S KOTRABASAPPA Vs. INDIAN BANK DAVANAGARA

JUDGEMENT

(1.) The important question that arises for consideration in this appeal is whether the recipient of a certain sum of money by mistake is required to return the same with interest or not ?

(2.) The circumstances leading to this litigation are as follows : The plaintiff instituted O.S. No. 34 of 1983 on the file of the Civil Judge, Davanagere, for recovery of a sum of Rs. 1,00,000/- plus Rs. 33,438-75 p. as interest etc., alleging that the defendant was its constituent from 23-5-1980 to 5-7-1985 maintaining accounts in the name of Sri Kottureshwara Rice Mill and Oil Mills; that during that period, i.e., on 14-6-1980 plaintiff-Bank had received T.T. (Telegraphic Transfer) advice from their R.S.. Puram, Coimbatore Branch to credit to the account of the defendant a sum of Rs. 1,00,000/- ; accordingly, this amount wascredited and drawn by the defendant on the same day ; that on receipt of confirmation telegram, dated 21-6-1980, by mistake or oversight a further sum of Rs. 1,00,000/- was credited to the account of the defendant bona fide believing that there was another T. T. Advice to credit the said sum, though, in fact, there was none. The official dealing with this particular work, thinking that the confirmation telegram itself was a separate T. T. advice, had credited another sum of Rs. 1,00,000/-. The defendant took unfair advantage of this mistaken credit transfer and had drawn the said amount of Rs. 1,00,000/- on the same day, though he had no information from his constituent to credit a further sum of Rs. 1,00,000/- from R.S. Puram, Coimbatore Branch. Thereby the defendant made an unlawful gain of one lakh of rupees. There were some more transactions till the closure of the account, but the defendant had kept silent about the wrong credit and withdrawal of the same on 21-6-1980. After nearly two years, the plaintiff found out that there was a wrong credit on 21-6-1980 and immediately the plaintiff approached the defendant on 13-7-1982 and explained the circumstances under which the payment was made without receipt of T.T. on 21-6-1980. Despite a good deal of correspondence between the parties and furnishing of extract of accounts since its inception, upto the closure, defendant had failed to repay the same. Thus, the cause of action to claim the refund was based on mistaken credit of Rs. 1,00,000/- with interest at 12% per annum from the date of credit till the date of filing of the suit in addition to the current interest.

(3.) The defendant denied these averments and contended that the accounts had been settled and there remained nothing to be paid and that the claim based on an isolated entry was not maintainable. He also repudiated the mistaken credit and disputed his liability to pay interest, if any.