IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH The Gurdaspur Central Co-opera,ve v. RSA-2357-2016
Case Details
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH The Gurdaspur Central Co-opera,ve Bank Ltd. and Ors. . . . . Appellants Vs. RSA-2357-2016 (O&M) Paramjit Kaur . . . . Respondents Reserved on: 18.03.2025 Pronounced on: 24.03.2025 **** CORAM: HON’BLE MR. JUSTICE DEEPAK GUPTA Argued by:- Ms. Paramjit Kaur Deol, Advocate for the appellants. Mr. K.S. Nalwa, Advocate for Mr. Lalit Sharma, Advocate for the respondent. **** DEEPAK GUPTA, J. CM-6229-C-2016: This is an applica’on under Sec’on 5 of Limita’on Act read with Sec’on 151 CPC to condone the delay of 4 days in filing the appeal. For the reasons men’oned in the applica’on, delay of 4 days in fil- ing the appeal is condoned. Applica’on stands disposed of accordingly. Main case.: Suit for declara’on with consequen’al relief of mandatory injunc- ’on filed by plain’ff Smt. Paramjit Kaur (respondent herein) was dismissed by the trial Court of learned Civil Judge (Junior Division), Gurdaspur vide his judg- ment dated 10.12.2014. However, the appeal filed by the said plain’ff was ac- cepted by the first Appellate Court of learned District Judge, Gurdaspur vide judgment dated 07.01.2016, thus decreeing the suit. Against this reversal, the NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document RSA-2357-2016 (O&M)
Legal Reasoning
defendant-Bank has approached this Court by way of the present regular second appeal. 2. In order to avoid confusion, par’es shall be referred as per their status before the trial Court concerned. 3.1 As per pleaded case of the plain’ff, her husband Chamel Singh ex- pired in 2003 while figh’ng with terrorists in the State of Jammu & Kashmir and she was granted an ex gra(cid:17)a amount of ₹20,00,000/- on that account, which she deposited in State Bank of India, Branch Bha’an. On the advice of her father Satnam Singh, who was serving as a Peon in Co-opera’ve Bank and had in- formed that in case the amount is deposited in Co-opera’ve Bank, she will get higher rate of interest, she deposited an amount of ₹8,50,000/- in FDR at Har- chowal Branch with defendant No.3 and deposited another amount of ₹6,00,000/- at Bha’an Branch with defendant No.2 vide different FDRs, which were in joint name of plain’ff and her father. The FDRs at Bha’an Branch ma- tured on 31.05.2011 and that in the Harchowal Branch matured on 31.10.2009 & 30.10.2010. 3.2 However when aDer maturity, pe’’oner asked the concerned Banks for release of the amount, the same was withheld on the pretext that some fraud had been commiEed at the Kahnuwan Branch, where her father was posted and that her father was involved in the said fraud. It was alleged by the Bank that amount of the FDRs pertained to the embezzled amount. Plain’ff filed complaint before District Consumer Disputes Redressal Forum, Gurdaspur but was advised to approach the Civil Court for proper adjudica’on. Plain’ff then served a no’ce under Sec’on 79 of the Co-opera’ve Socie’es Act but to no avail. 3.3 With these averments, plain’ff prayed for a decree of declara’on that she is en’tled for the release of three FDRs amoun’ng to ₹8,50,000/- from defendant No.3 and FDR amoun’ng to ₹6,00,000/- from defendant No.2 NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document Page 2 of 11 RSA-2357-2016 (O&M) Branch. She further prayed for mandatory injunc’on to direct the defendants to release the amount of the said FDRs. 4. Defendants contested the suit and raised preliminary objec’on that jurisdic’on of the Civil Court was barred under Sec’on 82 of the Punjab Co- opera’ve Socie’es Act, 1961. On merits, it was alleged that Satnam Singh, the father of the plain’ff was working in Kahnuwan Branch of the said Central Co- opera’ve Bank Ltd., where embezzlement of crores of rupees had taken place during 2003 to 2008 and that deposit of the FDRs was out of the embezzled amount in the joint name of the plain’ff and said Satnam Singh and that though the plain’ff had got the amount of ex-gra’a in 2003 but had deposited the same in bank in 2010. Defending their ac’on, the defendant Bank claimed that they had rightly appropriated the amount of FDRs toward embezzled amount as per the orders of the Assistant Registrar Co-opera’ve Socie’es, Gurdaspur. On conduc’ng the detailed enquiry, father of the plain’ff along with others