Canara Bank and Ors. Vs. Standard Chartered Bank
EmailAppeal: Civil Appeal No. 4456 of 1995
(From the Judgment and Order dated 13.3.95 of the Special Court (Trial of Offences Relating to Transactions in Securities) at Bombay in S.C.S. No. 13 of 1994)
(From the Judgment and Order dated 13.3.95 of the Special Court (Trial of Offences Relating to Transactions in Securities) at Bombay in S.C.S. No. 13 of 1994)
Petitioner: Canara Bank and Ors.
Respondent: Standard Chartered Bank
Apeal: Civil Appeal No. 4456 of 1995
(From the Judgment and Order dated 13.3.95 of the Special Court (Trial of Offences Relating to Transactions in Securities) at Bombay in S.C.S. No. 13 of 1994)
(From the Judgment and Order dated 13.3.95 of the Special Court (Trial of Offences Relating to Transactions in Securities) at Bombay in S.C.S. No. 13 of 1994)
Judges: B.N. KIRPAL, N. SANTOSH HEGDE & ASHOK BHAN, JJ.
Date of Judgment: Oct 30, 2001
Appearances:
Mr. Mihir Thakore, Senior Advocate, Ms. Sunita Dutt, Mr.Pradeep Sancheti, Mr. Nilesh Parikh, Advocates with him for the Appell-ants.
Mr.K.S. Cooper and Mr. V.A. Bobde, Senior Advocates, Mr. T.K. Cooper, Mr.U.A. Rana, Mr. Mahesh Agarwal, Mr. Mamkrishnan, Mr. Rishi Agarwal, Mr. V.K.Verma (N.P.) and Ms. Shalini Mittal, Advocates for M/s. Gagrat & Co., Advocates with them for the Respondent.
Head Note:
CIVIL LAW
Civil Procedure Code, 1908
Orders VI and VII with Special Court (Trial of Offences Relating to Transaction in Securities) Act, 1992 – Pleadings – Written statement – Earlier plea that there was squaring up of the trans-action – Other plea of repayment – Attempt to lead evidence that transaction was opposed to public policy – Proving of cheque also not allowed – No application for amendment moved – Attempt to seek amendment at SLP stage. Held that special court was justi-fied in not allowing the evidence as said plea would be contrary to the pleas already taken. Amendment, thus could not be allowed at SLP stage. Appeal dismissed. Case of BOI Finance Ltd. re-ferred. (Para 8)
Cases Reffered:
1. B.O.I. Finance Limited v. Custodian & Ors. (JT 1997 (4) SC 15) (Para 8)
JUDGEMENT:
KIRPAL, J.
1. This is an appeal against the decision of the Special Court (Trial of Offences Relating to Transaction in Securities) Act, 1992 (hereinafter referred to as “the Special Court”). According to the decree, the special court found that a sum of Rs. 60,64,71,275.12., was payable by the appellant to the respondent who was also held entitled to interest at the rate of 20 per cent per annum from 25th November, 1991, till the payment of the decretal amount. Costs were also awarded in favour of the re-spondent. We are informed that the decretal amount including the costs have been paid to the respondent by 1995.
2. The respondent had filed a suit against the appellant basing dues on three transactions which had taken place between them. On 23.8.1991, the appellant purchased Government of India securities 2008-A of face value of Rs. 10 crores at the rate of Rs. 101.50 and on 26.8.1991, it purchased similar securities of the face value of Rs. 7 crores at the rate of Rs. 101.50 and a similar transaction was entered into on 14.9.1991 where security of face value of Rs. 43 crores was purchased at the rate of Rs. 101.50. In this manner, securities of the face value of Rs. 60 crores were purchased from the appellant by the respondent.
