Syndicate Bank vs Begum International And Ors.
1997 Latest Caselaw 875 Del

JUDGMENT

S.N. Kapoor, J.

(1) Syndicate Bank, Asaf Ali Road, has filed a suit for recovery of Rs. 5,42,314.31p. through its Chief Manager and Principal Officer Sh. K.G.P. Pillai. He also claims to be duly constituted attorney of the plaintiff Bank and titled to institute the suit. He is the person who has signed and verified the plaint. I.I. M/s. Begum International, a partnership firm comprising of two partners, namely, S. Krishna Sharma and S. Ravi, availed credit facilities under the following three heads:

(a) Packing Credit limit 4/81 dated 29.5.1981 with a limit of Rs. 50,000.00 . (b) Over-draft against hypothecation Odh 56/81 dated 16.9.81 for Rs. 2,00,000.00 . (e) Packing Credit Limit 6/81 dated 4.11.1981 for Rs. 50,000.00 .

1.2. Both the partners in consideration of and to secure repayment of the Packing Credit limit 4/81 executed an Export Credit Agreement, a Demand Promissory Note for a sum of Rs. 50,000.00 and a Letter of Guarantee on 29th May, 19981. They availed the entire amount of Rs. 50,000.00 . On 20th April, 1984, the two partners executed acknowledgement of debt on behalf of defendant No. 1 to the extentofRs.43,253.30p.undertheplaintiffcreditlimit.On31stAugust,1985,asum of Rs. 44,633.75p. was due.

1.3. In addition to above said amount, the defendants availed Over-draft facility on 19th September, 1981 against hypothecation with a limit upto Rs. 2,00,000.00 and in order to secure the repayment, the defendant executed, (a) letter of request for an overdraft limit upto two lakhs, (b) a Demand Promissory Note for a sum of Rs. 2,00,000.00 with interest at the rate of 9.5% above the Reserve Bank of India rates with a minimum of 19.5% per annum compounded quarterly for the value received; (e) letter to pay over-due interest dated 16.9.81 wherein the defendants waived the notice of variation of rate of interest from time to time as per the directions of Reserve Bank of India; (d) deed of hypothecation of stock in trade consisting of handicrafts, batik paintings, entire raw-materials, finished goods and semi-finished goods lying at D-38, Panchsheel Enclave, New Delhi or lying with the fabricators in terms of the Deed of Hypothecation; and (e) letter of personal guarantee to the extent of Rs. 6,50,000.00 was also given by the two defendants. The defendants deposited cash Rs. 5,000.00 on 14th June, 1983, Rs. 100.00 on 24th September, 1983, Rs. 15,000.00 on 15th November, 1983. The defendants availed the said facility but failed to maintain the regular financial discipline stipulated and agreed to between the plaintiff and the defendants. A sum of Rs. 4,62,294.26 was said to be due on 31st July, 1985.

1.4. On 4th November, 1981, defendant No. 1 also took another Packing Credit facility for a amount of Rs. 50,000.00 and executed (a) Export Credit Agreement; (b) Demand Promissory Note with interest at the rate of 2.5% per annum above the Reserve Bank of India rate with a minimum of 10% compounded quarterly for the value received; and (e) Letter of Guarantee. On 30th October, 1984, the defendants executed the acknowledgement of debt in writing by the defendants and defendant Nos. 2 and 3 acknowledged their liability to the extent of Rs. 50,000.00 alongwith interestfrom4.11.1981to3.10.1984.Ason31stAugustl981asumofRs.72,463.30p. was found payable by the defendants.

1.5. The defendants fully utilised the three facilities and as on 31.8.1985 a sum of Rs. 5,42,314.31p.was due from the defendants, including the interest. The defendants failed to repay the amounts in terms of the agreements despite demand and service of notices. Consequently, present suit has been filed for recovery Rs. 5,42,314.31p. with future interest at the rate of 18% from 1st September, 1985 onwards.

(2) The defendants have contested the suit inter alia on the-ground that the suit has neither been signed nor verified nor filed by duly authorised person. It has been denied that K.G.P. Pillai is Principal Officer and Chief Manager of the plaintiff Bank at its Asaf Ali branch and duly constituted attorney. It has been denied that any Over-draft facility and any Packing Credit facility as detailed in para 'C' of para- 4 was asked for by the defendants. It is also denied that defendant No. 1 has executed any documents through any alleged guarantors. It has further been denied that defendant No. 1 has executed any documents or promissory note as has been stated in para 5. Similar denial has been made in respect acknowledgements. It is further denied that transaction between the parties was a commercial transaction. It is claimed that defendant No. 1 had taken some loan from the plaintiff Bank for the purpose of establishing advancement of cottage industry in the country in the shape of batik prints and batik paintings and as per the Reserve Bank of India regulations, the Bank cannot charge interest more than the simple interest of 11% per annum. The bank has with malafide intentions and wrongly tried to charge interest over and above that rate.

