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TMI Blog2021 (10) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... ed analysis of disputed facts. As the 1st respondent Bank is a debtor of the petitioner, with regard to amounts held in fixed deposit, the Bank cannot have a stand that they will not pay the amounts due on maturity of the fixed deposit to the deposit holder. The monetary claims if any, of the 5th respondent against the petitioner, are not matters on which the 1st respondent Bank, which is a public sector bank, can intermeddle. It is for the 5th respondent to agitate such claims in appropriate proceedings. Admittedly, the 5th respondent who claims to have advanced money to the petitioner has not initiated any legal proceedings for realisation of the same, even after all these years. So also, the 1st respondent cannot transfer any funds that accrue to the fixed deposit of the petitioner, to any stranger, so long as there are no specific instructions to that effect from the petitioner. The petitioner has specifically pleaded that they have not issued any such instructions. The Bank has not produced any instructions issued either by the petitioner or any other person authorised by the petitioner to transfer the interest accrued on the fixed deposit to the 5th respondent. The Bank co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The receipt shows that the amount has been received from the petitioner. During 2009, the Kerala University of Health Sciences was established and the furnishing of financial guarantee was no longer required. The Syndicate of the University at its meeting held on 30.12.2015 considered the request of various Educational Agencies of Self Financing Colleges, for return of the fixed deposit receipts submitted at the time of affiliation with the University, whose affiliations had been shifted to the Kerala University of Health Sciences and it was resolved to release the FD receipts only to those colleges whose affiliations have been shifted to the Kerala University of Health Sciences, which have no outstanding dues including annual administration fee towards the University. The petitioner had outstanding dues of ₹ 3,75,000/-, which was cleared by submitting a demand draft dated 17.08.2019. By Ext.P7 dated 02.11.2019, the Registrar returned the fixed deposit to the Bank requesting to release the same to the depositor after cancelling the lien endorsed in favour of the Registrar, University of Kerala. 3. Coming to the dispute. The 1st and 2nd respondents (representing the concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 19.09.2006 and they had to provide financial guarantee on the next day, that is, 20.09.2006. It is stated that the petitioner had transferred amounts to the account of the 5th respondent for the purpose of facilitating the 5th respondent to transfer the amounts required for the fixed deposit. Reliance is placed on Ext.P2 statement of the account of the petitioner with State Bank of Travancore which shows that a sum of ₹ 18,74,700/- was transferred from the petitioner's account to the account of M/s. Compu-Needs Communication. Reliance is placed on Ext.P15 circular to submit that the Bank should have identified the customer at the time of opening of the account itself and they cannot take the stand that amount in the name of the petitioner will be released only after getting consent from the 5th respondent. Regarding the observation of the Ombudsman that interest is being credited to the 5th respondent and the petitioner had not objected to the same, it is contended that the petitioner was never aware that the Bank was crediting the interest to the account of the 5th respondent. It is the specific contention that the petitioner had not issued any such instructions t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above request. According to him, the amount of ₹ 10 lakhs was to be a loan which the petitioner had agreed to repay within three months. It is further submitted that the amount was not repaid within three months, that the petitioner requested for an extension and that there was a mutual agreement that the periodical interest from the FD will be credited to the account of the 5th respondent as the interest towards the loan amount. It is stated that the loan was thereafter being extended from time to time and no legal action was taken against the petitioner for recovery, since the 5th respondent was under the bonafide belief that the amount was secured with the University of Kerala, and that the amount will be credited to his account on maturity of the fixed deposit. The 5th respondent denied the contention that the FD account was opened in the name of the petitioner using the petitioner's money which had been transferred to the 5th respondent. The 5th respondent also contends that his permission is required to withdraw the FD amount, since it is a monetary transaction between the petitioner and the 5th respondent. A further contention is made that huge amounts are due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of all linked accounts, details of any loan granted, whether repayment of loan has been completed, status of loan account and details of TDS deducted from interest receipts to the account. 