3. The payment for the aforesaid was made and in lieu thereof the appellant-bank delivered to the respondent three cost memos and 3 SGL transfer forms. When these transfer forms were presented to the RBI, they were returned because the account of the appellant with the Reserve Bank did not show that the said SGL forms could be honoured. These SGLs were presented twice again but without success. Ultimately, it is an admitted case, that the respondent did receive SGLs of the face value of Rs. 1.61 crores. The suit which was filed was for Rs. 58.39 crores plus interest thereon. Written statement was filed and one of the main pleas which was taken was that the account had been squared off. On the pleas of the parties, 21 issues were framed which were as follows:
1. Whether the suit is bad for non- joinder of necessary parties and not maintainable as alleged in para 1 of the written state-ment of defendant no. 1?
2. Whether this Honourable Court has no jurisdiction to entertain and try the present suit as alleged in para 1 of the written statement of defendant no.1?
3. Whether the defendants are personally, jointly and severally liable to the plaintiffs as averred in para 2 of the plaint?
4. Whether the suit instituted by the plaintiffs against defend-ant nos. 2 to 11 is not maintainable as alleged in para 1 of the written statement of defendant nos. 2 to 11?
5. Whether this Honourable Court has no jurisdiction to entertain and try the suit against defendants 2 to 11 as alleged in para 2 of the written statement of defendants 2 to 11?
6. Whether the claim is barred by limitation as against defend-ants 2 to 11 as alleged in paras 3 and 10 of the written state-ment of defendants 2 to 11?
7. Whether defendant nos. 2 to 7 and 11 are not liable to the plaintiffs having ceased to be trustees as alleged in para 13 of the written statement of defendants 2 to 11?
8. Whether there was an informal arrangement as stated in para 4 of the written statement whereby the plaintiffs at the directions of Hiten P. Dalal purported to buy securities from counter par-ties and whether subsequent purported sales of these securities were also negotiated by Mr. Hiten P. Dalal and disguised sales made at such negotiated prices to counter parties/banks designat-ed by Mr. Hiten P.Dalal?
9. Whether pursuant to the alleged informal arrangement stated in para 4 of the written statement, the plaintiffs had directly or indirectly lent and advanced monies to Mr. Hiten P. Dalal under purported transaction of face value of Rs.58.39 crores and/or face value of Rs. 60 crores which are part of their transactions involving the plaintiffs, Mr. Hiten Dalal, Bank of Karad and Citibank by which Hiten P. Dalal received directly or indirectly monies from the plaintiffs which he subsequently repaid?
10. Whether the suit transactions entered into by the plaintiffs with the Can Bank Mutual Fund were in fact entered into by the plaintiffs on behalf of Hiten Dalal as alleged in para 5(d) of the written statement of defendant no. 1?
11. Whether in such transactions, plaintiffs were carrying Hiten P. Dalal’s open position as their own position as stated in para 4 of the written statement?
12. Whether in the suit transactions, the defendants fund was used as intermediary for transfer of monies advanced by the plaintiffs to Mr. Hiten P. Dalal?
13. Whether the plaintiffs prove that they received half yearly interest due on 23.11.1991 on securities covered under suit SGL’s on or about 25.11.1991 as alleged in para 11 of the plaint?
14. Whether the plaintiffs prove that they had presented the SGL dated 23.8.1995 for F.V. Rs. 7 crores on the date as alleged in para 10 of the plaint?
15. Whether the plaintiffs prove that they had presented the 3 SGL transfer forms were presented by the plaintiffs to RBI on at least one occasion between 20.12.1991 and 14.5.1992 as alleged in the plaint?
16. Whether the liability of the defendants to the plaintiffs under the transactions engaged in between the parties on 23.8.1991, 28.8.1991 and 4.9.1991 stood square off as alleged in para 5(1) of the written statement of defendant no. 1?
17. Whether the transactions between the plaintiffs and the 1st defendants as also the transactions between the 1st defendants and the Bank of Karad was squared off by Hiten Dalal as alleged in para 5(1) of the written statement of defendant no.1?