(3) The plaintiff Bank has filed replication reiterating its case and alongwith allegations made in the written statement.

(4) On the pleading of the parties, following issues were framed:

1. Whether the plaint has been signed, verified and the suit instituted by a duly authorised person? 2. Whether the defendant signed blank documents as alleged? 3. At what rate the plaintiff is entitled to charge interest? 4. To what amount, if any, the plaintiff is entitled to and from whom? 5. Relief.

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Finding on Issue No. 1 5.1. As has been seen earlier, defendants are contending that the plaint has neither been signed nor the suit has been instituted by duly authorised person. In this regard, while the learned Counsel for the plaintiff relied upon United Bank of India v. Naresh Kumar & Ors., 1996(7) Supreme 301, learned Counsel for the defendant referred to the various parts of the statement of the plaintiffs witnesses to establish the point in support of his contention.

5.2 From the statement of Public Witness PW2 K. K. Bagga, it appears that Shri K.G. Fillai was the Chief Manager and Principal Officer of the plaintiff Bank of Asaf Ali Road Branch. He had seen Shri Pillai writing and signing as he had worked under him and he claims that the plaint is signed and verified by Mr. Pillai. He also identified the Original Resolution and the original Power of Attorney in favour of Mr. Pillai. The copy of the Power of attorney has been exhibited as Ex.PW2/l and copies of the Board Resolutions are Ex.PW2/2 and Public Witness PW2/3. He also identified the signatures of S. Sita Ram and U.P. Seth thereon. However, from his cross-examination, it appears that he had neither seen the original Minutes Book nor notes of the meetings. Furthermore, he had never worked with him nor had he ever seen S. Sitaram writing and signing. In this regard, it is desirable to reproduce some questions put to the witness, which read as under : Q.23. Your statement regarding identifying the signatures of these persons base only upon the fact that the papers which were received through proper channel purports to be signed by these persons. Ans. Yes. Q.24.I put it to you that this power of attorney is not signed by these persons? Ans. These are signed by S. Sita Ram and U.P. Seth. I identify their signatures.

5.3. He denied the suggestion that Mr. Pillai was not connected with this branch of the Bank during the entire period from 1978 to 1986 or at the time of filing of the suit. It also appears that though he did not know the whereabouts of Mr. Pillai but the Zonal Officer of the bank knew it.

5.4. It is apparent from the suggestion in question Nos. 23 and 24 that at least two things are not disputed : First, that S. Sita Ram and U.P. Seth were the Directors of the plaintiff Bank and the witness Public Witness PW2 K.K. Bagga was making statement only upon the fact that the papers which were received through proper channel purporting to be signed by these persons and he identified the signatures of these two persons. The Power of Attorney Ex.PW2/1 was executed before a Notary Public. The question is whether any presumption can be raised under Section 114 of the Evidence Act that this Power of Attorney would have been executed by the two Directors only after having been authorised by the two resolutions, copies of which have been produced as Ex. PW2/2 and Public Witness PW2/3.

5.5. In this context, it is worthwhile to refer to Section 114 of the Evidence Act, which reads as under : 114. Court may presume existence of certain facts.-The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case.

5.6.I need not mention that Illustration (f) provides that the Court may presume that the common course of business has been followed in particular cases and it applies to course of business followed in public as well as private business and common course means common experience of the Judges.

5.7.But before raising such presumption, it is required to be seen whether the facts of the case form a fairly solid foundation for a fair presumption in this regard.

5.8.One has to take note of Section 85 of the Evidence Act also. It reads as under: 85. Presumption as to powers of attorney.-The Court shall presume that every document purporting to be a power of attorney, and to have been executed before, and authenticated by a Notary Public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul, or representative of the Central Government, was so executed and authenticated. 5.9.Inview of the presumption under Section 85 as well as presumption under Section 114(f) at least Power of Attorney, Ex. Public Witness -2/1 could not be disputed.

