- (1.) The petitioners by invoking the jurisdiction under Article 227 of the Constitution assails the action of the Principal District Judge, Guntur in entertaining the suit - OS No.89 of 2002 filed by the 1st respondent-Bank against the petitioners and others for declaration of Award dated 23-5-1998 passed by the Banking Ombudsman in complaint No.233/97-98 as arbitrary, illegal and contrary to the provisions of Section 131 of Negotiable Instruments Act and for setting aside the same, and for a consequential direction to'the defendants 1,2 and 6 to pay a sum of Rs.24,37,154/- to the plaintiff with interest.
(2.) The facts in brief are as under: 2003(5) ALD Sept. 1th
(3.) The 1st petitioner was awarded sub-contract by M/s. Hyderabad Agricultural Co-operative Association, Hyderabad (HACA) for supply of building material for Social Welfare Hostels. The HACA issued a demand draft bearing No.707841, dated 17-12-1996 for a sum of Rs. 13,07,135/-drawn on State Bank of India, in favour of 1st petitioner for due execution of contract Guntur. When the said Bank Draft along with some other blank cheques were missing, the 1st petitioner made a complaint to the police and also intimated the loss of draft and cheques to the State Bank of India, Guntur Branch. A Current account was opened in the name of the 1st petitioner represented by 2nd petitioner in the 1st respondent-Bank and deposited the demand draft dated 17-12-1996 to the credit of the said Account and encashed the same. The 1st petitioner on coming to know of the opening of the current account by fictitious persons and withdrawing the demand draft lodged a complaint to the Superintendent of Police, Guntur. On such complaint the police registered a Crime No.43/97 for the offences punishable under Sections 419, 420, 468 and 471 IPC and ordered for investigation. The 1st petitioner also filed a complaint to the Banking Ombudsman, Hyderabad in Complaint No.233/97-98, which was contested by the 1st respondent-Bank. The Banking Ombudsman after making an enquiry into the complaint passed an Award on 23-3-1998 directing the 1st respondent-Bank to pay a sum of Rs.13,07,135/- and interest thereon from 18-12-1996 till date of payment at the rate applicable to fixed deposits for the said period. The 1st petitioner was directed to furnish one surety whose worth is twice the amount of the draft and also to pay a sum of Rs.6,000/- towards expenses. Feeling aggrieved by the direction issued by the Banking Ombudsman, asking the 1st petitioner to furnish third party security, it filed WP No.31052 of 1998. The said writ petition was disposed of with a direction to the 1st respondent to comply with the Award of Banking Ombudsman within a period of four weeks, pending the directions that may be issued by the Reserve Bank of India in pursuance of representation made by the 1st respondent-bank on 8-6-1998. The appeal filed by the 1st respondent-Bank was dismissed holding that the interest of the bank is sufficiently safeguarded. On dismissal of the writ appeal the 1st respondent-Bank instituted the above suit. The Court below returned the same with some office objections. On complying the said objections, ultimately the suit was taken on file. Hence, the petitioners moved this Court by way of present revision contending that such a suit filed by the 1st respondent bank is not maintainable and having regard to the plaint averments the suit is not cognizable under Section 9 CPC. There is no cause of action for institution of the suit. The suit filed by the 1st respondent-Bank is hopelessly barred by limitation. In view of the fact that there being no cause of action for institution of suit and the same is barred by limitation, the learned District Judge should have rejected the suit upholding objections instead of ordering its registration and taking it on file. The basis of the letter dated 8-6-1998 said to have been written by the 1st respondent-bank to the Reserve Bank of India will not extend the period of limitation and the suit filed by the 1st respondent-Bank basing upon the permission granted by the Reserve Bank of India on 15-6-2002 cannot be entertained, as the permission did not refer the letter dated 8-6-1998. More so, in view of the orders passed by the High Court in WP No.31052 of 1998 and WA No. 1278 of 2000 the suit as such filed by the 1st respondent is not maintainable, as the same was filed beyond the period of limitation. Mere filing of application-I.A. No.2469 of 2002 by the petitioners for rejection of the plaint under Order VII Rule 11 CPC, as the learned District Judge has no jurisdiction to take the suit on file, will not be a bar for invoking the supervisory jurisdiction of this Court under Article 227 of the Constitution.;