18. Whether the liability of the defendants under the 3 SGL transfer forms under the transactions engaged between the parties on 23.8.1991, 26.8.1991 and 4.9.1991 stood squared off as alleged in para 7 of the written statement of defendants 2 to 11?
19. Whether the plaintiffs are entitled to decree in the sum of Rs. 72,35,31,081.95 or any other sum together with interest on the principal sum adjudicated at the rate of 20% per annum or at any other rate as claimed by the plaintiffs?
20. Whether the plaintiffs are entitled to any relief and if so what?
21. Costs?
4. During the course of the trial, the appellant sought to pro-duce in evidence a cheque bearing no. 127659 dated 27.5.1991. This cheque was sought to be tendered by the appellants’ witness but an objection was raised to the tendering of the same. Argu-ments were heard on the admissibility of the same and it was contended on behalf of the appellants herein that the case of the appellants was that there was an internal arrangement between the respondent and Hiten P. Dalal, who was a notified party, and it was pursuant thereto that the transaction in question had taken place and the said arrangement was opposed to public policy. By order dated 2nd/3rd March, 1995, the special court came to the conclusion that the plea which was now sought to be raised was not taken in their written statement and in fact, it was contrary to the contents of the written statement. The special court in its order also dealt with the question of transaction being opposed to the public policy and observed as follows:
“36. Thus, before the court there is no proof or material to show that there is any illegality. What the defendants want is to now lead evidence in support of a case which has not been pleaded at all. They want to built up in evidence a case which might or might not ultimately convince the court that all such transac-tions were against public policy. As stated above, such a case is not pleaded. It is in fact contrary to the pleadings. None of the authorities cited by Mr.Salve support the proposition that the court must admit or will admit evidence merely to enable a party to ultimately prove to the court a case which has not been plead-ed. None of the authorities support the proposition that the court must admit or will admit evidence merely to enable a party to ultimately prove to the court a case which has not been plead-ed. None of the authorities support the proposition that the court must permit evidence, on the ground that a possible case of the transactions being against public policy may be made out, when such a case is contrary to the pleadings and the admitted position between the parties. The mere fact that averments have been made about the 15% arrangement can be of no assistance. These averments were made to support a case of squaring of and/or repayment. Averments made for that purpose can’t be used to build up a possible case of the suit transactions being against public policy. There is, as yet no evidence before the court that the contracts are opposed to public policy. Thus, what the defendants want is that the court should permit leading of evidence which might enable them to take a plea which is not pleaded. This would be contrary to all established principles. No court can permit a party to go on a fishing expedition, particularly when the plea which is sought to be established is not even pleaded.
37. Further, before a contract can be said to be void on grounds of public policy it must be shown that the object and considera-tion of that contract was one which was illegal. The object and consideration of the suit contracts are purchase/sale of the securities and payment of price. Such securities contracts are normally entered into by banks. These may be for SLR purposes or in the normal course of business of the bank. It is the business of the bank to try and make profit. Thus, even if these were part of the 15% arrangement, provided there was such an arrangement, would not make them against public policy if it was a genuine security transaction. None of the circulars relied upon by Mr. Salve prohibit such transactions. In my opinion, none of the circulars have any bearing on the point under consideration. The suit transactions or transactions under the alleged 15% arrange-ment are not against the subject matter of these circulars. They are also not even against any policy laid down therein. I thus see no illegality. For this reason also no evidence can be per-mitted.
38. However, it must be immediately stated that if there was a fictitious transaction, it could possibly be construed as being against public policy, even de hors these circulars. It is also possible that the practice, if any, of arriving at a derived price, which is different from contract rates, can be termed as against public policy. These however, do not arise for considera-tion in this case. It is not the defendants case that the suit contracts are fictitious. In fact, as set out above,it is the defendant’s case that the suit transactions are genuine and entered into in normal course of securities business. There is no averment that the prices under the suit contracts are derived prices. There is no averment that on the basis of derived prices, plaintiffs made a profit of 15% on a resale of the securities purchased from the defendants. No such case has been pleaded in the pleadings. In fact, even though the alleged 15% arrangement is set out in the written statement and even though it is averred that the suit contracts are part of the 15% arrangement, it has significantly not been averred that in these transactions, profit of 15% had been earned by the plaintiffs. If that be so, there is no question of permitting evidence in support of such a plea.”
