Punjab National Bank vs Popular Plastic Udyog And Ors.
1996 Latest Caselaw 14 Del

JUDGMENT

Manmohan Sarin, J.

(1) This is a suit filed by the plaintiff-bank for recovery of Rs. 9,11.279.15 from the defendants. The plaintiff's case in brief is that the defendant No. 1, is the sole proprietorship concern of defendant No 2. Defendant No. 2 had approached the plaintiff-bank for the grant of certain loan facility for any purpose of carrying on business of manufacture of Poly Propylene Palathelena, Hm (High Density) Tubes and bags, plastic tarpaulin etc.

(2) The plaintiff-bank had initially granted Cash Credit Facility of Rs. 2,50,000.00 which was raised to Rs. 4,50,000.00 as on 19.4.1983 and to Rs. 5,00,000.00 on 26.2.1986. The defendant had also obtained a temporary Credit Cash Facility of Rs. 50,000.00, which was merged into the Cash Facility thereby totalling to Rs. 5,00,000.00.

(3) Defendant No. 2 had also hypothecated stock of raw materials to secure the amount advanced under the Cash Credit Facility. Defendants had also obtained a Term Loan of Rs. 1,37,000.00. The plaintiff has set out the details of the disbursement of Term Loan in para 11 of the plaint. The plaintiff's case is that defendant No. 4, who is husband of defendant No. 2 had offered to stand guarantee and executed agreement of guarantee. Defendant No. 4, further to secure the repayment of Credit Loan and Cash Loan, mortgaged the immovable property i.e. property bearing No. D-14A/7A, Model Town, Delhi-9. Defendant No. 4 had duly deposited the sale deed and had also signed letters PW1/10 and PW1/11 in favour of the plaintiff- bank.

(4) The plaintiff's case is that, it came to know on 6.3.1987, that defendant No. 2 had converted the sole proprietorship concern into a partnership concern of which defendant No. 2 and defendant No. 3 who is the son of defendant Nos. 2 and 4, became partners.

(5) The defendants were liable to pay interest in the Cash Credit Account(c) 6.5 % P.A. over and above the Bank rate with a minimum of 16.5%... The Term Loan facility was repayable at quarterly instalments of Rs. 6,850.00 plus interest @ 3.5% over the Reserve Bank rate with a minimum of 13.5%. The defendants had duly signed balance confirmation letters and had not disputed their liability as such. As the defendants were in fault to make the payment under the Cash Credit Account and Term Loan Account, the plaintiff served a notice through his Advocate Mr. Jagdeep Kishore, wherein an amount of Rs. 7,06,146.00 was demanded together with interest. The defendants acknowledged their liability and offered to make a paymentonl5.5.1986.SixpostdatedchequesofRs.20,000-eachonlywereissued out of which one cheque was encashed, while five cheques were returned dishonoured. The plaintiff again, served a notice on 5.10.1988, calling upon the defendants to pay the amount due.

(6) The plaintiff in the plaint has claimed a sum of Rs. 8,02,217.05 under the Cash Credit Hypothecation Account and Rs. 1,09,062.10 under the Term Loan Account. After taking into account the payments made, the plaintiff claimed a sum of Rs. 1,09,062.10 as being the amount due under the Term Loan with interest till 1.1.1989 and Rs. 8,02,217.05 being the amount due under the Cash Credit Account with interest upto 1.1.1989.

(7) The written statement was filed by the defendant No. 2 and 4. They sought to deny the liability on the ground that defendant No. 4 had stood guarantee for the sole proprietorship and not for the partnership firm. However, during the course of the suit, defendants offered to pay a sum of Rs. 6.54 lacs in all on 12.8.1991. The defendant offered to pay Rs. 3,00,000.00 within three months failing which the mortgaged property may be ordered to be attached. As the defendant failed to pay a sum of Rs. 3,00,000.00, warrants of attachment were issued in respect of the mortgage property bearing No. D-14A/7A, Model Town, Delhi-9, on 30th July,1992.

(8) On 6.7.1993, a preliminary mortgage decree in favour of the plaintiff-Bank in the sum of Rs. 6,54,000.00 was passed. The defendant failed to pay the sum in terms of the preliminary decree and on 24.5.1994, a final decree to the extent of Rs. 6.54 lacs was passed. A final mortgage decree was passed in favour of the plaintiff for the sale of the mortgage property bearing No. D-14A/7A, Model Town, Delhi-9. The question of pendente lite interest for the balance amount was left to be considered at the time of the final disposal of the suit.