11. The report reveals the following facts: a) The Fixed Deposit account was opened in the name of the Chairman of Sree Sankara National Educational Trust endorsed in favour of the Registrar of the University of Kerala. b) In the subsequent renewal of the certificate on 12.11.2019, the FD amount is shown to have been received from the Registrar of the University of Kerala and there is no endorsement. c) During the period from the financial year 2006-07 to 2020-21 a sum of ₹ 11,65,250/- had been paid out as interest and an amount of ₹ 95,319/- has been collected as TDS. d) The 1st respondent had in their letter dated 05.03.2021 stated that the account opening form relating to the FD is not traceable and hence it cannot be produced. e) The 1st respondent Bank did not furnish any instruction given by either the 5th respondent or the petitioner or any person on behalf of the entities, regarding renewal of the deposit and credit of interest. f) From the period 21.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission before the Income Tax authorities stating that ₹ 18,74,700/- received was towards invoices for supply of computers, accessories, etc. and that ₹ 10 lakhs had been given to the Chairman of the Trust as a loan for the purpose of furnishing financial guarantee to the University of Kerala. o) According to the Report, the fixed deposit does not appear to be a benami property from both the view of the Trust and that of the 5th respondent. From the point of view of the petitioner, it is their money that they are claiming and from the point of view of the 5th respondent, it is a loan and there is a private arrangement for payment of interest. p) The report says that certain questions are unanswered as to why the Chairman settled the entire outstanding dues of ₹ 18,74,700/- with M/s. Compu-Needs Communications and on the same day took the loan of ₹ 10 lakhs from them as claimed by the 5th respondent, as to why the Bank was crediting the interest into the account of M/s. Compu-Needs Communications, as to why the Bank is denying closure of the account unless there was any written instructions from any authorised person, as to why the firm was not showin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations or such obligations of public nature casting positive obligation upon it. The Court held that there are no such conditions in respect of a private company carrying on a commercial activity of banking. The counsel submits that the Court specifically dealt with the case of a private company involved in the commercial activity of banking and was not considering the case of a public sector Nationalised Bank. So also it is submitted that the decision in Y. Sleebachan v. State of Kerala Ors. reported in [2020 KHC 631] also did not deal with the case of a public sector Nationalised Bank and will not apply to the facts of the case. Another contention that is put forward by the counsel for the petitioner is that the petitioner has challenged the order of the Ombudsman and hence the writ petition is maintainable, even otherwise. On facts, the counsel submitted that during the year 2006, when the fixed deposit was issued, there was no necessity for a savings bank account with the Bank. It is submitted that the fact that the amount for starting the fixed deposit account was debited to the 5th respondent's account has no relevance at all, since the fact remains that the FD account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tripartite agreement cannot be bilaterally modified by one of the joint account-holders for example by pledging the account with any third party including the bank itself in its capacity of creditor, so that the amount becomes payable to such third party, without the consent of the joint account-holder. Thus in Tannan: Banking Law and Practices in India [(20th Edn.), 2001, Vol. 1, Chapter VIII, p. 259.] the legal position has been summarised thus: On the view that the terms of operation of a joint account constitute a term of the contract of deposit, any variation or revocation of instructions in a joint account, whether the operation is by 'either or survivor' or 'former or survivor' can be effected only under the joint signatures of all persons entitled to operate the joint account. One of the joint account-holders thus cannot unilaterally instruct the bank not to honour cheques signed by the others, issue duplicate deposit receipt, premature repayment or loan against fixed deposit. (emphasis supplied) The Hon'ble Supreme Court was dealing with the inter se rights of joint holders of a Fixed Deposit. While considering the issue, the Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that the contract relating to the FD comes within the private law domain and has no public law element in it, justifying interference under Article 226 of the Constitution. 