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The State of Rajasthan Vs. the Bank of Rajasthan Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtRajasthan High Court
Decided On
Case NumberS.R. Civil First Appeal No. 140 of 1973
Judge
Reported in1975WLN(UC)169
AppellantThe State of Rajasthan
RespondentThe Bank of Rajasthan Ltd. and anr.
DispositionAppeal dismissed
Excerpt:
.....of rajasthan as well as firm nand ram shanker lal, were impleaded as defendants no. it is urged by the learned counsel for the respondents that when the state has failed to establish that anything was due to be paid to the state government by late manna lal, the state government was not in a position to demand anything from the bank, which stood surety to the tune of rs......bank. the defendant firm demanded a refund of this amount from the bank and it appears that the bank refunded rs. 5,200/- (rs. 200/- as interest) on december 22, 1958.3. the state government, it is said, demanded an amount of rs. 13,028/6/6 from the defendant-firm and it was in that connection enquiries were ma ii by the state government vide its letter no. 7273 dated 1-4-67 about the security money deposited with the jhalawar state bank. a reminder dated 21-7-67 was also sent by the state about the said deposit and it was discovered that the bank of rajasthan, jhalawar branch refunded that amount with interest (rs. 200) to he defendant firm. on this enquiry the defendant bank vide its letter no. 19/r/1589/67 dated 3-8-67 also informed the state government that the deposit of rs......
Judgment:

V.P. Tyagi, J.

1. This is a State appeal against the judgment and decree of the Additional District Judge, Jhalawar, dated March 20, 1973. whereby a suit filed by the State for the realisation of Rs. 5,200/- from the Bank of Rajasthan Ltd. Jhalawar. against firm Nand Ram Shankar Lal of Jhalawar, was dismissed by the trial court.

2 Facts giving rise to this litigation are in nutshell, as follows: Defendant No. 2 firm Nand Ram Shanker Lal was appointed in the year 1950-51 as a importer for cloth by the Civil Supplies Department of the State of Rajasthan for importing cloth to be sold in the District of Jhalawar. It is alleged that the firm was required to furnish a security for Rs. 5 000/-. According to the plaintiff's case the defendant firm M/S Nand Ram Shinker Lal deposited an amount of Rs. 5,000/- in the Jhalawar State Bank and the said Bank stood as a surety to guarantee to payment to tae State to the extent of Rs. 5,000/- vide letter of the Bank dated 26 5 50. The Jhalawar State Bank then became defunct and its assets including the deposit of Rs. 5,000/- from the firm were taken over by the defendant No. 1 the Bank of Rajasthan, Jhalawar Branch. From the averments made in the pleadings of the parties it appear that till 1958 this amount remained deposited with the defendant Bank. The defendant firm demanded a refund of this amount from the Bank and it appears that the Bank refunded Rs. 5,200/- (Rs. 200/- as interest) on December 22, 1958.

3. The State Government, it is said, demanded an amount of Rs. 13,028/6/6 from the defendant-firm and it was in that connection enquiries were ma ii by the State Government vide its letter No. 7273 dated 1-4-67 about the security money deposited with the Jhalawar State Bank. A reminder dated 21-7-67 was also sent by the State about the said deposit and it was discovered that the Bank of Rajasthan, Jhalawar Branch refunded that amount with interest (Rs. 200) to he defendant firm. On this enquiry the defendant Bank vide its letter No. 19/R/1589/67 dated 3-8-67 also informed the State Government that the deposit of Rs. 5,000/- was refunded to the depositor, but the release order was not traceable in tine Bank The State demanded from the defendant Bank the payment of Rs. 5,200/-, as it was the money deposited with the Bank as security money for the due discharge of the function of the import agent for Jhalawar District. By its letter dated 13-11-67 the Bank refused to make payment to the plaintiff State. It was in these circumstances that a suit was filed by the State Government for the realisation of Rs. 5,200/- and in that suit both the Bank of Rajasthan as well as firm Nand Ram Shanker Lal, were impleaded as defendants No. 1 and 2.

4. Both the defendants denied their liabilities to pay Rs. 5,200/- to the State Government. Defendant No. 2, however, pleaded that no amount is due to the State Government and it was not entitled to demand the refund of the security money to it.

5. On the basis of the pleadings as many as 10 issues were framed by the trial court. The legal issues were, however, not pressed by the parties. The main question that cropped up from the pleadings of the parties for the decision of the trial court, was whether the State Government was entitled to make a demand for the refund of the security money from the defendant Bank after such a long time, specially when there was no privity of the contract between the plaintiff and the d fendant No. 1, The learned Judge decided all the the issues concerning with this question in favour of the defendants and against the plaintiff. Aggrieved by that judgment, the State has come to the Court in appeal.

6. The main question that arises for the determination of the issues framed by the trial court is whether in the year 1967, when the State Government raised a demand for the refund of Rs. 5,200/- from the defendant Bank, the defendant firm as indebted to the State to the extent to which the demand was raised by the State Government. In this connection documents A/2 and Ex. A/3 have been placed on the record by the defendant No. 2 to show that all the account between the State Government and the defendant firm had been settled and, therefore, at the time when the suit was filed, nothing was due from toe defendant firm to the State and as such the State was not entitled to file the suit for the refund of Rs. 5,200/-, which had already been paid by the Bank to defendant No. 2.

7. Ex. A/2 is a bond executed on 24th of April, 1971. by the defendant firm in favour of the Collector, Jhalawar, who represented the State Government stating that Rs. 83,700/- remained to be realised from Mohanlal, the legal representative of Mannalal, the proprietor of the defendant firm and that ha made a promise in the slid bond to pay this amount within six months. Ex. A/3 is a certificate issued by the Collector (Recovery), Jhalawar, on 1-11-71 to Shri Mohanlal son of late Shri Manna Lal certifying that the entire amount of the bond has been realised and nothing remained to be realised from Mohanlal against the debt of his late father Mannalal. It is urged by the learned Counsel for the respondents that when the State has failed to establish that anything was due to be paid to the State Government by late Manna Lal, the State Government was not in a position to demand anything from the Bank, which stood surety to the tune of Rs. 5000/-. This argument his a considerable weight and before the State could ask for the deposit made by late Mannalal with the Bank, it was incumbent on the State Government to have proved before the Court that the amount of Rs. 5200/- was due from the defendant firm towards the said account and it is only then that a prayer for the refund of 5,000/ could be made to the defendant-Bank.

8. It may also be mentioned that there is nothing on the record to show the terms of furnishing security by the Jhalawar State Bank, which liability ultimately devolved on the Bank of Rajasthan, Jhalawar Branch, by virtue of the transfer of Rs. 5,000/ after the Jhalawar State Bank was merged into that of the Bank of Rijasthan, Jhalawar Branch In the absence of any specific term of contract between the State Government and the so called surety, namely, the Jhalawar State Bank, it was not possible for the Court to determine the liability of the defendant Bank In these circumstances I feel the Court bas rightly rejected the claim of the State.

9. The result is that the appeal fails and it is hereby dismissed with costs.


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