OAKLEY BOWDEN AND CO Vs. INDIAN BANK LTD

JUDGEMENT

(1.) BOTH the courts below have concurred in passing a decree against the defendants for recovery from them of a sum of Rs. 2463-14-2 on the basis that the first respondent, Indian Bank, which was the plaintiff, had by mistake given credit to the first defendant in is current account at Madras by two double entries, the Courts below were of the view that the first defendant, a public company, had the means of knowledge and, therefore, every opportunity to know the real position so that the principle of estoppel could not be applied against the plaintiff bank. Defendants 2 and 3 did not appeal against the decree of the trial Court throughout, but the public company, which is the first defendant, has.

(2.) THE first defendant was a customer of and had * current account with the indian Bank, the plaintiff, at his head office at Madras. The first defendant had also dealings with defendants 2 and 3 at Guntur and the arrangement between them was that they should remit in the Guntur branch of the Indian Bank monies payable to the first defendant and that branch should advise the credits in favour of the first defendant to the head office of the Indian Bank. On 15-12-1952 there was a remittance in the Guntur branch of the Indian Bank of Rs. 2108-14-9 to the credit of the first defendant. There was similarly another remittance in favour of the first defendant in the Guntur branch of the Indian Bank on 7-7-1952 of a sum of Rs. 500. These credits would appear to have been advised by the Guntur branch to the head office by telegrams. On receipt of the telegrams, the head office of the indian Bank made corresponding credit entries in favour of the first defendant. In due course the head office of the Indian Bank also received advise from the guntur branch of similar amounts of credit in favour of the first attendant. These intimations were in the normal course, it was apparently not realised by the head office of the Indian Sank that the advises of credits received in the normal course of correspondence related to the identical credits covered by the two telegrams. The Indian Bank intimates the first defendant of four credit entries instead of two which mistake, according to the Indian Bank, it discovered only in 1954. In the meantime, the first defendant, that was its case, acting upon credit entries, settled its accounts with defendants 2 and 3 and closed its transactions with them on the basis of the four credit entries, in defence to the suit by the Indian Bank to recover the amount referable to the duplicate entries, the first defendant pleaded that the bank was estopped from contending that two of the four entries were duplicate entries since on the faith of the four entries communicated by the bank to the first defendant, the latter had acted upon the same and settled its accounts with defendants 2 and 3. This plea did not find acceptance with the Courts below. As I said, they considered that the first defendant had the means of knowledge and the opportunity to know the duplicate entries and that therefore it could not invoke the principle of estoppel against the plaintiff.

(3.) THE Courts below have not found that the first defendant as a matter of fact, knew about the double credit entries in its favour. But the discussion in the judgments of the Courts below tended to show that they were prepared to proceed on the footing that the first defendant had actually no knowledge of the mistake committed by the Indian Bank when it acted upon the duplicate credit entries. But the courts below, however, felt mat as the first defendant failed to produce Before them the weekly statements from its clients defendants 2 and 3 at guntur and also the correspondence between them, it could be fairly taken that they should have furnished the materials which would have given the means to the first defendant of knowing about the real character of the double entries. The lower appellate court particularly pointed out that the first defendant had accounts, that defendants 2 and 3 were business people having accounts and that in the normal course of things it was possible for the first defendant to verify the accounts of defendants 2 and 3 and come to know about the double entries, on that basis, the lower appellate court, like the trial court, declined to apply the doctrine of estoppel against the plaintiff and held the defendants liable. I also mention that the trial court, here again in the lower appellate court concurred with it, directed that in the first instance the plaintiff should execute the decree against the first defendant and if only the plaintiff failed to realise the amount decreed from the first defendant should it execute the decree against defendants 2 and 3.