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1986 DIGILAW 194 (CAL)

NAGARMAL MAHAVIR PROSAD v. MANAGER, U. B. I.

1986-05-02

CHITTATOSH MUKHERJEE, NIRENDRA KRISHNA MITRA

body1986
NIRENDRA KRISHNA MITRA, J. ( 1 ) THIS appeal is at the instance of the writ petitioner against the rejection of the writ application moved against the act of the respondent No. 1 in not selling the demand drafts to the writ petitioner No. 1 at the alleged agreed concessional rate of 6 paise per cent. ( 2 ) THE facts alleged in the writ petition inter alia are that the writ petitioner No. 1 is a distributor of Rationed Commodities in modified rationing area viz. Lalgola and Bhagabangola in the district of Murshidabad under the Food and Supplies Department, Government of West Bengal. The writ petitioner No. 1 takes delivery of the rationed commodities from the godowns of the Food Corporation of India, payment of such commodities are accepted by the District Manager, Food Corporation of India through demand drafts. Since the inception of the Lalgola Branch of the United Bank of India, the writ petitioner No. 1 had all along been making payment of the said rationed articles to the Food Corporation of India through the said bank by demand drafts. Concessional rate for sale of demand drafts had all along been allowed to the writ petitioner No. 1 by the Bank and the Lalgola Branch of the United Bank of India used to charge 6 paise per cent with minimum of Rs. 2/- for such demand drafts, since the opening of the said Branch. The Bank, however, towards the end of the year 1979 enhanced the said rate. The writ petitioner No. 1 made several negotiations with the Bank and it was agreed by and between the parties that if the writ petitioner No. I had made Rs. 20,000/- as a term deposit with the Bank within the agreed period, it would be allowed the rate of 6 paise per cent for the demand drafts. ( 3 ) THE writ petitioner No. 1 thereafter initially made the term deposit of RS. 10,000/with the Bank within 8. 1. 80. The second deposit of Rs. 10,000/- was ultimately made to the bank on 30-4-1980. In spite of such term deposits the bank used to charge enhanced rates for the sale of demand drafts to the writ petitioner No. 1 and ultimately raised the said rate to 20 paise per cent. 10,000/with the Bank within 8. 1. 80. The second deposit of Rs. 10,000/- was ultimately made to the bank on 30-4-1980. In spite of such term deposits the bank used to charge enhanced rates for the sale of demand drafts to the writ petitioner No. 1 and ultimately raised the said rate to 20 paise per cent. Against the said increased rate charged by the Bank the writ petitioner No. 1 moved this Court and obtained Civil Order No. 8280 (W) of 1983. ( 4 ) THE main contention of the writ petitioner No. 1 in the writ application was that the Bank was bound to charge the concessional rate of 6 paise per cent for the demand drafts to the writ petitioner No. 1 as per agreement by and between the parties, pursuant to which, the writ petitioner No. 1 had made time deposits with the bank. The bank filed an affidavit-in-opposition categorically denying the existence of any such agreement with the writ petitioner No. 1. It was further averred in the said affidavit-in-opposition that the selling of demand drafts and/or bank drafts was not at all a statutory obligation and/or function on the part of the bank and it was only an ancillary service which the Bank rendered at its normal condition to its customers to facilitate their remittance of funds from one place to another through the bank and no customer could claim this facility as a matter of right. The Bank relied upon its Circular dated 28th October, 1974 under which remittances by bank draft between places where there were no branches of Reserve Bank of India or State Bank of India, the bank rate charged was 30% i. e. 30 paise per cent. The Managers and Agents of the branches were empowered to exercise their discretion and to allow concession in charging the particular rate. These officers exercise their discretion inter alia having regard to the amount of cash accumulation in their branches. The respondents in their affidavit-in-opposition have given the reason for altering the charges for issue of bank drafts. There had been rise of cash accumulation at the alarmingly high rate of Lalgola Branch of the Bank and therefore the Bank was compelled to raise the bank charge for remittances by bank drafts. The respondents in their affidavit-in-opposition have given the reason for altering the charges for issue of bank drafts. There had been rise of cash accumulation at the alarmingly high rate of Lalgola Branch of the Bank and therefore the Bank was compelled to raise the bank charge for remittances by bank drafts. Because of the time deposits made by the writ petitioner No. 1 with the bank the writ petitioner was entitled to obtain the facilities of getting bank drafts at the concessional rate at which it was enjoying. In