5. On the question of squaring up of the transaction, a plea which was squarely taken in the written statement, the counsel for the appellants made a statement that it did not wish to lead any further evidence.
6. By judgment dated 13.3.1995, issues 1, 2, 8, 9, 10, 11, 12, 14, 15, 16, 17 and 18 were answered in negative; issues 3,4 and 5 were not pressed; the court also held that issues 6 and 7 did not arise; issue 13 was held not to be proved and issues 19, 20 and 21 were answered in favour of the plaintiff.
7. We have heard the counsel for the parties at length. The main contention sought to be raised before us by Mr. Mihir Thakore, learned senior counsel appearing for the appellant-bank is that the special court ought to have allowed the appellants to lead evidence for proving its case that the transaction in question was opposed to public policy. He submitted that in any case, in this appeal, application has been filed for permission to amend the written statement and to lead additional evidence, this application should be allowed.
8. In our opinion, the decision of the special court calls for no interference. The plea which had been taken in the written state-ment essentially was that there was a squaring up of the transac-tion. This did not succeed as there was lack of evidence. The other plea of repayment also failed. We see no infirmity with the decision of the special court on this account with regard to the contention that the transaction was opposed to public policy. The special court was right in observing that no such plea has been raised in the written statement and we agree with the special court that permitting such a plea to be raised would be contrary to the plea already taken in the written statement namely, of squaring up or of repayment. The order relating to the admis-sibility of the cheque wherein the special court had come to the conclusion that such a plea could not be raised was passed on 2nd/3rd March, 1995. The appellant herein chose not to file any application for amendment of the written statement before the special court. It proceeded with the case and in our opinion, it is now too late to allow such an amendment in this Court. We are also not satisfied that there is any merit in the contention that the transaction in question would be void on the grounds of public policy. The allegation in this connection which the ap-pellant wanted to prove was that there was an understanding between the respondent and Hiten Dalal to the effect that Hiten Dalal will ensure a return of 15 per cent in turn and purchase and sale of securities would take place under the instructions of Hiten Dalal so as to ensure that the bank got this return. It was sought to be contended that such a transaction was contrary to the circulars of the Reserve Bank and were opposed to public policy. We agree with the observations of the special court which had been referred to herein above in connection with this connec-tion and furthermore, as held by this Court in B.O.I. Finance Limited v. Custodian & Ors. (JT 1997 (4) SC 15 = 1997 (10) SCC 488). The instructions which were issued by the Reserve Bank of India were meant to be complied with only by the banking compa-nies and could not be regarded as binding on the other parties. There was no evidence raised or sought to be raised in the pres-ent case which could possibly have led the court to the conclu-sion that the transaction was opposed to public policy.
9. In our opinion the special court, after taking into considera-tion the pleadings and the evidence on the record, was right in decreeing the suit of the respondent. We, accordingly, affirm the decree and dismiss the appeal with no order as to costs. In view of the above, all the interlocutory applications also stand dismissed.
1. This is an appeal against the decision of the Special Court (Trial of Offences Relating to Transaction in Securities) Act, 1992 (hereinafter referred to as “the Special Court”). According to the decree, the special court found that a sum of Rs. 60,64,71,275.12., was payable by the appellant to the respondent who was also held entitled to interest at the rate of 20 per cent per annum from 25th November, 1991, till the payment of the decretal amount. Costs were also awarded in favour of the re-spondent. We are informed that the decretal amount including the costs have been paid to the respondent by 1995.
