CANARA BANK vs M/S RAJESH EXPORTS LTD on 8 February 2024

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The petitioners in the IA namely defendants 1 to 3 have moved the present IA with a prayer to appoint “an expert accounting court commissioner”. In the supporting affidavit, the defendant no-2 submits about the directions passed by the Hon’ble High Court of Karnataka and that the applicant-bank has filed an application after 3 years seeking amendment to the OA and delaying the matter.

It is also averred that there is no banker – borrower relationship between the parties and is only an accounting dispute which is not resolved by the bank.

It is also the case of the defendants that there are two account statements. One is filed by the bank and there is another account statement maintained by the defendants “to evaluate the two accounting statements and to decide upon various incorrect accounting entries an accounting expert would be required to be appointed by this Tribunal”. It is further averred that only an expert commissioner can look into the disputed transaction and therefore the present application is filed in bonafides. If the application is not allowed, the defendants plead that there will be further delay in adjudication.

The reply is filed by the contesting bank. In the counter it is submitted that the defendants cannot seek the appointment of Court commissioner to assail the statement of accounts. The defendants have to independently demonstrate the incorrect entries if any. The allegation that the bank is delaying the disposal of the TA is denied. It is also pointed out that the defendants are pleading hot and cold. At one end having denied the banker- borrower relationship, and on the other hand they admit having executed the loan /security documents and specifically an undertaking given by them that in the event of shortfall permitting the bank to liquidate the deposits lying with Tamilnad Mercantile Bank.

It is also contended by the bank that the statement of accounts cannot be questioned by the present defendants unless and until prima facie inflated or exaggerated. If the defendants have tenable evidence to demonstrate that OA claim is exaggerated, they have to prove through documents and counter proof affidavit. Furthermore, they having filed counter claim, they are obligated to prove their case and cannot depend on the court commissioner. These defendants are aware that they failed to adhere to the terms of the sanction memorandum dt 17.6.2019 despite the request from the bank to provide rates of payments of bills under FLC in advance, these defendants failed to provide the same on the due dates and did not hedge the FLC exposure on a case to case basis as agreed. Therefore the bank prays for dismissal of the present application as meritless.

Heard the ld Counsel Sh.Achin Mittal appearing through VC and Ms.Meghana Nair for the petitioner-defendants. On behalf of the opponent-bank ld Counsel Sh.M.L.Ganesh is heard.

While insisting the appointment of the court commissioner, an accounting expert, the ld Counsel for the defendants invited the attention of this Tribunal to the statement of accounts duly certified under the Bankers Book Evidence Act filed by the bank in support of their TA. He disputes the entry in Page 939 of Volume 3 of the OA no-510/21 (now TA no-28/2023). This entry pertains to date1.4.2020 showing the description b/f withdrawal of Rs.3,831,682,597.36 and the balance as Rs..3,831,682,597.36. This very entry is in dispute, which is the very first entry in the statement of accounts at Pg No-

939. The ld Counsel submits that if this entry is reconciled, it would clinch the issue for which the appointment of court commissioner is sought. He submits that the matter is being delayed by the bank.

On the other hand the ld Counsel for the bank demonstrates that the very defendants had filed one Suit before the Ld XIII Additional City Civil Judge, Bangalore in O.S No.25035/2021 which by an order dt 11.10.2022 rejected the suit filed by the defendant no-1. The ld Counsel appearing for the bank invites the attention to the Para 9 of that order wherein it was observed by the Ld City Civil Judge to the effect that “however nowhere in the plaint it is stated which are the wrong entries made and what is the total quantum of wrong debits made to the plaintiffs account and the total quantum of credits which are wrongfully denied to the plaintiff”. It is argued that the observation of the Ld Judge that “there is absolutely no pleading which are the wrongful entries made” – makes it clear that the present petitioners in IA are only clapping in the wind single handed. There is no tenable evidence with the defendants to deny or dispute the statement of accounts. The present IA is filed only to borrow the time and no court commissioner can be appointed to dispute the entries.

After hearing the ld Counsel on either side and after perusal of the pleadings, the point arises for determination in this IA is “whether the defendants have made out a case for appointment of the Commissioner as requested in the IA?