16. Sri Sadchith P. Kurup, Standing counsel for the 1st respondent relied on the decision of the Hon'ble Supreme Court in Federal Bank Ltd. v. Sagar Thomas Ors. reported in [AIR 2003 SC 4325] and the decisions of this Court in K.C. John Anr. v. Liquidator, Wadakkanchery Housing Co-operative Society Ltd. Ors. reported in [2006 KHC 300], Association of Milma Officers, Ksheera Bhavan, Trivandrum Anr. v. State of Kerala reported in [2015(1) KHC 779], The Choondacherry Service Cooperative Bank v. Meenachil Rubber Marketing Processing Co-operative Society Ltd. Ors. in W.P. (C) No. 18243 of 2015, Meenachil Rubber Marketing Processing Cooperative Society Ltd. Ors. v. The Choondacherry Service Cooperative Bank reported in [2018(2) KHC 180], Kerala State Co-operative Rubber Marketing Federation Ltd. v. Poovarany Service Co-operative Bank Ors. in W.A. No. 1597 of 2009, Marangattupilly Service Co-operative Bank Ltd. v. The Gandhigram Agro-based Industrial Co-operative Society Ors. in W.P. (C) No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed seeking return of the title deeds. The Full Bench held that even in cases where the facts are admitted, jurisdiction cannot be exercised unless the authority against whom the writ is sought for, owes a public duty or a statutory duty to act in a particular manner towards the person who asked for such writ. The Full Bench found that the petitioner before the Court, who was a member of the 2nd respondent Primary Co-operative Society, which in turn was a member of the 3rd respondent Apex Society had an alternate remedy for resolution of the dispute under Section 69 of the Co-operative Societies Act. The Full Bench further held that the question whether the issue involved is within the public law or the private law domain must be decided in each case with reference to a particular action, the activity in which the State or the instrumentality of the State is engaged while performing the action complained of. 19. In Association of Milma Officers' (supra) a larger Bench of this Court considered the question whether a writ petition was maintainable against a Co-operative Society registered under the Kerala Co-operative Societies Act. The Larger Bench held that when the compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the meaning of Article 12. 20. In W.P.(C) No. 18243 of 2015, while considering the question whether the petitioner who had fixed deposits with a Cooperative Society is entitled to return of the same on maturity and whether a writ petition was maintainable for a direction to the society to return the amount, a learned Single judge held that the petition is maintainable and directed the Society to pay the amounts. The judgment of the learned Single Judge was challenged in Writ Appeal No. 1977 of 2017 and the Division Bench of this Court allowed the appeal, relying on the decision in K.C. John (supra). The Division Bench held that there is no pleading in the writ petition regarding violation of any statutory provisions or breach of any public duty and in the absence of such pleadings, the question of maintainability cannot be decided. The Court further found that there was an alternate remedy available under Section 69 of the Cooperative Societies Act. 21. In the judgment in Writ Appeal No. 1597 of 2009, a Division Bench of this Court considered the question whether a writ can be issued directing repayment of amount which had been deposited, on its maturity. The Division B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it is a case where liabilities are admitted. 23. In a recent decision in Radha Krishna Industries v. State of Himachal Pradesh Ors. , the Hon'ble Supreme Court has considered and spoken about the entertainment of writ petitions under Article 226, when an alternate remedy is available. After considering the earlier decisions of the Court, in paragraph 28 of the judgment, the Apex Court stated the legal position thus: 28. The principles of law which emerge are that: (i) The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well; (ii) The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the power of the High Court is where an effective alternate remedy is available to the aggrieved person; (iii) Exceptions to the rule of alternate remedy arise where, (a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution; (b) there has been a violation of the principles of natural justice; (c) the order or proceedings are wholly without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holder. The monetary claims if any, of the 5th respondent against the petitioner, are not matters on which the 1st respondent Bank, which is a public sector bank, can intermeddle. It is for the 5th respondent to agitate such claims in appropriate proceedings. Admittedly, the 5th respondent who claims to have advanced money to the petitioner has not initiated any legal proceedings for realisation of the same, even after all these years. So also, the 1st respondent cannot transfer any funds that accrue to the fixed deposit of the petitioner, to any stranger, so long as there are no specific instructions to that effect from the petitioner. The petitioner has specifically pleaded that they have not issued any such instructions. The Bank has not produced any instructions issued either by the petitioner or any other person authorised by the petitioner to transfer the interest accrued on the fixed deposit to the 5th respondent. The Bank could not have acted on instructions of the 5th respondent, since the 5th respondent is a stranger to the contract. In view of the authoritative pronouncements of the Apex Court which have been extracted above and that of a Division Bench of this Court tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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