SHANKARLAL Vs. STATE BANK OF INDIA
LAWS(CAL)-1984-11-14
HIGH COURT OF CALCUTTA
Decided on November 19,1984

SHANKARLAL Appellant
VERSUS
STATE BANK OF INDIA Respondents





Cited Judgements :-

K J DORAISAMY VS. ASSISTANT GENERAL MANAGER STATE BANK OF INDIA [LAWS(MAD)-2006-11-30] [REFERRED TO]
KATTABOMMAN TRANSPORT CORPN LTD VS. STATE BANK OF TRAVANCORE [LAWS(KER)-1992-4-6] [RELIED ON]
UJJAL KUMAR DAS VS. STATE BANK OF INDIA [LAWS(CAL)-2013-5-6] [REFERRED TO]
VENKATAPATHY REDDIAR VS. AUTHORISED OFFICER, AXIS BANK OF INDIA [LAWS(MAD)-2017-8-163] [REFERRED TO]
M ARUVI VS. RESERVE BANK OF INDIA [LAWS(MAD)-2018-4-340] [REFERRED TO]
M/S. MOHAN BREWERIES AND DISTILLERIES LIMITED VS. AUTHORIZED OFFICER [LAWS(MAD)-2018-4-1670] [REFERRED TO]


JUDGEMENT

- (1.)The petitioner owned and possessed 261 bank currency notes of Rs. 1000/- each. On Jan. 16, 1978, an ordinance was promulgated at the High Denomination Bank Notes (Demonetisation) Ordinance, 1978 which was published in the Gazette on Jan. 16, 1978 and became an Act in 1978. The said Act came into force on 16th Jan. 1978. On the expiry of 16th Jan. 1978 all high denomination bank noted ceased to be legal tenders. High denomination bank notes meant bank notes of the denominational value of thousand rupees, five thousand rupees or ten thousand rupees issued by the Reserve Bank of India. Under the said Ordinance no person was allowed after 16th Jan. 1978 to transfer to the possession of another person or receive into his possession from another person any high denomination bank note. It was further provided that such notes could be exchanged after 16th Jan., 1978 only by way of tender of the said notes. Every person desiring to tender for exchange a high denomination bank note should prepare in the form set out in the schedule, three copies of declarations signed by him giving full particulars in that form and hand over the same not later than 19th Jan., 1978 together with the high denomination bank notes either to the office of the Reserve Bank Head Office at Bombay or its sub-offices or to the main office or branch of the State Bank or to any other public sector bank notified by the Reserve Bank. Unless it appeared that the declaration has not been complete in all material particulars, the Reserve Bank, State Bank or any bank notified, as the case may be to which an application for exchange of high denomination bank note has been made shall pay the exchange value of the said notes either by crediting the account of the owner or if the owner did not have the bank account by tendering exchange value on proper identification. But where it appeared that the declaration had not been completed in all material particulars, the bank concerned would refuse to accept and pay for the bank notes and shall return one copy of declaration to the declarant after entering the date on which it was presented and shall refer the matter to the Bank concerned forwarding therewith a copy of the declaration with a brief statement of the reasons for refusing to pay for the bank notes. Thereupon the Bank concerned may require any declarant to amplify his declaration with proper particulars and unless the declarant was able to fully complete with such requirement, refuse, for reasons to be recorded in writing to sanction the exchange.
(2.)The Reserve Bank of India issued a notification naming 71 offices of Public Sector Bank where such exchange could be made. The Netaji Subhas Road branch of the State Bank of India was so notified. On 19th Jan., 1978 the petitioner tendered 261 thousand rupees bank currency notes to the State Bank of India, Netaji Subhas Road Branch together with three copies of declaration signed by him duly prepared in the form set out in the schedule to the said Act giving full particulars required by that form. The respondent State Bank of India duly accepted the said notices and also the declaration form whereupon the petitioner instructed the respondent 1 to make the payment of the value of the bank notes to the credit of his current account No. 1824 with the Punjab National Bank, Brabourne Road Branch. It was the petitioner's case that it was the statutory duty of the respondent to credit the total value of the said currency notes for Rs. 2,61,000/- being the exchange value of the high denomination notes. The petitioner repeatedly called upon the respondent bank to deposit the exchange value in respect of the receipt granted by the respondent bank on 19th Jan., 1978. The refusal by the respondent 2 to tender the exchange value was unlawful in clear breach of the respondent's statutory duty as conferred under S.7 Sub-Sec. (4) of the said Ordinance. The petitioner also alleged mala fides on the part of the respondent 1. Inasmuch as instead of tendering the exchange value, the respondent 1 made declarations made by the petitioner available to the I.T. authorities which entailed harassment by the I.T. Department inasmuch as the petitioner's residence as also the office had been raided, searches were made, books and other documents of his business had been seized and initialled, the petitioner had to give an explanation as to how he came to own and possess the said high denomination notes. He was summoned under S.31 of the Income-tax Act and his statements were recorded. Not only that but his son was also not spared of raids, summonses etc. The petitioner contended that the respondent bank had no. authority to inform the Income-tax department and supply with such particulars. The petitioner had paid his income-tax dues for years together and the books of account of his business showed a cash balance in excess of Rs. 2,61,000/-. His books had all along been produced before the I.T. Authorities, assessments had been made and accepted by the department for such assessment. No income-tax was due and payable by the petitioner to the department, on the contrary a sum of Rs. 3,245/- became refundable to the petitioner by the I.T. Department. Hence neither there was any income-tax proceeding pending against the petitioner, nor there could be any. There was no case of any penalty proceedings nor any arrears of tax were due from the petitioner.
(3.)The respondent 2, the I.T. Authorities had issued two notices under S.226(3) dt. 15th Feb., 1978 and under S.281(b) dt. 20th Feb., 1978 of the Income-tax Act attaching the said sum of Rs. 2,61,000/- lying deposited with the State Bank of India. By subsequent two several notices both dt. 18th Oct., 1979 they were withdrawn and the notices had been cancelled. Thereafter, ultimately the respondent No. 1 by letter dt. 27th Oct. 1979 finally released the exchange value of Rs. 2,61,000/- under the said Act. Hence, the petitioner was aggrieved by the acts of the respondent attaching the said sum on and from 19th Jan., 1978 till the payment was made, thereby depriving the petitioner of utilising the said amount to his gain. In any event, the petitioner had been deprived of the interest accrued thereon for the said period on the said sum.


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