(9) On 9.5.1995, defendant No. 3 offered to pay the entire suit amount of Rs. 9,11,279.15 with costs and pendente lite and future interest @ 6% P.A. Defendant No. 3 stated that he would pay a sum of Rs. 4,25,000.00 within four months and balance within a period of two years in quarterly instalments. The case was adjourned to enable to said defendant to obtain authorization from the other defendants. Thereafter, none appeared for the defendants on 9-5-1995 awl the defendants were proceeded ex parte. An affidavit by way of ex parte evidence has been filed on behalf of Sh. V.K. Nischal of behalf of plaintiff.

(10) By this affidavit, the plaintiff has proved power of attorney authorising Sh. V.K. Nischal to sign and verify the plaint. The said power of attorney is Ex.PW-l / 1. From the affidavit the plaintiff has proved the following facts and documents:- (I)The plaintiff granted Cash Credit(Hypothecation) Facility on 19.4.1983 of Rs. 2,50,000.00 - which was enhanced to Rs. 4,50,000.00 and finally to Rs. 5.0 Lacs on 26.2.1986. A temporary Cash Credit Facility of Rs. 50,000.00 was granted which was not adjusted by the defendant within three months. The temporary facility was merged into Cash Credit Facility of Rs. 5.0 lacs thereby totalling to Rs 5.50 lacs. In consideration of the grant of the Cash Credit Facility, the defendants had signed an account Opening from on 19.4.1983, which is Ex.PW-l/2. Defendant No. 2 had also signed and executed an agreement of hypothecation dated 6.2.1986, which is Ex. PW-1/3. (ii) A Term Loan facility of Rs. 1.37 lacs was al bow granted to the defendant No. 1. In consideration of the Term Loan Facility, defendant No. 2 signed an agreement of hypothecation on 1.4.1983 which is Ex.PW-l / 4. Defendants duly availed of the aforesaid two facilities. (iii) Defendant No. 4 is the Guarantor and has executed the agreement of guarantee on 19.4.1983,9.9.1983 and 26.2.1986. These documents are Ex. PW-1 /5, PW-1/6 and PW-1 /7. Defendant No. 4 also mortgaged his immovable property and deposited title deeds in respect of his property bearing No. D-14A/7A,ModelTown, Delhi. Ex. PW-1 /8isthesale deed. Ex. PW-I /9 is the receipt, EX. PW-1 . 10, PW-1/11 and PW-1/12 are the letters dated 24.5.1983, 9.9.1983 and 26.2.1986 written by defendant No. 4 for confirming the creation of equitable mortgage. A letter dated 25.5.1983, was written by the plaintiff acknowledging the receipt of the letter dated 24.5.1983 by defendant No. 4, which has been marked as Ex. PW-1/13. (iv) Ex. PW-1/14 to Ex. PW-1/19 are the balance confirmation letters signed by defendant No. 2. Ex. PW-1 /20toEx. PW-1/21-A are the letters written by defendant No. 3 on 6.3.1987,9.3.1987 and 15.5.1987. Ex. PW-1/22 is the statement of stocks submitted by the defendants showing value of the stock as Rs. 7,77,657.50 as on 28.2.1987. (v) Ex. PW-1/23, Ex. PW-1/25 and Ex. PW-1/27 are three notices of demand and Ex. PW-1 /24 and PW-1 /26 a re the postal receipts for the said notices. Defendant No. 2 in order to repay the plaintiff issued six cheques of Rs. 20,000.00 each which were dishonoured with remarks "refer to drawer". Ex. PW-1 /28 to PW-1/32 are the cheques issued by defendant No. 2 in favour of plaintiff and Ex. PW-1 /33 to Ex. PW-1 / 36 are the memos of return. The statement of accounts have also been exhibited as Ex. PW-1 /37 to PW-1 /4C, which give the balance due from the defendants from time to time and as on the date of filing of the suit.

(11) The defendant No. 3 has admitted the entire suit amount and the only defense raised by the defendants is that the loan documents were signed in blank at the time of disbursement of the loan, which does not inspire any confidence. The defendants have not adduced any evidence. The defendants have failed to even place any documents on record in support of their defense. Moreover, defendant No. 3, son of defendant Nos. 2 and 4, has even admitted the liability for suit amount.

(12) In these circumstances, the suit of the plaintiff is decreed for Rs. 9,11,279.15 with pendente lite and future interest @ 15% p.a. till the date of realisation against the defendants. The plaintiff shall also be entitled to costs against the defendant. It is further ordered that as far as the defendant No. 4 is concerned, the liability of defendant No. 4 shall not exceed to Rs. 6.54 lacs which is the amount for which the final mortgage decree was passed. The suit stands disposed of with. the above directions.