No doubt that Section 19(25) confers the powers of the Tribunal to pass such orders or issue directions which are necessary and expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of Justice. In the instant case the OA is filed for recovery of a sum of Rs.451,68,45,515.39p along with interest. The OA is filed in 5 volumes with 1464 pages of documents.

Upon alleging the grounds of wrong entries the written statement is filed seeking counter claim of Rs.20456,36,24,459/- is sought by the defendants. In the counter claim the very first head of calculations begins with incorrect entries made by the bank until 6.8.2020 at Rs.381,18,81,446/-. There are various counts running under 22 heads totaling the counter claim.

The grounds urged in the instant petition seeking appointment of Court Commissioner is argued on the premise that the entry found in page no-939 at Rs.3,831,682,597.36 of the OA is incorrect. The same is sought to be examined by the accounting expert to be appointed. The said ground argued is not pleaded. The finding of the Ld City Civil and sessions Judge in OS No-.25035/2021 has become final as submitted by the ld Counsel for the bank. On the other hand it is argued by the defendants that a Regular First Appeal is filed. Be that as it may, the IA filed does not disclose which of the entries of the particular dates are disputed. It is always open for the defendants to repudiate the claims of the bank by adducing the tenable and cogent evidence and demolish the sustainability of such entries in the statement of accounts filed by the bank. It is to be noted that a legal presumption arises in favour of the bank in view of the provisions of the Bankers Book Evidence Act 1891. The statement of accounts relied by the bank is certified under the relevant provisions of the act. Considering the presumption value to the statement of accounts under the Act, the appointment of Court commissioner does not arise.

Furthermore it is common prudence that the court commissioners cannot be appointed to gather the evidence or to demolish the evidence. Each of the contesting parties have to prove their case on merits by adducing such evidence independently to establish their case.

When the statement of accounts is produced by the bank to establish their case, the same cannot be allowed to be expunged, altered, demolished by the expert opinion. In fact if the entries were to be disputed with regard to the brought forward balance, the defendants can seek the details of such brought forward entries and can establish that such entries showing as balance were cleared by such of the bills satisfied by their independent documentary evidence. In the present case the proof affidavit is already marked. At the cost of repetition the court commissioner cannot be appointed to gather new evidence by way of the opinion of an expert of accounts, keeping in mind that the defendants having filed a staggering counter claim of Rs.204,56,36,24,459/-, which facts are to be established by them.

The applicant had relied on documentary evidence running into 5 volumes exhibiting 239 documents. With these voluminous documents consisting of various FLCs and the running account of the bank with defendants from the year 1995 onwards spanning for a period of nearly 3 decades as pleaded in the OA, it is always open to the defendants to demonstrate having cleared the FLCs with the corresponding documents they maintained in their usual course of the business.

Suffice it to say that appointment of an accounting expert as Court Commissioner is not warranted for effectively implementing the orders of the Tribunal or to prevent the abuse of process of law nor the demanding the circumstances call for such appointment to secure the ends of justice. The Tribunal opinion in this regard is based on the pleadings at Para 5.25 C of the OA which clearly juxtaposes the details of debit and credit explained in pages 48 and 49 of the OA supported by the documentary evidence with a concussive pleading that a sum of Rs.451,68,45,515.39p as due as on 21.5.2021 to the bank under the explanations given in the table at Page No-48 and 49 of the OA which are to be tested with the evidence at the time of adjudication. In the event of proposed and relied statement of accounts remaining a puzzle/riddle, the same would be explained by the Ld. Counsel appearing on either side during arguments, still if they remain ununderstandable by the Tribunal, such request at that particular stage may arise, but not at this stage. For the aforesaid reasons, this Tribunal is of the opinion that the defendants have not made out a case for appointing the expert in accounting as a Court Commissioner. Consequently the following order:

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IA-20/2024 filed by the defendants 1 to 3 stands dismissed. There shall be no order as to costs. Sd/- (A.S.JAYACHANDRA)

PRESIDING OFFICER

DRT-I, CHENNAI

(Dictated to Assistant who typed in the system, corrected, signed and pronounced in open court on this 8th Day of February, 2024)