AXIS BANK Vs. PUNJAB NATIONAL BANK AND ORS.

JUDGEMENT

(1.) Two banks are embroiled in this litigation, each accusing the other of negligence in facilitating fraudulent encashment of two forged demand drafts by an imposter resulting in wrongful loss to one (the drawer as well as drawee), part of resultant liability having been fastened on the other (the collecting bank).

(2.) The Original Application (OA) No. 108/2004 under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the RDDBFI Act") had been instituted before the Debts Recovery Tribunal (hereinafter referred to as "the DRT") on 22.11.2004 by Punjab National Bank (the first respondent) impleading the Axis Bank (the petitioner) and one Mr. Dinesh Arora (the second respondent) as the defendants No. 1 and 2 for recovery of a sum of Rs. 13,10,044/- along with pendente lite and future interest @ 14.75% per annum. The OA was allowed by the DRT by final order passed on 30.01.2013 in favour of the applicant Punjab National Bank (PNB) though apportioning the liability against the petitioner bank (Axis Bank) only to the extent of one-third of the amount in dispute, issuing recovery certificate, insofar as Axis Bank is concerned in the sum of Rs. 8,50,100/- only, holding the other respondent liable for recovery of a sum of Rs. 8,50,100/- with simple interest @12%, incidental expenses and other charges from the date of filing of the OA till realization. The said order and recovery certificate issued in its wake by DRT, were challenged by the Axis Bank before Debts Recovery Appellate Tribunal (hereinafter referred to as "the DRAT") through appeal No. 1252/2013 which, however, was dismissed by order dated 02.07.2014 which is under challenge through the writ petition at hand.

(3.) The background facts of the controversy are not very complicated. The second respondent had approached Axis Bank to open an account in its branch situate at Plot No. 5 and 6, Block - D, Local Shopping Complex, Pitampura, Delhi in the year 2001, submitting with the bank account opening form copies of election identity card and PAN card, pursuant to which savings bank account No. 040010100069720 was opened on 27.10.2001. On 30.10.2001, the said branch of the Axis Bank sent a communication styled as "letter of thanks" addressed to the second respondent, explained as a precaution "to check the authenticity of the address furnished". On 03.11.2001, a cheque book was collected by the second respondent from the said branch. It is stated by Axis Bank that the cheque book was issued, as a matter of abundant caution, only upon the production of the original letter of thanks issued on 30.10.2001.