was found involved in embezzlement of funds. With these submissions prayer was made for dismissal of the suit. 5. Necessary issues were framed. Evidence produced by the par’es was taken on record. The trial Court dismissed the suit but the Appellate Court reversed the finding, thus decreeing the suit, as has already been no’ced. 6. Assailing the judgment passed by the first Appellate Court, it is contended by learned counsel for appellants-defendants that well-reasoned judgment passed by the trial Court, dismissing the suit of the plain’ff-respon- dent has been wrongly reversed by the Appellate Court by mis-apprecia’on of evidence. It is also contended that specific objec’on was raised regarding bar of jurisdic’on in view of Sec’on 82 of the Punjab Co-opera’ves Act but no finding has been given thereon and as such, judgment of the first Appellate Court de- serve to be set aside and that of the trial Court is liable to be restored, dismiss- ing the suit. NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document Page 3 of 11 RSA-2357-2016 (O&M) 7.
Legal Reasoning
On the other hand, learned counsel for the respondent-plain’ff submits that evidence on record has been properly appreciated by the first Ap- pellate Court so as to decree the suit. It is further contended that Sec’on 82 of the Punjab Co-opera’ve Socie’es Act has factually no applicability to the facts of the present case and as such, the appeal deserve to be dismissed. 8. This Court has considered submissions of both the sides and have perused the record carefully. 9. Before considering the conten’ons as raised by learned counsel for the appellant-Bank, it will be apt to reproduce the observa’ons made by the first Appellate Court in its impugned judgment dated 07.01.2016, which read as under: “12. I have considered the rival conten’ons of the par’es and have gone through the evidence on the file. AdmiEedly. Chamel Singh husband of the ap- pellant died while figh’ng with terrorists in the State of Jammu & Kashmir in the year 2003 and vide document Ex. P.2 appellant was paid a sum of ₹14,79,113-by the Army authori’es, Ex P.17 is the statement of account per- taining to State Bank of India, branch Bha’an, which shows that the amounts so received by the appellant from the Army authori’es were deposited in the said account. Thus, the appellant has been able to prove the source of the amount so deposited by her in her bank account. It is also an admiEed fact that rate of interest is higher by 1% on the FDRs in the Coopera’ve bank than the other banks. As per case of the appellant, she in order to get higher rate of in- terest withdrew the amount from State Bank of India branch Bha’an and de- posited the same with the respondents no.2 and 3 in the shape of FDRs. In or- der to ascertain whether these FDRs were under the cap’on 'either or sur- vivor'. the concerned officials of the respondent-Bank were summoned and on 06.01.2016 statements of Shri Avtar Singh, Shri Baljinder Singh Branch Man- agers and Shri Malkiat Singh Cashier were recorded. From their statements, it is evident that amount of FDRs belong to Paramjit Kaur appellant only and it is she, who has got deposited this amount ini’ally with the Kahnuwan branch in the shape of FDRs on 09.01.2008 and then this amount was got transferred to NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document Page 4 of 11 RSA-2357-2016 (O&M) Bha’an and Harchowal branches of the respondent-Bank. On the other hand, the case of the respondents is that an embezzlement has taken place in the Kahnuwan Branch of the bank where Satnam Singh, father of the appellant, was working as class- IV employee and that the amount deposited by the ap- pellant in the joint name with her father is the said embezzled amount. How- ever, no documentary evidence has been produced by the respondents to prove the exact amount of embezzlement. Even the dates have not been men- ’oned when the said embezzlement took place. Simply by saying that an em- bezzlement has taken place in the Kahnuwan branch and that father of the ap- pellant along with other employees have been held responsible for the said embezzlement, it cannot be said that the amount deposited by the appellant in the joint name with her father, actually, is the embezzled amount because, as stated above, appellant has been able to prove the source of the amount de- posited by her. Even