5.10.In so far as the Resolutions etc. are concerned, one has to see that apart from this power of attorney, there is no authorisation in favour of Mr. Pillai. If this Power of Attorney is presumed under Section 85 to be a valid and duly executed and authenticated Power of Attorney, then having regard to the presumption under Illustration (f) of Section 114 of the Evidence Act it may also be presumed that copies of the Resolutions which have been received through proper channel in due course of business were also duly passed and the genuineness of those copies should not be allowed to be lightly questioned. In support of his contention about this very point in issue, the learned Counsel for the plaintiff also referred to Order 29 Rule 1, Civil Procedure Code which provides that in a suit by or against a Corporation, the Secretary or any other Principal Officer of the Corporation may depose to the facts of the case and may sign and verify on behalf of the Company. There is a plethora of authorities in support of the contention that the agent of a Bank, a Branch Manager, a Manager of a Law Department of a Bank, have been held "other Principal Officers" of the corporation, who is able to depose to the facts of the case and may sign, and verify the plaint. (See Delhi and London Bank Limited v. A. Oldham & Ors., (1894) 21 Cal. 60 (65) (PC), United Bank of India v. Prabhas Ch. Deb & Ors., , Umesh Chandra Misra v. State Bank of India & Anr., , The Punjab National Bank Ltd. v. Panchsheela Industrial Cooperative Society Ltd. & Ors., Ilr (1979) 1 Delhi 300 (DB), Mis. Kalpaka Shrimp Exports v. Kerala Financial Corporation, Air 90 Kerala 84 (85). The Supreme Court has gone two steps further by making the following observations in United Bank of India v. Naresh Kumar & Ors. (supra).

"9. In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable. 10. ...0rder29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by or against a Corporation, the Secretary or any Director or other Principal Officer of the Corporation who is able to depose to the facts of the case might sign and verify on behalf of the Company. Reading Order 6 Rule 14 together with Order 29 Rule I of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation."

5.11. The following observations in para 10 of the judgment are an eye-opener for those who take too technical a view to defeat substantial justice:

"10. ...In addition thereto and de hors Order 29, Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement or its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by its officer."

5.12. In view of the above observations and taking into consideration the fact that the Power of Attorney had been duly proved in the light of Section 85 Illustration (f) of Section 114 of the Evidence Act and further being other Principal Officer under Order 29, Rule 1, Civil Procedure Code Shri K.G. Pillai could certainly institute, sign and verify the plaint. Issue No. 1, therefore, has to be decided in favour of the plaintiff in this regard, and it is decided accordingly. Finding on Issue No. 2

6.1. In connection with the plea that the defendant signed blank documents, S. Krishnan, the defendant at first instance stated that he did not know as to what was the condition of the documents when he signed the same but at second thought he stated that at that time they were blank. He claims that these documents were signed at his residence when they were brought by some officers of the Bank. He also stated that he had not signed, then he stated that he signed blank papers, then he stated that he did not remember and still further, he said he did not sign. This is the position in examination-in-chief in itself. In cross-examination, he admitted that he never wrote to the bank that they took his signatures on the blank documents. But he gave the reason that he did not do so because there was mutual trust between them.

6.2. As against the above statement of the defendant himself, there is statement of V. Srinivasan, Public Witness PW. 1 who was working in Asaf Ali Road Branch of the Bank from July, 1982 to June, 1982 in Advance Department. He stated as under :

"Pronote dated 29th May, 1981 Ex.P1, Take Delivery Letter dated 29th May, 1981 Ex. P.2, Export Credit Agreement dated 29th May, 1981 Ex. P.3, Pronote dated 16th September, 1981 Ex. P.4, letter dated 16th September, 1981 agreeing - to pay overdue interest Ex. P.5,a letter dated 16th September, 1981 authorising either of the partners to operate the account Ex. P.6, another letter dated 16th September, 1981 declaring that are trading under partnership Ex. P.7, another letter dated 16th September, 1981 requesting for overdraft facility Ex. P.8, a Continuing Security letter dated 16th September, 1981 Ex. P.9 Hypothecation Deed Ex. P.10, a letter dated 16th September, 1981 regarding stocks Ex. P.11, Guarantee Deed dated 16th September Ex.P.I 2, a pronote dated 4th November, 1981 Ex. P.13, Export Credit Agreement dated 4th November, 1981, Ex. P. 14, Guarantee Deed dated 4th November, 1981 Ex. P. 15 another Guarantee letter dated 4th November, 1981, Ex. P.16 were executed by Sri Kishan Sharma and S. Rai, partners of the defendant firm. They were executed in my presence."