the said affidavit-in-opposition it was further stated that the Bank never represented to the writ petitioner that such concessional rate would be 6 paise per cent in case the writ petitioner No. 1 kept time deposits with the Bank. ( 5 ) ON April 2, 1984 Chandan Kumar Banerjee, J. disposed of the above Civil Order by rejecting the writ petition. ( 6 ) AGAINST the said judgement and order this appeal has been taken. Mr. Mihir Kumar Roy, the learned Advocate appearing on behalf of the appellants has submitted before this Court that in view of the agreement entered into by the Bank with the writ petitioners as would appear from the Bank's letter dated 8/17-4-1980 which was marked as Annexure 'b' to the writ petition, the Bank was bound to sell the demand drafts to the appellants at the concessional rate of 6 paise per cent especially in view of the fact that the writ petitioner No. 1 had deposited Rs. 20,000/- with the Bank as time deposit and as such the Bank was estopped from backing out from the promise as given in its said letter which was Annexure 'b' to the writ application. In support of his submission Mr. Roy referred to the decisions in Union of India v. Anglo Afghan Agency Limited, reported in AIR 1968 SC 718 , Century Spinning and Manufacturing Co. Ltd. v. Ulhas Nagar Municipal Council, reported in AIR 1971 SC 1021 ; Motilal Padampat Sugar Mills v. State of U. P. , 1979 2 SCC 409 . ( 7 ) MR. Roy referred to the decisions in Union of India v. Anglo Afghan Agency Limited, reported in AIR 1968 SC 718 , Century Spinning and Manufacturing Co. Ltd. v. Ulhas Nagar Municipal Council, reported in AIR 1971 SC 1021 ; Motilal Padampat Sugar Mills v. State of U. P. , 1979 2 SCC 409 . ( 7 ) MR. Subrata Roy, learned Advocate appearing on behalf of the Bank, however, submitted before this Court and the plea of promissory estoppel as alleged by the appellants was non available to them as there was no promise made by one party intending to create legal relation or legal effect and when there was no proof that the other party had acted upon it and changed his position according to such promise the doctrine of promissory estoppel could not be applied. ( 8 ) MR. Roy, learned Advocate appearing for the Bank further submitted that as the time deposit made by the appellants was only for 65 months which had lapsed long ago, the appellants also could not raise the plea of promissory estoppel on the basis of such deposit. It was also submitted by Mr. Roy on behalf of the Bank that from the letter Annexure 'b' to the writ petition it could not be spelt out that the Bank was giving out any promise to sell the demand drafts to the appellants at the alleged rate of 6 paise per cent but in the said letter the Bank's stand was made quite clear that unless the appellants had made the time deposit, concessional rate of commission for the demand drafts could not be made available to them. ( 9 ) DOCTRINE of promissory estoppel is certainly an equitable doctrine. It can only be applied in a case where there is no concluded contract but promise has been made by one party intending to create legal relation or legal effect, legal relationship to arise in the future and the other party has acted upon such promise or representation and changed his position or that the other party relying on such promise has acted to its detriment. In the case reported in Union of India v. Anglo Afgan Agency Limited, ( AIR 1968 SC 718 ) (supra) it was held by the Hon'ble Supreme Court that the Court was unable to accede to the contention that the executive necessity releases the Government from honoring its solemn promises relying on which citizens have acted to their detriment and that the Government is not exempt from the liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it. In the case of Jit Ram v. State of Haryana reported in (1981) 1 SCC 11 the Supreme Court, however, had taken slightly different view and held that the doctrine of promissory estoppel was not available against the exercise of executive functions of the State and the State could not be prevented from exercising its functions under the law but the decision in that case was contrary to the decision reported in Motilal Padampat Sugar Mills v. State of U. P. , ( AIR 1979 SC 621 ) (supra) where explaining the doctrine of promissory estoppel the Hon'ble Supreme Court held relying upon the decision of the said Court in Century Spinning and Manufacturing Company Ltd. v. Ulhas Nagar Municipal Council, ( AIR 1971 SC 1021 ) (supra) that the doctrine of promissory estoppel could not be defeated by invoking the defence of executive necessity suggesting by necessary implication that the doctrine of executive necessity was available to the Government to escape its obligation under the doctrine of promissory estoppel and public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their positions to their prejudice. ( 10 ) ALL the aforesaid decisions were considered by the Hon'ble Supreme Court in