Union Bank Of India vs North India Electronics Pvt. Ltd.
1996 Latest Caselaw 527 Del

JUDGMENT

Manmohan Sarin, J.

(1) The plaintiff Bank had instituted the above suit against the defendants on 1.6.1985 for recovery of Rs. 2,36,484.45p. (Rupees Two lakhs Thirty-six Thousand Four Hundred Eighty-four and paise forty-five only). The plaint has been signed, verified and instituted by Shri V.K. Gera, an officer of the plaintiff-Bank, having the power of attorney in his favour.

(2) PLAINTIFF'S case in brief is that defendant No. I was a private limited company. Defendants 2 to 4 were its Chairman, Managing Director and Director respectively.

(3) Defendant No. I had approached the plaintiff for grant of the Discount Bill Purchasing facility (hereinafter referred to as Dbp facility) in addition to other facilities being enjoyed by the plaintiff. Defendant No. I would give to the plaintiff several bills covering consignments of 'Telebird' brand televisions, two-in-one's, cassettes, etc. to its various customers, including M/s.Tip Top Steel Furniture works. Electronics Division, Hyderabad. The defendant No. I, from time to time, presented sets of negotiable documents to the plaintiff, who purchased the same for being presented and retired and recovered the amount. The bills on presentation, when honoured, were received by the plaintiff. The interest on the outstanding bills was debited to the defendant No. l's current account with the plaintiff. The defendants under the facility were permitted to withdraw the amount of the said bills as advance, which they undertook to adjust on realisation of the bill. Defendants 2 to 4 signed Deeds of Guarantee, guaranteeing the due payment of the amounts that may become due and payable under the various facilities granted by the plaintiff to defendant No. 1.

(4) As per the averment made in the plaint, the plaintiff had purchased on 16.8.1982 four bills being Dbp Nos.l96 to 199, all drawn on M/s.Tip Top Furniture Works, Electronics Division, Hyderabad. The goods covering the said bills were declared to have been sent through the carriers by the defendant. The aggregate amount of the bills was Rs. l,57,793.28p. (Rupees One lakh fifty-seven thousand seven hundred ninety-three and paise twenty-eight only). The said bills were duly presented, but the drawees refused to retire the bills or make the payment thereof. These were returned back dishonoured to the plaintiff with the remarks 'Payments not forthcoming'. It is further averred in the plaint that apart from the aforesaid amount of Rs. l,57,793.28p. there were interest and other expenses that were debited to the current account of the defendant No. I and the same were treated as overdraft. The overdraft facility was to carry interest @18% per annum and a sum of Rs. 78,691.17 was due and payable to the plaintiff on this account. Plaintiff states that despite several requests and a notice of demand sent on 29.5.1985, the defendants failed and neglected to pay the amount due. The amounts claimed in the suit being Rs. 1,57,793.28 on account of the bills purchased and Rs. 78,691.17p. as due under the overdraft account, totalling Rs. 2,36,484.45p. (Rupees two lakh thirty- six thousand four hundred eighty-four and paise forty-five only).

(5) Summons in the suit were directed to be issued to the defendants on 16.7.1985. The defendants could not be served by ordinary means. Finally defendants I to 4 were served by substituted service by publication of notice in the daily news-paper 'Statesman' in the issue dated 11.11.1986 for appearance on 8.1.1987. None appeared for the defendants on the said date and the defendants were directed to be proceeded ex-parte.

(6) In the meanwhile, in March 1987 the plaintiff learnt that defendant No. 2 had expired. The plaintiff took steps to have the legal representatives of defendant No. 2, viz. defendants 2(A) to 2(D) brought on record. Defendants 2(A) to 2(D) also could not be served by ordinary means. The plaintiff thereupon moved an application under Order V Rule 20 of the Code of Civil Procedure, for effecting service on the said defendants by substituted means. The said application as allowed and defendants 2(A) and 2(D) were thereupon served by substituted means by publication in the daily newspaper 'Statesman' dated 17.1.1989 for appearance in the Court on 24.2.1989. As none appeared on behalf of defendants 2(A) to 2(D) the said defendants were also proceeded ex-parte on 10.5.1989.