6.3. He further submitted that "they were filled up before execution." From his cross-examination, it is apparent that Exs. P.1 to P.16 had been filled up by Mr. W.E. Desouja, an officer handling foreign business transaction and Packing Credit Loans are foreign business transactions. He denied the suggestion that the words which were not applicable to these transactions were not deleted because when the documents were got signed from the defendant, nothing was filled in the documents.

6.4. In view of the evidence mentioned herein before, it is apparent that the onus was on the defendant to prove that when he signed the documents, all these documents were blank. It appears totally illogical to accept the proposition that the documents were signed at the residence of the defendant seeing ordinary course of business of the Banks. Had it been alleged that the loan was granted in a loan mela, the position might have been totally different. No specific reason has been given as to why the documents were required to be signed at the residence of the defendants. Taking into consideration the entire evidence and circumstances and facts, the version of the defendant appears to be highly improbable. Accordingly, this issue has to be decided and is being decided against the defendants. Finding on Issue Nos. 3,4 & 5 All these issues being inter-connected, are being taken up together.

7.1. Public Witness PW.2 K.K. Bagga in regard to the claim of the plaintiff Bank in substance states that acknowledgements of debts dated 20th April, 1984 and 3rd October, 1984 Ex.PW2/4 and Ex.PW2/5 are signed by S. Krishan and S. Ravi respectively. He has also proved copies of the statements of accounts in respect of three heads Ex.PW2/ 6 to Ex.PW2/8. He has also drawn the original cheques withdrawing the amount of the defendants and pay-in-slip showing the deposits by the defendant, he also states that the interest has been correctly claimed. In cross-examination, he stated that the statement of accounts Public Witness PW2/6 and Public Witness PW2/8 have been signed by Mr. N.B. Parikh, the then Manager. When it was suggested that the certificate given on these documents (Ex.PW2/6 and Public Witness PW2/8 were not in accordance with Banker's Books Evidence Act, he firstly states that it is correct and thereafter he states that certificates are in accordance with law. Witness brought the Cash Books also.

7.2. From the statement of the defendant S. Krishan, it appears that the taking of the loan is not being disputed. What is being disputed is the rate of interest. Defendants. Krishan states that the rate of interest was 11 % but he was also assured that because of his helping work/profession of art, the interest would be reduced to 5%. But the defendant, despite there being dispute about the interest, that he never wrote to the bank about the dispute in interest.

7.3. Now, the question in the light of cross-examination of Public Witness PW2 Shri K.K. Bagga is as to whether the documents that are purported to have been proved by the Bank, could be relied upon under the Bankers Books Evidence Act. In this regard. Section 4 of the Bankers Books Evidence Act, 1891 reads as under :

4. Mode of proof of entries in bankers' books.-Subject to the provisions of this Act, a certified copy of any entry in a banker's book shall in all legal proceedings be received as prima fade evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise.

7.4. Before proceeding further, it is required to be seen the definition of the certified copies. Definition of "Certified Copy" as given in Sub-section (8) of Section 2 of the said Act reads as under :

(8) "certified copy" means a copy of any entry in the books of a Bank together with a certificate written at the foot of such copy that it is a true copy of such entry, that such entry is contained in one of the ordinary books of the Bank and was made in the usual and ordinary course of business, and that such books is still in the custody of the Bank and where the copy was obtained by a mechanical or other process which in itself ensured the accuracy of the copy, a further certificate to that effect, but where the book from which such copy was prepared has been destroyed in the usual course of the Bank's business after the date on which the copy had been so prepared, a further certificate to that effect, each such certificate being dated and subscribed by the Principal , Accountant or Manager of the Bank with his name and official title."

7.5. The certificates given on the copies of two accounts Exs. Public Witness PW2/6 and 2/7 relating to Pcl 4/81 and Odh 56/81 (currentaccount) respectively read asunder: Certified as true copy of the ledger as per banker's book of Evidence Act. For Syndicate Bank sd/- Manager Asaf Ali Road, New Delhi

