged transactions or flnancial disbursements. Consequently, the trial Court held that the plaintiff did not discharge the burden of proving its claim and accordingly dismissed the suit

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B. ln appeal, learned counsel for the plaintiff contended that the bank, relying on its internal records, had reconstructed the loan account, which clearly indicated that the stocks in question were purchased through the defendant's account. lt was submitted that this reconstruction directly contradicted the defendant's assertion in his written statement that he had never requested the purchase of any stocks. Counsel emphasized that the entries in the stock investment register, along with the stock investment instruments marked as Exs. A-2 to A-21 , collectively demonstrated that stocks were allotted in the defendant's name, an occurrence that could only have happened upon^payment. As it was undisputed that the defendant had not made any payments, it was argued that the bank's payment on his behalf was thereby established. Despite this, the trial Court, according to counsel, dismissed the suit without properly appreciating the evidence and instead relied on presumptions. lt was therefore

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urged that ttre appellate court interfere with the triirl court's judgment and grant appropriate relief.

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ln resp,lnss, learned counsel for the defendant submitted that the suit rvas one for recovery of dues, and accordingly, the burden of procf rested squarely upon the plaintiff to est;rblish the existence of tre underlying transaction constituting an erctionable claim. He argued that the plaintiff had merely relied on reconstructed records, without producing cogent and credible evidence sho,r/ing that the defendant had instructed thr: bank to invest in sto:ks on his behalf. Such reconstructed material, according to counsel, was insufficient to satisfy the requisite standard of proof in a suit for recovery. He further subnritted that the trial Cou 1, after a detailed and critical evaluatic,n of the evidence, rightly concluded that the plaintiff had failed to substantiate ils claim. ln the absence of any compellingl material warranting a different conclusion, counsel contended that the appeal deserves to be dismissed.

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'1 0. I have r;onsidered the submissions of the learne<l counsel and perused t re materials on record

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The plaintiff bank has instituted the present suit seeking recovery of an amount allegedly due from the defendant, based on certain transactional obligations. lt is a well-settled proposition of law that the initial burden of proof in a suit for recovery lies upon the plaintiff. The essence of the plaintiffs claim is that the defendant, through his flexible fixed deposit account, purchased stocks, for which the plaintiff bank paid the consideration amount The suit is thus brought for recovery of this amount

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Before examining the material relating to the stock investments, it is necessary to refer to the evidence led by the plaintiff. Through PW-1 , the bank outlined the framework of its "lnnovative Stock lnvestment Scheme." According to this testimony, under the said scheme, customers could link their bank accounts for the purpose of investing in stocks. Upon submission of an application by the investor, the bank would process the request with the respective companies. Once shares were allotted, the bank would make the required payment and create a lien over the investor's account. The corresponding amount would then be recovered from the investor's account. The

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scheme also envisaged the possibility of extending overdraft facilities or grarting loans in order to facilitate such investments

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ln the present case, it is alleged that the rJefendant instructed the bank to invest in stocks not only in his cwn name but also in tl- e names of his relatives and other individuals. To prove this assertion, the plaintiff relied on the oral testimony of PW-1 and a series of documents. However, it is adnritted that these docurrr)nts were reconstructed following a fire at the bank's premises. lt is also undisputed that no notice was given to the defendant at the time of reconstructing the records Be that as it may, Exs. Ai. to A-21 are the stock investment instrumr:nts; Exs. A-22 and A-23 are the legal notice and the returned pos,tal cover; and Exs. A-2,{ and A-25 comprise the statement or acr;ount and certified copies of entries from the stock investment regir;ter

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Significantly, the plaintiff failed to produce any application for allotment cf stocks allegedly submitted by the defendant. Moreover, th,r stock investment instruments are^rlndated and refer to multiple account numbers, despite the plaintiffs assertion that the defendant maintained only one account. Th,:re is no explanation offered for these material dtscrepancies.

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Furthermore, if the defendant's account lacked sufficient credit balance, it would have been incumbent upon the bank to formally create an overdraft or sanction a loan for the stock purchases. However, there is no mention either in the pleadings or in the evidence of such an overdraft facility or loan account being created.

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Even the documents marked as Exs. A-2 to A-21 are reconstructed and lack corroboration from primary evidence. Aside from asserting that stocks were purchased, the plaintiff has failed to substantiate critical aspects of its claim, such as the existence of a request or instruction from the defendant to purchase the stocks, or any transaction confirming such authorization. The bank's prolonged silence on these issues until the initiation of the suit further undermines its case

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The inconsistencies in the account numbers mentioned in the stock investment instruments, when contrasted with the plaintiffs claim that the defendant held only a single account, go to the root of the matter. These material irregularities, coupled with the absence of foundational evidence demonstrating the defendant's instructions or failure to repay, and the lack of proof )

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showing adhorence to the established investment prr>cedures, lead to the irrevitable conclusion that the plaintiff has failed to make out a pr'nta facie case.

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17 . ln this c,rntext, it is apparent that the Trial C ourt has properly considered the evidence and correctly evaluated the material on record. lt has rightly concluded that the plairrtiff failed to discharge it; burden of proof. Accordingly, the inpugned judgment anC dr:cree merit confirmation

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ln effect, the appeal is liable to be and is accordingly

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dismissed. There shall be no order as to costs.

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As a serluel, pending miscellaneous petitions if any, stands

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closed

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t

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SD/- F' GoWRI SHANKAR Dt:PUry REGISTRAR ,TRUE COPY'

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To,

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SE(}TION OFFICER

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The ll Additionerl Senior Civil Judge, Warangal. (wi cords, if any)

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One CC to Sri t). Adinarayana Rao, Advocate [OPUC]

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One CC to Sri tr4. Vivekananda Reddy, Advocate tOpUCl

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Two CD Copies

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HIGH COURT

DATED: 1410',2t2025

JUDGMENT+D,ECREE

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AS.No.296 of i1002

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DISMISSING THE APPEAL WITHOUT CC)STS

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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FRIDAY, THE FOURTEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENry FIVE

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PRESENT

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THE HONOURABLE SRI JUSTICE N.TUKARAMJI

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APPEAL SUIT NO: 296 OF 2002

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Between:

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The Vysya Bank Limited, Madikonda Branch, Warangal District rep by its Branch Manager-

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...APPELLANT(PLAINTIFF)

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AND

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K. Venkat Rao S/o Narayana, Age: 44 Years, Business R/o H.No.B-5-12, Station road, Warangal

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...RESPONDENT(DEFENDANT)

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Appeal filed under section 96 of CPC against the Judgment and Decree dated 12-06-2001 made in O.S.No.106 of^'1998 on the file of the ll Additional Senior Civil Judge, Warangal.

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This appeal coming on for hearing and upon perusing the grounds of appeal, the Judgment and Decree of the Court below and the material papers in the case and upon hearing the arguments of Sri B. Adinarayana Rao, Advocate for the appellant and of Sri M. Vivekananda Reddy, Advocate for the Respondent.

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This Court doth Order and Decree as follows:

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