[Case Brief] Shankarlal Agarwalla vs State Bank of India & Another- Calcutta High Court

Case NameShankarlal Agarwalla vs State Bank of India & Anr
CitationAIR 1987 Cal 29
Court Calcutta High Court
BenchJustice P Khastgir
Decided OnNovember 19, 1984
Relevant Act/Sections1) Income Tax Act, 1961- Section 31, Section 226(3) Section 281(b),

2) Constitution of India- Article 226,

3) High Denomination Bank Notes Act (Demonetisation), 1978 under Section 7 and sub section (2)
Author of the case briefVishad Srivastava

Brief facts and Procedural history-

  • On January 16, 1978, a High Denomination Bank Notes (Demonetisation) Ordinance, 1978 was published in the Gazette which subsequently became the Act in 1978.
  • Under this Act all the high denomination notes i.e. 1000, 5000,10000 Rupees notes will no longer be a legal tender.
  • Persons can exchange their tender on 19 January 1978 and as mention in the schedule of the act they have to fill out 3 forms given in the schedule and they can submit that 3 forms with their correct particulars in the head office of Reserve bank of India 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 and bank will either credit the money into the account of customer or give him the money in a legal tender
  • If the customer has not filled his particular correctly then in that case the Bank will refuse to pay for bank money 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.
  • On 19 Jan 1978, the petitioner went to the branch with 261 notes of 1000 Rupees to get it changed at State Bank of India, Netaji Subhash Road Branch with duly filled 3 copies of declaration forms.
  • Bank accepted the notes to transfer the deposit money into the Punjab National Bank account of the depositor.
  • Despite giving him the receipt still money was not transferred which was a contravention of section 7 of subsection 4 of the Act.
  • The petitioner comes before the Calcutta High Court under Article 226 with the allegations, that money was not being transferred despite being giving all the particulars and 3 copies of the duly filled form and having the receipt of the same from the State Bank of India.
  • That there has been mala fide intention on the part of respondent 1 by giving his account all particulars to respondent 2 i.e. Income Tax department against which I.T raids were done in the house and office of the petitioner. Petitioner had already submitted his tax then too he and his son were summoned under section 31 of the I.T Act on the contrary there 3245 money refundable to Petitioner on account of  T department.
  • The petitioner moved an application under Article 226 on 27th of March, 1981 and on 8 February 1983 Mr. Justice P.C. Borooah after hearing the parties granted leave to the petitioner to file a fresh application on the same cause on proper materials.

The Ratio of the Court-

It is one of the unique principles that Banker requires a duty of secrecy towards his customer and breach of which will be eligible for statutory damages or substantive damages but this principle has also embedded exceptions and these are (1)  the duty to obey an order under the Banker’s Book Evidence Act, (2) cases where a higher duty than the private duty is involved, as where danger to the State or public duty may supersede the duty of the agent to his principal, (3) of a bank issuing a writ claiming payment of an overdraft, stating on the face of it the amount of the overdraft, (4) the familiar case where the customer authorizes a reference to his banker. Under this present case there has been mention of circular of Finance Ministry to monitor the account and render the details of the huge demonetized depositor so here comes the exception of greater public interest. Hence, the petitioner would not be granted any damages for interest.

Decision Held-

For the reason aforementioned the plaintiff writ jurisdiction was liable to be set aside and dismissed.