otherwise, how can a Peon be entrusted work of such a nature in bank like respondents' where he could embezzle crores of rupees. It is a maEer of common knowledge that a class-IV employee, like the father of the appellant, has no concern with the day to day official dealings of any office and a class-IV employee, especially in a financial ins’tu’on like bank, cannot be as- signed with such du’es where he is to maintain record or to handle the finan- cial maEers of the bank. If he is actually involved in embezzlement as stated by the bank, then this shows how negligent and careless were the officials of the respondent-bank and they were not doing their work themselves and rather they were geNng their work from the class-IV employees like the father of the appellant, for which ac’on should be taken against them. Moreover, respon- dents have not produced on the record any rules under which they can aEach the amount of FDRs in the joint name of the appellant and her father Satnam Singh. The Hon'ble Supreme Court in Anuma(cid:6) Vs. Punjab Na(cid:6)onal Bank, 2004(4) R.C.R. (Civil) 742 has held as under:- "Deficiency in Bank service - Joint Fixed Deposit Receipt - AEachment and set-off of joint account against individual liability of one of the joint holders of account/receipt is not permissible in the absence of express consent or undertaking of the other joint holder of it - If the amount of NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document Page 5 of 11 RSA-2357-2016 (O&M) joint account is appropriated by the bank for individual liability of one. and other joint holder is refused the payment against the terms of op- ’on allowed to be exercised at the ’me of opening of the account, it is certainly a deficiency and defect in the service and the Bank is liable to make good the loss to the account". It was also observed in the above authority that, "A fixed deposit in the joint names of two persons is nothing but a joint account which, as the name itself suggests, is repayable on the expira’on of the agreed period. The fixed deposit receipt is merely a wriEen acknowledgment by the Bank that it holds a certain sum to the use of its customers. The Bank is thus a debtor to the account hold- ers in respect of the amount deposited a debt which repayable by the bank to the account holders with interest on the expiry of an agreed period. An "either or survivor" clause in such an account means that the amount payable by the Bank on maturity of the fixed deposit may be paid to either of the account holders by the Bank in order to obtain a valid discharge. In other words under a tripar’te agreement between the joint account holders inter se and the Bank, the Bank may, on maturity, make payment only to either of them. This tripar’te 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 it- self in its capacity of creditor, so that the amount becomes payable to such third party, without the consent of the joint account holder". In this case, re- spondents have not placed on the record any document to show that appellant ever gave her consent to aEach the joint FDRs towards the alleged liability against her father. Learned counsel for the respondent-Bank could not refer any law to the contrary or the rules under which the respondent-Bank can aEach the joint FDRs against the liability of an individual. So, the act of the respon- dents in aEaching the FDRs in ques’on belonging to the appellant towards the alleged liability of her father is illegal and void. Moreover, Avtar Singh Branch Manager of the Kahnuwan Branch of the respondent-Bank has produced on the file jamabandi of the land owned by Satnam Singh, father of the appellant, which shows that 21 kanals 12 marlas of land owned by Satnam Singh has al- ready been aEached by the respondent-Bank and as per officials of the respon- NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document Page 6 of 11 RSA-2357-2016 (O&M) dent-Bank value of this land would be around ₹ 50-60 lacs. Therefore, the re- spondent-Bank can make good its loss from Satnam Singh, if he is found in- volved in the alleged embezzlement and the respondent-bank cannot aEach the amount of FDRs of the appellant.” 