The Royal Bank of Scotland NV v. T.D. Naidu

NEGOTIABLE INSTRUMENTS ACT, 1881,

--Presumptions as to negotiable instruments --Consolidation of two fixed deposits into one fixed deposit Amount of fixed deposit repaid on maturity --Whether claim of respondent maintainable--Where two fixed deposits made by the respondent were consolidated into one fixed deposit and further no cash was deposited towards the additional fixed deposit as claimed by him, then, suit filed for refund of earlier two fixed deposits was not maintainable, as the same was repaid on maturity.--Respondent T made two fixed deposits for Rs. 20 lakhs and for Rs. 10 lakhs with the appellant-bank. T made further deposit of Rs. 30 lakhs by way of cash in the fixed deposit. T filed a suit seeking for refund of two fixed deposits with interest, as the same were not paid after the maturity period. The suit was decreed in favour of T. Therefore, Bank filed an appeal contending that the first two fixed deposits were closed and was consolidated into the single fixed deposit of Rs. 30 lakhs at the request of T and the same was repaid with interest on maturity. Further, T had never made any cash deposit and the additional fixed deposit claimed by him was unsustainable. Held: The certified statement of accounts showed that for the debit entry of Rs. 20 lakhs and Rs. 10 lakhs, there was a corresponding reversal credit entry made in the Books of Account, which showed that the first two fixed deposits were closed and was consolidated into the single fixed deposit of Rs. 30 lakhs. Further, the inspection and investigation conducted by RBI and police respectively proved that Bank had not received the additional sum of Rs. 30 lakhs as claimed by T. Further that, T had not produced his income tax returns for the relevant period. Therefore, an adverse inference was drawn against T for not producing the books of accounts or the income tax returns in order to prove that he paid Rs. 30 lakhs by way of cash towards the fixed deposit. Hence, the decree was set aside.