the subsequent judgement in Union of India v. India Tobacco Company Ltd. , reported in (1985) 4 SCC 369 at p. 370 where the Hon'ble Supreme Court had accepted its earlier view taken in Motilal padampat Sugar Mills v. State of U. P. , ( AIR 1979 SC 621 ) (supra) but disapproved the view taken by the said Court in Jit Ram v. State of Haryana's ( AIR 1980 SC 1285 ) (supra) that the doctrine of promissory estoppel was not available against the exercise of executive functions of the State. ( 11 ) THE doctrine of promissory estoppel thus is an equitable doctrine and it must yield when the equity so requires and the Government or public bodies are as much bound as private individuals to carry out representation of fact and promises made by them relying on which other persons have altered their positions to their prejudice and the Government or the public bodies cannot claim immunity from the applicability of the Rule of promissory estoppel and repudiate the promise made by it on the ground that such promise may fetter its future executive action and the doctrine of promissory estoppel cannot be defeated by invoking the defence of executive necessity, suggesting by necessary implication that the doctrine of executive necessity is available to the Government or public body to escape its obligation under the doctrine of promissory estoppel. ( 12 ) THE main question is therefore that in order to invoke the doctrine of promissory estoppel it must be seen whether the primrose has made a promise or representation either in exercising its executive function or otherwise and whether the other party has acted upon it and altered its position to its prejudice. ( 13 ) IN the present case there was an arrangement between the appellants and the Bank that the Bank would sell the demand drafts to the appellants at the concessional rate; such rate initially being 6 paise per cent was later on increased to 20 paise per cent. It was further assured by the Bank that if the appellants had kept time deposit with the Bank it would get concessional rate in the matter of receiving Bank Drafts from the Bank. It was further assured by the Bank that if the appellants had kept time deposit with the Bank it would get concessional rate in the matter of receiving Bank Drafts from the Bank. From the letter of Bank dated 8/17-4-1980 which is Annexure 'b' to the writ application which the appellants heavily rely upon it would also clearly appear that the Bank reiterated and/or reassured the said fact that if time deposits were made by the appellants they would be entitled to get confessional rate in the matter of getting bank drafts. From the said letter it does not appear, however, that the Bank ever made any promise or representation that it would always sell bank drafts at the rate of 6 paise per cent only as alleged by the appellants. Moreover the selling of demand drafts is not it all a statutory obligation and/or function in the part of the Commercial Bank and is merely an ancillary service which the Bank venders in its normal condition to its customers of facilitate their remittance of funds, from one place to another through it. No customer can claim this facility as a matter of right and the doctrine of promissory estoppel cannot be invoked in such a case. ( 14 ) IT is also undisputed that the concessional rate may be varied from time to time and that the Bank had increased such rate to 30 paise per cent but the appellants were getting such Bank Drafts at the rate of 20 paise per cent at the relevant rime which is certainly a concessional one compared to the increased rate of 30 paise per cent. Further fact is that the time fixed for keeping the agreed amount of Rs. 20,000/- with the Bank, against which the appellants could claim the concessional rate in the matter of getting demand draft, is also over. ( 15 ) FURTHERMORE, there is nothing before this Court to see that the appellants had altered their positions or suffered anything by acting upon the alleged promise or representation made by the Bank so as to enable them to get any relief by invoking the doctrine of promissory estoppel. ( 15 ) FURTHERMORE, there is nothing before this Court to see that the appellants had altered their positions or suffered anything by acting upon the alleged promise or representation made by the Bank so as to enable them to get any relief by invoking the doctrine of promissory estoppel. ( 16 ) THE writ petition filed by the appellant was bound to fail also on the ground that the same raises disputed questions of fact relating to an alleged agreement between the Bank and the appellant regarding the rate of charge for bank draft facilities. ( 17 ) WE therefore, hold that the judgement of the learned trial Judge in appeal does not suffer from any illegality and/or infirmity and we find no reasons to interfere with the same. ( 18 ) THE appeal is therefore dismissed without any order as to costs. ( 19 ) CHITTATOSH MOOKERJEE, J. :- I agree. Appeal dismissed.