The maintenance of record books is critical for banking institutions. Record books are of several types, such as account books, ledger books, and registers. This legislation arose out of a need to amend the law of evidence governing banking records. Post the amendment, any entry made in a banker’s book or its certified copy shall serve as prima facie evidence in court during a legal proceeding brought against or by the banking institution. The Bankers’ Books Evidence Bill was tabled before both houses of the parliament, and it was successfully made an Act on 1 October 1891.
The main aim of the Act is to establish a framework that may be followed for resolving disputes arising out of discrepancies in ledger entries. For example, if an individual deposits Rs. 4000 in a bank, the bank officer records the transaction in his accounts book. In the case of the customer claiming that he had deposited Rs. 5000, with a deficit of Rs 1000, the account book entry can be used as legitimate and admissible evidence in court in favour of the bank.
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Power to Extend Provisions of the Act
As per Section 3 of the Bankers’ Books Evidence Act, the State Government has the power to extend the provisions of the Act to the books of any individuals or partnerships. Such an extension is provided to persons maintaining at least three ordinary account books, namely a journal, a ledger, and a cash book. The clients’ business must be situated within the administrative territory of the State. Notification regarding the extension is to be furnished in the Official Gazette. The Government may rescind the extension at any time.
Mode of Proof of Entries in Bankers’ Books
As per Section 4 of the Bankers’ Books Evidence Act, if an entry is made in the banker’s book, then its certified copy shall be admissible as prima facie evidence in a court of law. The copy shall signify that such an entry has been made. The Act can be used to record transactions, accounts, and matters that the banking institution has indulged in. The certified copy is given the same weightage in court as the original copy. Thus, the production of the original banker’s book is optional in case of discrepancies in the functioning of the institution.
Bank Officer’s Non-Compellability in Book Production Case
An officer of a bank cannot be forced to produce the contents of a banker’s book in any legal proceeding in which the bank is not a party. This provision is as per Section 5 of the Bankers’ Books Evidence Act. He/she can also not be compelled to appear in court as a witness to make him prove transactions, accounts, or matters recorded. The only circumstance in which the same shall be permissible is if a judge made for special cause or a court orders as such. Thus, a banker enjoys certain immunities by virtue of their employment in the institution. The banker maintains the confidentiality of the company.
Inspection of Books by the Order of Court or Judge
As per Section 6 of the Bankers’ Books Evidence Act, any party to a legal proceeding can inspect the entries made in a banker’s book. The parties can take copies of the entries for any proceedings. A Judge or a Court must order the same. Additionally, the authority may order the bank to produce certified copies of entries, accompanied by a certificate stating that no further entries that are relevant to the case at hand are at its disposal. The certificates must be submitted before the court within a stipulated time.
The Judge or the Court need not pass the aforementioned order in the presence of the bank. However, the order must be served on the bank 3 days before the date it is to be executed unless otherwise specified by the court. During the three days available to the bank, it may decide on one of the following: filing a show cause against the order or offering to produce its books and copies at the trial.
Section 7 of the Bankers’ Books Evidence Act details costs. The Judge or the Court can decide the costs incurred per this Act’s provisions. Such costs may have been incurred for anything done pursuant to an order made or for applying to the authorities. The court may order that the bank pay the cost to any third party. This situation arises if the party has suffered a loss due to a delay or the bank’s fault.
The bank is considered a party to the proceeding with respect to payment or reception of costs. An order that a court does not make shall be executed by it as though it were a money decree passed by itself. An application for the same needs to be made by the party in whose favour the order was awarded.
Court’s Order Construed as Officer’s Order
An order made by a Judge or a Court allowing the inspection of banker’s books, preventing a bank officer from being forced to produce books, or with respect to costs shall be considered to be an order made by an officer holding a rank not lower than a Superintendent of Police. Orders made in pursuance of an inquiry or investigation conducted under the Code of Criminal Procedure or any other law in place for the time being shall be thus construed. The appropriate Government that employs the police officer conducting the inquiry provides specifications on this behalf.
- In the case of Anvar P. V. vs. P. K. Basheer and Ors, the court ruled that any special law would take precedence over a general law in place. Concerning the admissibility of banking records in electronic form, Section 2A of the Bankers’ Books Evidence Act would be considered instead of Section 65B of the Indian Evidence Act.
- In the case of Sonu and Amar v. State of Haryana, the court ruled that an objection pertaining to the admissibility of banking records can be allowed only if the party tendering the evidence could have resorted to another regular mode of evidence. This can also be allowed if the defect that exists can be cured at the stage of marking the document.
The primary objective of the Bankers’ Books Evidence Act was to provide guidelines to banking institutions regarding the production of relevant records in court during litigation. The certification process provided by the Act ensures that the records produced can be accurate and reliable pieces of legal evidence.
The provisions of this Act bind all banking institutions and must adhere to them strictly. If any discrepancies are found, then the banks are held responsible. If any legal proceeding is initiated against a bank, then the bank must take steps to be in pursuance of the provisions of this Act.
FAQs on the Bankers' Books Evidence Act
For what purposes can costs be incurred as per Section 7?
Costs may have been incurred for any activity in pursuance of an order made or for applying to a Judge or a Court.
Can a banker be compelled to produce records of their bank?
An officer of a bank cannot be forced to produce the contents of a banker's book in any legal proceeding in which the bank is not a party. This is as per Section 5 of the Bankers' Books Evidence Act. They can also not be compelled to appear in court as a witness to make him prove transactions, accounts, or matters recorded.
What are the different types of record books that a banking institution is mandated to maintain?
Records are mandated to maintain account books, ledger books, registers, and so on.
What is the purpose of the Bankers' Books Evidence Act?
The Act's main purpose is to ensure that any entry made in a banker's book or its certified copy shall serve as prima facie evidence in court during a legal proceeding brought against or by the banking institution.
Does a party to a legal proceeding have the right to inspect the bankers' book?
As per Section 6 of the Bankers' Books Evidence Act, any party to a legal proceeding can inspect the entries made in a banker's book. They also have the right to take copies of the entries for any proceeding. A Judge or a Court must order the same.