Corporation Bank vs M/S. Venus Traders & Others
1999 Latest Caselaw 1022 Del

ORDER

Vikramajit Sen, J.

1. Corporation Bank has filed a suit for recovery of Rs. 5,11,162.50 Paise with interest and costs against M/s. Venus Traders (Defendant No.1) a partnership firm of which Shri Subodh Gupta, (Defendant No. 2) since deceased, and his mother Smt. Suman Gupta Defendant No. 3 were parters. Shri Ramesh Garg, Defendant No. 4 is imp leaded as the Guarantor. It is alleged in the Plaint that the Plaintiff Bank had acceded to the Defendants' request for a Cash Credit (hypothecation) limit of Rs. 3,00,000/- (Rs. Three Lakhs only) to Defendent No.1, through Defendants 2 and 3 as its parteners and guarantors. The sum of Rs. 3,00,000/- is stated to have been disbursed by the Defendant No. 1.

2. Written Statement was filed and on the basis of them pleadings the following issues were framed:

1. Whether the suit has been duly signed, verified and instituted by the Plaintiff?

2. Whether the suit is barred by limitation?

3. Whether the Defendant signed various blank documents, if so, to what effect?

4. Whether Plaintiff is entitled to any amount, if so, what amount and from which defendants?

5. Whether Plaintiff is entitled to interest. If so at what rate?

6. Relief.

3. Subsequently on 18.3.1998 learned counsel for the parties agreed that the case may be disposed of by filing affidavits and, accordingly, the Plaintiff was directed to lead evidence by way of affidavit within four weeks. The Defendants were allowed to file counter, affidavit within eight weeks. No affidavit has been filed by Defendant No. 3 despite several opportunities. On 8.7.1999 the Plaintiff's witness Shri P. K. Gupta, the Deponent in the affidavit by way of evidence, was present in court having come to Delhi from Ahmadabad. Liberty to cross-examine him was not availed of. On the subsequent date i.e. 4.10.1999, there was no appearance on behalf of the Defendants and they were proceeded ex-parte. I, therefore, heard arguments.

4. Shri V. K. Gupta has deposed that Mr. B. Venkatraman has signed the Plaint and that he was the power of attorney holder of the Plaintiff Bank. The Power of Attorney is Ex. P-18. The Plaint states that Shri B. Venkatraman is the Senior Manager and Principal Officer of the Plaintiff Bank. There is no evidence in controverting this statement. Issue No. 1 is decided in favour of the Plaintiff.

5. The Cash Credit (Hypothecation) Limit of Rs. 3,00,000/- was availed of by the Defendants with effect from 26th November, 1986. The Loan Application (Ex. P-2), Promissory Note (Ex. P-4), Hypothecation Deed (Ex. P-5) among other documents, were executed by the Defendants on 4.12.1986. Ex. P-10 and P-11 are the "Acknowledgement of Defendant" and dated 8.3.1989, that is within the period of limitation even if computed with effect from 26.11.1986. The effect of these documents would be the extension of limitation upto 7.3.1992. The Plaint was filed on 23.5.1991 and is therefore clearly within time. This issue is decided in favour of the Plaintiff and against the Defendants.

Issue No. 3:

6. No evidence has been lead by the Defendants in support of these allegations that they signed various blank documents. There is, on the other hand, the unrebutted testimony of the Plaintiff's witness to the effect that the sundry documents were executed by the Defendants, and these documents mention the amount of Rs. Three Lakhs and the interest chargeable thereon. Accordingly this issue is decided against the Defendants.

Issue No. 4:

7. Shri V. K. Gupta has deposed that cash credit hypothecation limit of Rs. 3 lakhs (Rs. Three Lakhs only) was allowed to the first Defendant and was utilised in its Cash Credit Account No. 276, and that as a result of all the credits and debits, including interest debited upto 31.3.1990, there was a debit balance of Rs. 4,08,655,36 (Rs. Four lakhs Eight thousand Six hundred Fifty five and Thirty Six paise only), and in addition thereto, interest at the agreed rate of 20.5% amounting to Rs. 1,02,507.14 (Rs. One lakh Two thousand five hundred Seven and Fourteen paise only) was due upto 22.5.1991. These amounts are also reflected in the Statement of Account (Ex.P-17), duly certified under the Bankers Book Evidence Act. The Credit Hypothecation facility was availed of by Defendant No. 1 firm, of which Defendants 2 and 3 were the partners at the material time. Since there is no evidence that these partners had agreed between themselves to share the profits and losses in any particular ratio, their liability is joint and coextensive. In any event, both Defendants 2 and 3 have also executed the various documents for the firm as well as on their own behalfs. Defendant No. 4 has stood as a Guarantor. I hold that a sum of Rs. 5,11,162.50 (Rs. Five lakhs Eleven Thousand One hundred Sixty Two and Fifty paise only) was due and payable by the Defendants to the Plaintiff as on the date of the filing of the suit, i.e. 23.5.1991.

Issue No. 5:

8. Ex. P-2, P-4, P-5 and P-6 mention that interest would be chargeable at the minimum rate of 17.5 per cent, and upto 7.5 per cent above the R.B.I. rate. Overdue interest at the rate of 2% per annum above the aforementioned rate with quarterly rests had also been agreed upon. The Bank's witness has also deposed to this effect. A similar demand was also made in the legal notice Dated 24.7.1989 (Ex.P-13) which has not been controverted. I hold that the Defendants are liable to pay interest @ 20.5% was quarterly rests.

Issue No. 6:

9. I pass a decree in favour of the Plaintiff and against the Defendants jointly and severally for a sum of Rs. 5,11,162.50 (Rs. Five lakh Eleven thousand One hundred Sixty two and Fifty paise only). However, I award pendente lite and future interest at the rate of 18% per annum. The Plaintiff will also be entitled to costs.

10. Decree sheet be drawn up accordingly.