TMI Blog2016 (6) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiff due to the requisition of the Collector of Customs and also instructions received by it from the remitting bank. In the premises, the Defendant was not liable to act on the letter of 7 July 1998, unilaterally issued by the Plaintiff, and hold the amount in a fixed deposit. Any contract of Fixed Deposit with a bank is a bilateral matter involving both the bank and the constituent. There is no dispute between the parties that amounts lying in the current account or sundry creditors account do not bear any interest. No interest is payable on a current account or an account in the nature of a current account. - Decided against the plaintiff. - SUIT NO. 1942 OF 2007 - - - Dated:- 16-6-2016 - S.C.G UPTE, J. For the Appellant: Mr. Chandra Naik For the Respondent: Mr. A.B. Shinde Judgment : 1. The suit is filed for a money decree against a bank by a constituent of the Bank. The decretal amount consists of interest, claimed as having accrued to the Plaintiff, on a certain sum retained by the Defendant bank by freezing the Plaintiff's account on instructions of the customs department of Government of India. The Plaintiff claims to have issued a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenge the purported inquiry of the Customs Department including freezing instructions issued by the latter before this Court in a writ petition. The Defendant was a party to this petition along with the Customs Department. By its order dated 9 June 2004, a Division Bench of this Court allowed the writ petition inter alia by ordering defreezing of the Plaintiff's current account and release of the remittance withheld by the Defendant in the account. On 2 November 2004, the Defendant released the amount without any interest and after deducting charges of ₹ 15,997/. The Plaintiff claims interest during the period 7 July 1998 to 2 November 2004 at the rate of 18% p.a. 3 The Defendant contests the suit. In its written statement, the Defendant submits that based on the directions of the Commissioner of Customs, the Defendant did not release the amount received into the Plaintiff's current account, but retained the same in the Sundry Creditors Account so as to avoid any irregularities in the said current account; that no interest is payable on any amount lying in the current account or the Sundry Creditors Account; that the amount withheld by the Defendant could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e branch at which he keeps his account and the bank can rightly refuse to cash a cheque or honour his mandate at any other branch. Based on these propositions and the judgment of the Supreme Court in the case of Indian Performing Rights Society (supra), it is submitted by learned Counsel for the Defendant that the suit must be filed at a place where the defendant has branch office and where the cause of action arises. It is, however, important to mention that the Supreme Court was considering Section 20 of CPC in Indian Performing Rights Society's case. On a consideration of Section 20, the Court came to a conclusion that when the defendant corporation has a subordinate office at a place where the cause of action has arisen, it is the Court of that place alone which has jurisdiction to entertain a suit and not of the place where the defendant has the principal office. Altogether different considerations apply when a plaintiff invokes the jurisdiction of this Court under Clause 12 of Letters Patent. As held by the Supreme Court in the case of Jindal Vijayanagar Steel Vs. Jindal Praxair Oxygen Company Ltd. [2006] Insc 547 (29 August 2006) , the principle of Section 20 can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that such instructions or mandate was issued by the Plaintiff to the Defendant, was the Plaintiff bound to accept such mandate and transfer the amount lying in the current account or held in the sundry creditors account to a fixed deposit. Learned Counsel for the Plaintiff relies on the Code of Bank s Commitment issued by the Reserve Bank of India, which sets standards of banking practices for banks to follow when they deal with individual customers. According to this Code, the Bank is bound to honor direct debit or standing instructions, if the same was issued at the time of opening of the account. The Bank is also liable to act upon the mandates given by a customer for direct debits (say Electronic Clearing Service (ECS) and other standing instructions. The Plaintiff also relies upon the Code of Bank s Commitment to Customers, issued by Banking Codes And Standards Board of India in this behalf. 10 The receipt of the letter dated 7 July 1998 was contested by the Defendant in its written statement. It is submitted that the onus was on the Plaintiff to prove its receipt by the Defendant; that though this document was admitted in evidence and marked, its receipt by the Defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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