7.6.The certificate given in respect of copy of the account No. Pcl 6/81 is: Certified as true copy For Syndicate Bank sd/- Road, New Delhi --

this regard, a few things are notable. Firstly, there appears substantial compliance of the provisions. At least in respect of Ex. Public Witness PW2/6 and Ex.PW2/7 there is difference of form only for it is specifically mentioned "certified true copy of the ledger as per banker's books of Evidence Act" meaning thereby that the formalities which are required in the definition of "certified copies", have been gone through and thereafter it is being certified. However, in respect ofEx.PW2/8, it has been said to be "certified as true copy" only. It appears that in the last case also, there is substantial compliance but the certificate has not been given in the form in which it is required. Secondly, It is not the case of the defendant that the Statement of Accounts are not correct. He himself has not produced any account. He did not dispute the balance as mentioned in these documents. He only claims dispute about the rate of interest. Thirdly, the defendants vide Ex.PW2/4 dated 20th April, 1984; admitted liability to the extent of Rs. 34,253.30P. and this amount as per Ex.PW2 / 6 exactly comes to the amount mentioned in the Statement of Accounts. Similarly, the defendants acknowledged their liability to the extent of Rs. 50,000/ - to the extent of the limit or the balance, whichever is higher, and the balance in this case is certainly higher for after the withdrawal of Rs. 50,000.00 on 4th November, 1951, nothing has been deposited with the Bank. Fourthly, IT is further required to be seen the exact pleadings of the defendants, specially in view of the fact that it appears from the statement of the defendants that there was dispute of interest only. It may be mentioned that here we are dealing with the defendant who has even denied his signature on any agreement. It is also notable that there is no reply to para 14 of the plaint. Paras 14 to 16 of the plaint reads as under :

14.That on 30.10.84 the defendants executed the acknowledgement of debt in writing whereunder the defendant I represented by defendants 2 and 3 acknowledged their liability to the extent of Rs. 50,000.00 alongwith interest from 4.11.81 to 3.10.1984 in respect of the said limit.

15. That the defendants availed of the said limits Of Rs. 50,000 (Rs. fifty thousand only) and as on 31.8.85 a sum of Rs. 72,463.30 is found from and payable by the defendants to the plaintiff and the said amount includes interest at the rate applicable from time to time.

16. That the defendants fully utilised the aforesaid facilities/liability by withdrawing amount from time to time and as on 31.8.85 a sum of Rs. 5,42,314.31 in all is due from the defendants to the plaintiff which includes interest calculated at the rate applicable from time to time.

7.8. In written statement, the reply to the above-said paras is as under :

"THERE is no para No. 14. 15. Para 15 is wrong and is denied. It is denied that a sum of Rs. 72,463.30 is payable by the defendants to the plaintiff as stated in the para under reply. The allegations in para under reply regarding interest are also,vague. 16. Para 16 is wrong and is denied. It is denied that a sum of Rs. 5,42,314.31 is due from the defendants to the plaintiff as stated in the para under reply. 7.9. In this regard, it is desirable to Mulla's commentary to Rule 4 of Order 8, CPC. It is observed as under : 2. "Except damages."-it is not necessary for a defendant, in a suit for damages, to deny specifically the damages; it is quite sufficient if he pleads generally to the damages (Ross & Co. v. Scriven (1916) 43 Cal. 1001,1010,341 C.235). See notes to Order 6, Rule 2, "Matters affecting damages." 4. [R.S.C., Order 19, Rule 21] Where a defendant denies an allegation of fact in the plaint, he must not do so evasively but answer the point of substance. Thus, if it is alleged that he received a certain sum of money, it shall not be sufficient to deny that he received that particular amount, but he must deny that he received that sum or any part thereof, or else set out how much he received. And if an allegation is made with divers circumstances, it shall not be sufficient to deny it along with those circumstances. Evasive denial.-Where the plaintiff sets up an agreement, and "the defendant denies that the terms of the agreement between himself and the plaintiff were definitely agreed upon as alleged", the denial is evasive. "He [defendant] is bound to deny that any agreement or any terms of arrangement were ever come to, if that is what he means; if he does not mean that, he should say that there were no terms of arrangement come to, except the following terms, and then state what the terms were; otherwise there is no specific denial at all" (Thorp v. Holdsworth (1876) 3 Cd 637,641). Similarly, where the plaint alleges that "the defendant offered to the plaintiff's agent a bribe of Rs. 500 on 17th July, 1908, at the defendant's office," it is an evasive traverse for the defendant to plead "the defendant did not offer to the plaintiff's agent a bribe of Rs. 500 on 17th July, 1908 at his office;" for the defendant might have offered any other sum on another day and in another place. Here, the point of substance is that a bribe was offered. The details as to the amount, time and place are only circumstances. The defendant should plead that he never offered a bribe of Rs. 500.00 or any other sum (Tildesley v. Harper (1878) 10 Cd 393). Where a denial is evasive, leave to amend may be given under Order 6 Rule 17, unless the Court is satisfied that the defendant was acting mala fide (Tildesley v. Harper (1878) 10 Cd 393). When the allegations in the plaint, and in the written statement, are both of them equally general and vague, it cannot be said that there is any admission (Union of India v. P.K. More (1962) Sc 630).