10. The abovesaid observa’ons made by the first Appellate Court, based upon proper apprecia’on of evidence produced before the trial Court, clearly reveal that source of money was stated by plain’ff Paramjit Kaur inas- much as she had received the ex gra(cid:17)a amount aDer the death of her husband. It was not disputed that the amount of the FDRs in ques’on had been deposited by plain’ff Paramjit Kaur. The defendants-appellants withheld the amount of the FDRs only on the ground that father of the plain’ff namely Satnam Singh was working as Class-IV employee and was involved in some embezzlement. No role whatsoever of the father of the plain’ff was made clear by the defendant- Bank as to how a Class-IV employee could have embezzled the amount and as to whether the amount of the FDRs had any connec’on with the amount allegedly embezzled from the Bank. 11. Learned first Appellate Court has also observed that land measur- ing 21 Kanal 12 Marla owned by Satnam Singh i.e. father of the plain’ff had al- ready been aEached by the respondent-Bank and the value of the said land was around ₹50-60 lakhs and in case, they wanted to make good any loss from Sat- nam Singh, the said land was sufficient for them. 12. Learned first Appellate Court has also rightly referred to the judg- ment of Hon’ble Supreme Court in “Anuma(cid:6) v. Punjab Na(cid:6)onal Bank” (supra), wherein it has been clearly held that fixed deposit in the joint name of two per- sons is nothing but a joint account, which as the name itself suggests, is re- payable on expira’on of the agreed period. Said fixed deposit receipt is merely a wriEen acknowledgment by the Bank that it holds a certain sum to the use of its customers. Bank is thus a debtor to the account holder in respect to the amount deposited as a debt, which is repayable by the Bank to the account holders with NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document Page 7 of 11 RSA-2357-2016 (O&M) interest on the expiry of the agreed period. An ‘either or survivor’ clause in such an account simply means that amount payable by the Bank on maturity of the Fixed Deposit may be paid to either of account holder by the bank in order to obtain a valid discharge. 13. In the present case, it is not the case of the defendants-appellants that plain’ff was in any way involved in the alleged embezzlement. As such, once the amount had been deposited by her in joint account of her and her fa- ther in the FDRs, the Bank could not have withheld the amount aDer the matu- rity of the FDRs. As such, the conten’on of learned counsel for the appellants that evidence on record has not been rightly appreciated by the first Appellate Court, is absolutely without any merit and so, the same is not sustainable. 14. Coming to the conten’on of learned counsel for the appellants that suit was barred in view of Sec’on 82 of Punjab Co-opera’ve and Socie’es Act, 1961, it will be useful to reproduce the said provision. It reads as under: “82. (1) Save as provided in this Act, no civil or revenue court shall have any ju- risdic’on in respect of- (a) the registra’on of a co-opera’ve society or its bye-laws or of an amendment of a bye-law; (b) the removal of a commiEee; (c) any dispute required under Sec’on 55 to be referred to the Registrar; and (d) any maEer concerning the winding up and the dissolu’on of a co-op- era’ve society. (2) While a co-opera’ve society is being wound up, no suit or other legal pro- ceedings rela’ng to the business of such society shall be proceeded with or in- s’tuted against, the liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose. (3) Save as provided in this Act, no order, decision or award made under this Act shall be ques’oned in any court on any ground whatsoever.” NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document Page 8 of 11 RSA-2357-2016 (O&M) 15. The present case does not pertain to a dispute rela’ng to registra- ’on of co-opera’ve socie’es or its bye-laws or removal of a CommiEee or any maEer concerning the winding up and dissolu’on of co-opera’ve society. How- ever, the defendants have tried to take help of Clause (c) of Sec’on 82(1), as per which any dispute required under Sec’on 55 to be referred to Arbitrator, cannot be tried by the Civil Court. 