2. The respondent had filed a suit against the appellant basing dues on three transactions which had taken place between them. On 23.8.1991, the appellant purchased Government of India securities 2008-A of face value of Rs. 10 crores at the rate of Rs. 101.50 and on 26.8.1991, it purchased similar securities of the face value of Rs. 7 crores at the rate of Rs. 101.50 and a similar transaction was entered into on 14.9.1991 where security of face value of Rs. 43 crores was purchased at the rate of Rs. 101.50. In this manner, securities of the face value of Rs. 60 crores were purchased from the appellant by the respondent.
3. The payment for the aforesaid was made and in lieu thereof the appellant-bank delivered to the respondent three cost memos and 3 SGL transfer forms. When these transfer forms were presented to the RBI, they were returned because the account of the appellant with the Reserve Bank did not show that the said SGL forms could be honoured. These SGLs were presented twice again but without success. Ultimately, it is an admitted case, that the respondent did receive SGLs of the face value of Rs. 1.61 crores. The suit which was filed was for Rs. 58.39 crores plus interest thereon. Written statement was filed and one of the main pleas which was taken was that the account had been squared off. On the pleas of the parties, 21 issues were framed which were as follows:
1. Whether the suit is bad for non- joinder of necessary parties and not maintainable as alleged in para 1 of the written state-ment of defendant no. 1?
2. Whether this Honourable Court has no jurisdiction to entertain and try the present suit as alleged in para 1 of the written statement of defendant no.1?
3. Whether the defendants are personally, jointly and severally liable to the plaintiffs as averred in para 2 of the plaint?
4. Whether the suit instituted by the plaintiffs against defend-ant nos. 2 to 11 is not maintainable as alleged in para 1 of the written statement of defendant nos. 2 to 11?
5. Whether this Honourable Court has no jurisdiction to entertain and try the suit against defendants 2 to 11 as alleged in para 2 of the written statement of defendants 2 to 11?
6. Whether the claim is barred by limitation as against defend-ants 2 to 11 as alleged in paras 3 and 10 of the written state-ment of defendants 2 to 11?
7. Whether defendant nos. 2 to 7 and 11 are not liable to the plaintiffs having ceased to be trustees as alleged in para 13 of the written statement of defendants 2 to 11?
8. Whether there was an informal arrangement as stated in para 4 of the written statement whereby the plaintiffs at the directions of Hiten P. Dalal purported to buy securities from counter par-ties and whether subsequent purported sales of these securities were also negotiated by Mr. Hiten P. Dalal and disguised sales made at such negotiated prices to counter parties/banks designat-ed by Mr. Hiten P.Dalal?
9. Whether pursuant to the alleged informal arrangement stated in para 4 of the written statement, the plaintiffs had directly or indirectly lent and advanced monies to Mr. Hiten P. Dalal under purported transaction of face value of Rs.58.39 crores and/or face value of Rs. 60 crores which are part of their transactions involving the plaintiffs, Mr. Hiten Dalal, Bank of Karad and Citibank by which Hiten P. Dalal received directly or indirectly monies from the plaintiffs which he subsequently repaid?
10. Whether the suit transactions entered into by the plaintiffs with the Can Bank Mutual Fund were in fact entered into by the plaintiffs on behalf of Hiten Dalal as alleged in para 5(d) of the written statement of defendant no. 1?
11. Whether in such transactions, plaintiffs were carrying Hiten P. Dalal’s open position as their own position as stated in para 4 of the written statement?
12. Whether in the suit transactions, the defendants fund was used as intermediary for transfer of monies advanced by the plaintiffs to Mr. Hiten P. Dalal?
13. Whether the plaintiffs prove that they received half yearly interest due on 23.11.1991 on securities covered under suit SGL’s on or about 25.11.1991 as alleged in para 11 of the plaint?
14. Whether the plaintiffs prove that they had presented the SGL dated 23.8.1995 for F.V. Rs. 7 crores on the date as alleged in para 10 of the plaint?