(7) Defendant No. I Company in the meanwhile went into liquidation. The plaintiff thereupon moved an application, viz. CA.207/90 under Section 446 of the Companies Act to proceed against defendant No. I, which was in liquidation. The learned Company Judge vide orders passed in CA.207/90 permitted the plaintiff to proceed with Suit No. 1107/85 subject to the condition that the applicant (plaintiff herein) would not execute the decree against defendant No. I without the leave of the Court. The suit then proceeded against the defendant No. I through the official liquidator, who was also proceeded ex-parte on 27.10.1994.

(8) Plaintiffs were permitted to lead ex-parte evidence by way of affidavits. The plaintiff's have filed on record the affidavits of Shri Vijay Kumar Gera and Shri A.K. Sapra. Shri Vijay Kumar Gera, who had signed the plaint has proved the due institution of the suit. Shri Gera has also produced and proved on record the Power of Attorney dated 15.9.1991 and the Supplementary Power of Attorney dated 15.10.1992. He has also deposed that the plaint was instituted and Vakalatnama in favour of the Advocate signed by him pursuant to the authorisation. Shri A.K. Sapra, who was the Branch Manager of the plaintiff's branch at Chandni Chowk during the relevant time has deposed with regard to the documentary bill purchase facility provided to the defendants on 26.5.1982.

(9) The deponents of the aforesaid affidavits have duly proved on record the Power of Attorney in favour of Shri Vijay Kumar Gera, Exhibit PW.I /1; Certification by the Notary Public, Exhibit PW.I /2 and Supplementary Power of Attorney in favour of Shri V.K. Gera, Exhibit PW.I/3.

(10) The plaintiff has also produced and proved on record the Demand Promissory Note for the sum of Rs. 30,806.40p. in respect of Invoice No. 184/82/ 83 dated 13.8.1982. The bills, viz. PW.2/3 and PW.2/4; the consignment note, Exhibit PW.2/5 and the forwarding bills raised for collection and related documents with regard to bill purchase transactions, viz.. Exhibits PW.2/7 to Exhibit PW.2/11 have been produced and proved on record. Similarly, the plaintiff has placed and produced on record the Demand Promissory Note alongwith Invoice No. 181/82-83 and related documents being Exhibits PW.2/12 to Exhibit PW.2/16. Demand Promissory Note alongwith Invoice No. 186/82-83 have been placed and proved on record alongwith related documents, viz. Exhibit PW.2/17 to Exhibit PW.2/22.

(11) The plaintiff has also placed on record the Letter of Hypothecation Exhibit PW.2/1 and the Statement of Account proved under the Banker's Book Evidence Act, viz. Exhibits PW.I/4 and PW.I/5.

(12) The plaintiff has duly proved its case that the defendants owe to the plaintiff a sum of Rs. 1,57,793.28 on account of Discount Bill Purchasing Facility and a sum of Rs. 78,691.17 towards the overdraft facility. The defendants are also jointly and severally liable to the plaintiff for the amount claimed in the suit. The plaintiff shall also be entitled to pendente lite and future interest @17.5% per annum on the suit amount of Rs. 2,36,484.45 from the date of the suit till realisation.

(13) In view of the foregoing, I decree the plaintiff suit with costs against the defendants for the sum of Rs. 2,36,484.45 with interest @17.5% from the date of the suit till realisation.

(14) Plaintiff shall not be entitled to execute the decree against defendant No. I except with the leave of the Court, as ordered by the learned Company Judge.

(15) The liability of defendants 2(A) to 2(D) shall not exceed the total amount as may have devolved on them from the estate of deceased defendant No. 2.

(16) The suit stands decreed with costs as aforesaid.