BANK OF BARODA Vs. SBI ORS

JUDGEMENT

(1.) AS in both the petitions, as common questions arise for consideration, they are being considered simultaneously.

(2.) IN both the petitions, common facts are that the cheques which were earlier not honoured on account of nonavailability of the funds, were not cleared at the clearing house. However, on 26.12.1998, again those cheques were presented by the respondent no.2 Bank and the respondent no.2 Bank took undue credit in its account and ultimately, they were not cleared. As a result thereof, at the clearing house, those amount of respective cheques were to be debited in the account of respondent no.2 which was a member of clearing house. In stead of that, the amounts were debited by creating overdraft of respondent no.2 in the account of the concerned petitioner Bank. Such action was taken by the respondent State Bank of India(SBI) (former State Bank of Saurashtra) which was managing the clearing house amongst all nationalised banks and the cooperative banks at Veraval town. Since the amount in question which were otherwise to be debited in the account of respondent no.2 Bank, were debited in the account of the petitioner Banks, both the petitioner Banks have approached to this Court by preferring the present petitions.

(3.) THE prayers in SCA No.5304/99 is that the action of creating an overdraft to the extent of Rs.24,51,000/in the account of the petitioner with the interest levied thereon be quashed and set aside and it is prayed that the respondent SBI be directed to reverse the impugned entries by giving credit of the said amount.