15. Whether the plaintiffs prove that they had presented the 3 SGL transfer forms were presented by the plaintiffs to RBI on at least one occasion between 20.12.1991 and 14.5.1992 as alleged in the plaint?
16. Whether the liability of the defendants to the plaintiffs under the transactions engaged in between the parties on 23.8.1991, 28.8.1991 and 4.9.1991 stood square off as alleged in para 5(1) of the written statement of defendant no. 1?
17. Whether the transactions between the plaintiffs and the 1st defendants as also the transactions between the 1st defendants and the Bank of Karad was squared off by Hiten Dalal as alleged in para 5(1) of the written statement of defendant no.1?
18. Whether the liability of the defendants under the 3 SGL transfer forms under the transactions engaged between the parties on 23.8.1991, 26.8.1991 and 4.9.1991 stood squared off as alleged in para 7 of the written statement of defendants 2 to 11?
19. Whether the plaintiffs are entitled to decree in the sum of Rs. 72,35,31,081.95 or any other sum together with interest on the principal sum adjudicated at the rate of 20% per annum or at any other rate as claimed by the plaintiffs?
20. Whether the plaintiffs are entitled to any relief and if so what?
21. Costs?
4. During the course of the trial, the appellant sought to pro-duce in evidence a cheque bearing no. 127659 dated 27.5.1991. This cheque was sought to be tendered by the appellants’ witness but an objection was raised to the tendering of the same. Argu-ments were heard on the admissibility of the same and it was contended on behalf of the appellants herein that the case of the appellants was that there was an internal arrangement between the respondent and Hiten P. Dalal, who was a notified party, and it was pursuant thereto that the transaction in question had taken place and the said arrangement was opposed to public policy. By order dated 2nd/3rd March, 1995, the special court came to the conclusion that the plea which was now sought to be raised was not taken in their written statement and in fact, it was contrary to the contents of the written statement. The special court in its order also dealt with the question of transaction being opposed to the public policy and observed as follows:
“36. Thus, before the court there is no proof or material to show that there is any illegality. What the defendants want is to now lead evidence in support of a case which has not been pleaded at all. They want to built up in evidence a case which might or might not ultimately convince the court that all such transac-tions were against public policy. As stated above, such a case is not pleaded. It is in fact contrary to the pleadings. None of the authorities cited by Mr.Salve support the proposition that the court must admit or will admit evidence merely to enable a party to ultimately prove to the court a case which has not been plead-ed. None of the authorities support the proposition that the court must admit or will admit evidence merely to enable a party to ultimately prove to the court a case which has not been plead-ed. None of the authorities support the proposition that the court must permit evidence, on the ground that a possible case of the transactions being against public policy may be made out, when such a case is contrary to the pleadings and the admitted position between the parties. The mere fact that averments have been made about the 15% arrangement can be of no assistance. These averments were made to support a case of squaring of and/or repayment. Averments made for that purpose can’t be used to build up a possible case of the suit transactions being against public policy. There is, as yet no evidence before the court that the contracts are opposed to public policy. Thus, what the defendants want is that the court should permit leading of evidence which might enable them to take a plea which is not pleaded. This would be contrary to all established principles. No court can permit a party to go on a fishing expedition, particularly when the plea which is sought to be established is not even pleaded.
37. Further, before a contract can be said to be void on grounds of public policy it must be shown that the object and considera-tion of that contract was one which was illegal. The object and consideration of the suit contracts are purchase/sale of the securities and payment of price. Such securities contracts are normally entered into by banks. These may be for SLR purposes or in the normal course of business of the bank. It is the business of the bank to try and make profit. Thus, even if these were part of the 15% arrangement, provided there was such an arrangement, would not make them against public policy if it was a genuine security transaction. None of the circulars relied upon by Mr. Salve prohibit such transactions. In my opinion, none of the circulars have any bearing on the point under consideration. The suit transactions or transactions under the alleged 15% arrange-ment are not against the subject matter of these circulars. They are also not even against any policy laid down therein. I thus see no illegality. For this reason also no evidence can be per-mitted.
