Bank Of India vs Jogesh Kumar Sethi & Others
1997 Latest Caselaw 946 Del

ORDER

Vijender Jain, J.

1. Defendant no.1 approached the plaintiff bank for grant of financial facilities. The request of defendant no.1 was considered and acceding to his request he was granted a Cash Credit (Hypothecation of Stocks) facility with a limit of s.1,40,000/- on 29.4.1986 with interest thereon at the rate of 6.5% OBR minimum 16.5% per annum with quarterly rests. The said limit at the request of defendant was enhanced by a sum of Rs.90,000/- on 10.12.1986 thereby bringing the total limit to Rs.2,30,000/-. Following documents were executed in favour of the plaintiff by defendant no.1 on 10.12.86 :-

(a) Demand Promissory Note for a sum of Rs.2,30,000/-,

(b) Continuing Security letter,

(c) Letter of Lien and Set Off,

(d) Authority letter to debit miscellaneous charges such as insurance, inspection charges etc.,

(e) Bearer letter and

(f) An agreement of Hypothecation of tangible movable property.

2. These documents are Ex.PW 1/2 to PW 1/7. For the said facility, defendant nos.2 and 3 executed in favour and delivered to the plaintiff bank a letter of continuing guarantee. Defendants 2 and 3 further agreed that the plaintiff bank could, at its liberty, treat them as principal debtors. The guarantee letter is Ex.PW 1/8.

3. The limit of cash credit facility was further enhanced by Rs.1,30,000/- on 15.4.1987 and documents were executed by defendant no.1 in favour of the plaintiff. The same are Ex.PW 1/9 to PW 1/12. In consideration and enhancement of the limit in cash credit limit by an additional amount of Rs.1,30,000/-, defendant nos.2 and 3 further executed and delivered to the plaintiff on 15.4.1987 letter of continuing guarantee. The same is Ex.PW 1/13. Defendant no.3 on 22.9.1987 deposited with the plaintiff bank title-deed of her property i.e. 44, Mahila Colony, Gandhi Nagar, Delhi with an intention to create an equitable mortgage in favour of the plaintiff bank on the said property. The said equitable mortgage was a security for the plaintiff bank for realisation of the entire limit of Rs.3,60,000/- along with cost, interest and other charges.

4. It is the case of the plaintiff that defendant no.1 was approached on various occasions but he has failed to pay the amount due in his account. Legal notices sent to the defendant have also failed to evoke any response. The copies of the legal notices are Ex.PW 1/15 and PW 1/16 and postal receipts are Ex.PW 1/17 (collectively). The defendants have acknowledged the debts and securities due to the plaintiff in writing and under their signatures on 7.2.89. The amount acknowledged on the aforesaid date is Rs.3,97,164.43 paise. On the date of filing of the suit, the amount was Rs.5,32,798.90 paise as per the account maintained by the plaintiff bank. The statement of account is Ex.PW 1/10.

5. In this matter issues were framed on 23.2.1994 and on that date, it was directed by the Court that defendant no.1 will remain present on 4.5.94 for recording his statement under Order 10 Rule 2 of the CPC. On 4.5.94 the statement of defendant no.1 was recorded under Order 10 Rule 2 CPC. Defendant no.1 admitted to have borrowed a sum of Rs.2,30,000/- from the plaintiff bank in all for running a poultry farm. He also admitted that he suffered losses in the business on account of lack and proper additional financing from the bank. Thereafter defendant did not appear in the matter nor took any steps to produce the witnesses on the date of trial. In the circumstances, on 4.12.96, the defendants were proceeded ex parte. In support of its case, the plaintiff has filed the affidavit of Kartar Singh, Staff Officer of the plaintiff bank. He also deposed that he has dealt with the account of defendant no.1 during the period of his posting in the Connaught Circus Branch of the bank from 1981 to 1988. He also deposed that he was acquainted with the signatures of Sukumaran Nair, Constituted Attorney of the plaintiff bank as he had seen him writing and signing. There is no evidence to rebut the evidence filed by the plaintiff. Even in the statement recorded on 4.5.94, the defendant no.1 categorically states that he had borrowed a sum of Rs.2,30,000/-. No other evidence has come from the side of the defendant.

6. In the circumstances, I pass decree of recovery of Rs.5,32,798.90 paise against the defendants jointly and severally. I grant interest pendente lite as well as future interest till realisation of the decretal amount at the rate of 16% per annum. In the event of non-realization of the decree, a preliminary decree under Order 34 Rule 4 CPC in favour of the plaintiff and against defendant no.3 is passed for realisation of the amount under decree by way of sale or otherwise of the mortgaged property. If the net sale proceeds of the mortgaged property are insufficient to pay the debts of the plaintiff bank, then a decree of the balance amount is also passed against the efendants.

Suit is decreed in terms of the above order, with cost.