16. under: Sec’on 55 of the Punjab Co-opera’ve Socie’es Act, 1961 reads as “55. (1) Notwithstanding anything contained in any law for the ’me being in force, if any dispute touching the cons’tu’on, management or the business of a co-opera’ve society arises- (a) among members, past members and persons claiming through members, past members and deceased members; or (b) between a member, past member or person claiming through a member, past member or deceased member and the society, its commit-tee or any officer, agent or employee of the society or liquidator, past or present; or (c) between the society or its commiEee and any past commiEee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representa’ves of any deceased officer, deceased agent, or deceased employee of the society; or (d) between the society and any other co-opera’ve society, between a society and liquidator of another society or between the liquidator of one society and the liquidator of another society; such dispute shall be referred to the Registrar for decision and no court shall have jurisdic’on to entertain any suit or other proceeding in respect of such dispute. (2) For the purposes of sub-sec’on (1), the following shall be deemed to be disputes touching the cons’tu’on, management or the business of a co- opera’ve society, namely- (a) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal representa’ves of a deceased member, whether such debt or demand be admiEed or not; NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document Page 9 of 11 RSA-2357-2016 (O&M) (b) a claim by a surety against the principal debtor where the society has recovered from the sure-ty any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admiEed or not; (c) any dispute arising in connec’on with the elec’on of any officer of the society. (3) If any ques’on arises whether a dispute referred to the Registrar under this sec’on is or is not a dispute touching the cons’tu’on, management or the business of a co-opera’ve society, the decision thereon of the Registrar shall be final and shall not be called in ques’on in any court.” 17. As is evident on bare perusal of the aforesaid provision, it is the dispute touching the cons’tu’on, management or the business of a co-opera- ’ve society arising amongst members, past members, persons claiming to be members, past members, district members etc., which are liable to be referred to the Arbitrator for decision and no Court shall have jurisdic’on to entertain any such suit regarding any such dispute. Learned counsel for the appellants has failed to convince this Court as to how the dispute as involved in the present case i.e. the amount as deposited by a customer in the FDR and payable to such a customer on maturity, is covered under sec’on 55 of the Act. 18. It is also the conten’on of learned counsel for appellants that or- der to aEach the FDRs in ques’on was passed by the Assistant Registrar Co-op- era’ve Socie’es and any person aggrieved by the order has the remedy to file an appeal under Sec’on 68 of the Act and therefore, suit was not maintainable. 19. Although no such objec’on had been raised in the wriEen state- ment by the defendants-appellants but even if said conten’on is considered, it has absolutely no merit. Learned counsel for the appellants could not convince this Court that the Registrar has the power to aEach the amount of the FDRs pertaining to a customer as deposited by him. As such, plain’ff was not required to file any appeal before the Registrar for seNng aside the order, whereby the amount of the FDRs had been aEached by him. Page 10 of 11 NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document RSA-2357-2016 (O&M) 20. On account of the en’re discussion as above, this Court does not find any merit whatsoever in the present appeal. Learned first Appellate Court has rightly held that defendant-Bank had wrongly withheld the amount of the FDRs. The Appellate Court has rightly held that plain’ff is en’tled to the amount of the FDRs alongwith up to date interest and the appellants-defendants have been rightly directed to release the said amount. 21. This Court does not find any ground to interfere in the well-rea- soned judgment passed by the first Appellate Court, as there is neither any ille- gality nor any perversity in the findings as recorded by the Court. As such, hold- ing the present appeal to be devoid of any merit, same is hereby dismissed. Pending miscellaneous applica’on(s), if any, shall also stands dis- posed of. 24.03.2025 Nee(cid:17)ka Tuteja (DEEPAK GUPTA) JUDGE Whether speaking/reasoned? Whether reportable? Yes Yes NEETIKA TUTEJA 2025.03.24 18:10 I attest to the accuracy and integrity of this document Page 11 of 11