38. However, it must be immediately stated that if there was a fictitious transaction, it could possibly be construed as being against public policy, even de hors these circulars. It is also possible that the practice, if any, of arriving at a derived price, which is different from contract rates, can be termed as against public policy. These however, do not arise for considera-tion in this case. It is not the defendants case that the suit contracts are fictitious. In fact, as set out above,it is the defendant’s case that the suit transactions are genuine and entered into in normal course of securities business. There is no averment that the prices under the suit contracts are derived prices. There is no averment that on the basis of derived prices, plaintiffs made a profit of 15% on a resale of the securities purchased from the defendants. No such case has been pleaded in the pleadings. In fact, even though the alleged 15% arrangement is set out in the written statement and even though it is averred that the suit contracts are part of the 15% arrangement, it has significantly not been averred that in these transactions, profit of 15% had been earned by the plaintiffs. If that be so, there is no question of permitting evidence in support of such a plea.”
5. On the question of squaring up of the transaction, a plea which was squarely taken in the written statement, the counsel for the appellants made a statement that it did not wish to lead any further evidence.
6. By judgment dated 13.3.1995, issues 1, 2, 8, 9, 10, 11, 12, 14, 15, 16, 17 and 18 were answered in negative; issues 3,4 and 5 were not pressed; the court also held that issues 6 and 7 did not arise; issue 13 was held not to be proved and issues 19, 20 and 21 were answered in favour of the plaintiff.
7. We have heard the counsel for the parties at length. The main contention sought to be raised before us by Mr. Mihir Thakore, learned senior counsel appearing for the appellant-bank is that the special court ought to have allowed the appellants to lead evidence for proving its case that the transaction in question was opposed to public policy. He submitted that in any case, in this appeal, application has been filed for permission to amend the written statement and to lead additional evidence, this application should be allowed.
8. In our opinion, the decision of the special court calls for no interference. The plea which had been taken in the written state-ment essentially was that there was a squaring up of the transac-tion. This did not succeed as there was lack of evidence. The other plea of repayment also failed. We see no infirmity with the decision of the special court on this account with regard to the contention that the transaction was opposed to public policy. The special court was right in observing that no such plea has been raised in the written statement and we agree with the special court that permitting such a plea to be raised would be contrary to the plea already taken in the written statement namely, of squaring up or of repayment. The order relating to the admis-sibility of the cheque wherein the special court had come to the conclusion that such a plea could not be raised was passed on 2nd/3rd March, 1995. The appellant herein chose not to file any application for amendment of the written statement before the special court. It proceeded with the case and in our opinion, it is now too late to allow such an amendment in this Court. We are also not satisfied that there is any merit in the contention that the transaction in question would be void on the grounds of public policy. The allegation in this connection which the ap-pellant wanted to prove was that there was an understanding between the respondent and Hiten Dalal to the effect that Hiten Dalal will ensure a return of 15 per cent in turn and purchase and sale of securities would take place under the instructions of Hiten Dalal so as to ensure that the bank got this return. It was sought to be contended that such a transaction was contrary to the circulars of the Reserve Bank and were opposed to public policy. We agree with the observations of the special court which had been referred to herein above in connection with this connec-tion and furthermore, as held by this Court in B.O.I. Finance Limited v. Custodian & Ors. (JT 1997 (4) SC 15 = 1997 (10) SCC 488). The instructions which were issued by the Reserve Bank of India were meant to be complied with only by the banking compa-nies and could not be regarded as binding on the other parties. There was no evidence raised or sought to be raised in the pres-ent case which could possibly have led the court to the conclu-sion that the transaction was opposed to public policy.
9. In our opinion the special court, after taking into considera-tion the pleadings and the evidence on the record, was right in decreeing the suit of the respondent. We, accordingly, affirm the decree and dismiss the appeal with no order as to costs. In view of the above, all the interlocutory applications also stand dismissed.