7.10. It is very much apparent that the denial in this case is certainly evasive for the defendant had not replied to para 14 and in so far as the claim of the plaintiff amounting to Rs. 50,000.00 alongwith interest from 4th November, 1981 to 3rd October, 1984 is concerned, there is no denial at all. In so far as the claim of Rs. 72,463.30 is concerned, the denial is certainly evasive for it is not the case of the plaintiff that he had never taken any loan and in case he has taken die loan, then he does not state to clarify that not this amount but certain other amount was due. Since it is the case of the plaintiff that this amount of Rs. 72,463.30 inclusive of interest of the rate applicable from time to time was due and the reply not being of point of substance but of only form, has to be termed as evasive denial and the same is true about contents of para 16.

7.11.Before proceeding further, it is also required to be seen as to what was the rate of interest. So far as the Pronote Ex.P1 is concerned, it does not specify any rate of interest. However, Ex.P.1 just simply say "with interest at.....per cent per annum above the Reserve Bank of India Rate with a minimum of .......per cent per annum compounded monthly/quarterly for value received." Ex.P.3, the Export Credit Agreement in its third schedule mentions about the rate of interest as "rate of interest as applicable from time to time as per guidelines". In the promissory note dated 16th September, 1981, it is specified at "9.5% per annum above the Reserve Bank of India with a minimum of 19.5% per annum compounded monthly/ quarterly for value received". In Ex.P.10 the defendants agree to pay interest at the rate of 9.5% above the Reserve Bank of India rates subject to minimum of 19.5% per annum or such other rate as may be fixed by the Bank from time to time. In Ex.P.13 dated 28th May, 1981, the rate of interest is mentioned 2.5% per annum above the Reserve Bank of India Rate with a minimum of 10 percent per annum compounded monthly/quarterly for value received. In Ex. P.14 dated 4th November, 1981, the Export Credit Agreement, again it is mentioned rate of interest as per Rbi guidelines from time to time applicable. Thus, it appears that the rate of interest could not be less than 12.5% per annum, so far as the two accounts relating to two Export Credit Agreements Exs. P.3 and P.14 are concerned, in terms of P. 13, the interest is to be compounded quarterly. The fact that the rate of interest is not mentioned and left blank in Ex. P.1 and the fact that it has not been filled up even at a later stage and still further that neither the "monthly" nor "quarterly" has been deleted, would only mean that the bank officials were certainly not interested in filling up the blanks which had been left. In such circumstances, so far as the two Export Credit Agreements are concerned, it has to be held that the plaintiffs are entitled to interest with quarterly rests at the rate of 12.5% per annum, this being the most beneficial interpretation in law of the defendant borrower.

7.12. In so far as the account relating to overdraft facility is concerned, Agreement Ex. P10 definitely indicates that the interest would be charged at the rate of 9.5% per annum or such other Bank rate, as has been fixed from time to time calculated on the chart of daily balance. It does not appear from the statement of Ex. Public Witness PW2/6 that the interest has been charged in Pcl Account No. 4/81 at the rate of 12.5%. Consequently, so far as the Pcl Account No. 4/81 is concerned, it has to be held that the plaintiffs are entitled to recover Rs. 44,633.75p. in regard to overdraft account No. 56/81 also, it does not appear that interest had been charged over and above the interest rate claimed and it appears that the plaintiffs are entitled to recover R.4,62,294.26p. Similarly, in Pcl Account No. 681, the interest has been charged accordingly in terms of the agreement between the parties and a sum of Rs. 72,433.30 has become due. In view of the acknowledgement made, so far as the Pcl Account No. 4/81 and Account No. Pcl 6/81 are concerned, in view of the acknowledgements Ex.PW24 and Ex.PW25, claim is not barred by time.

7.13. Accordingly, all the three Issues No. 3,4 and 5 are decided in favour of the plaintiff and against the defendants.

7.14. Accordingly, the plaintiffs are entitled to a decree for Rs. 5,42,314.31 p. with future interest at the rate of 18% per annum from 1st September, 1985 with costs of the suit from the defendants and the defendants No. 2 & 3, both being responsible as principals being partners of the defendants No. 1 as well as guarantors.