Punjab National Bank vs M/S. J.P. Gupta & Co. & Ors.
2000 Latest Caselaw 875 Del

ORDER

Mukul Mudgal, J.

1. This suit, filed on behalf of the plaintiff-Bank, seeks recovery of Rs.8,57,601.50/- along with pendente lite & future interest. The defendant No.1 is the proprietor concern of defendant No.2 and defendant No.3 is the Guarantor & also the mortgagor for the loan sanctioned to defendant No.1. The defendants were duly served but did not enter appearance and by the Order of this Court dated 22nd January, 1997, the defendants have been proceeded ex-parte.

2. The plaintiff-Bank is a body corporate, constituted under the Banking Companies Act 5, 1970. The plaint is duly signed and verified by Shri Kewal Krishan Malhotra, Manager of the plaintiff-Bank, who is duly authorised to sign and verify the plaint on behalf of the plaintiff-Bank.

3. The suit arises from the claim towards providing Cash Credit (BD) Facility of Rs.2 lacs, Bank Guarantee Facility of Rs.4 lacs and Term Loan of Rs.1.60 lacs to defendant No.1 In order to avail the Term Loan of Rs.1,60,000/-, the defendant No.1 through defendant No.2 has executed the Term Loan Agreement on 23.10.1987 and had agreed to hypothecate three wire drawing machine with motor and starter of 16 to 25 SWG, 20 to 28 SWG, 20 to 25 SWG, 16 SWG to 28 SWG of 13x2 each. It is averred that defendant No.1 has also agreed to pay the aforesaid loan by monthly installment of Rs.2,700/- alongwith interest @ 3.5% per annum over R.B.I. rate with a minimum of 13.5% per annum and has also executed the Cash Credit (H) Agreement for Rs.2 lacs on 23.10.1987. It is also averred on behalf of the plaintiff-Bank that in consideration of these facilities sanctioned to defendant No.1, defendant No.3 stood as Guarantor vide Agreement of Guarantee on 14.3.88 and on 14.3.88 has also created equitable mortgage in respect of his property, bearing No. Plot No.16, Block No.8 measuring 200 sq. yds., out of Khasra No.178, Min., situated in the area of Village Karkardooma, Vishwas Nagar, Shahdara, Delhi-110 032 in favour of the plaintiff- Bank. A Supplementary Agreement was also signed by defendant No.3 on 15.12.1989 for letter of guarantee of Rs.4 lacs, availed by defendant No.1. On 16.3.1988, Defendant No.3 has deposited the original Sale Deed in respect of the aforesaid property with the plaintiff-Bank.

4. The plaintiff's case is that on 24.3.1990 at the request of defendant No.1 through defendant No. 2 the Cash Credit (H) Limit was enhanced from Rs. 2 lacs to Rs.6 lacs and thereafter on 28.5.92 it was further enhanced from Rs. 6 lacs to Rs.10 lacs upon signing the Agreement on 24.3.1990 and 28.5.1992. In addition to the above, the plaintiff avers that defendant No.1 has also availed the book debts for Rs. 2 lacs and to this effect, defendant No.1 through defendant No.2 has signed the Agreement of Hypothe- cation of books debts on 28.5.1992 and has agreed to pay interest in B.D.(H) @ 10.75 over RBI rates with a minimum of 22.25% and has also agreed to abide the terms of book debts hypothecation agreement dated 28.5.92.

5. It is the plaintiff's case that in order to avail the Bank Guarantee Facility of Rs.4 lacs, defendant No.1 has signed the Counter Indemnity Agreement on 15.12.1989 and undertook his liability to repay the same. However, the defendant No.1 failed to pay the guarantee amount to the Commissioner, Income-Tax, Delhi (Bank Guarantee was invoked on 2.2.1994 in favour of the Commissioner, Income-tax, Delhi) and hence the plaintiff-Bank had paid the amount of Rs.4 lacs to Commissioner, Income-tax, Delhi as per the Agreement and the said amount is recoverable from defendant No.1. The defendant No. 3 has stood as Guarantor for the said Loan Guarantee Facility of Rs.4 lacs, secured by defendant No.1 and to this effect has signed the Agreement of Guarantee on 15.12.1989 and has also written a letter of continuity on 15.12.1989, acknowledging the deposit of Title Deed in respect of his aforementioned immovable property for creating equitable mortgage with the plaintiff-bank for which the Title Deed was deposited by defendant No.3 with the plaintiff-Bank on 13.3.1988.

6. It is the plaintiff's case that after availing the aforesaid loan facilities, defendant No.1 has failed to adhere the financial discipline and has not deposited regular monthly installments in his term loan account despite the plaintiff's repeated requests, reminders and personal visits to the defendants for clearing the aforesaid loan account of defendant No.1. However, defendant No.1 through defendant No.2 has acknowledged the loan amount and admitted the same by signing the balance and security confirmation letter on 16.3.89, 24.3.90, 9.5.91, 4.4.92 & 24.4.93. Thereafter the plaintiff-Bank sent Legal Notices dated 4.1.93, 24.5.93 and 27.12.93 respectively through its counsel, Shri S.K. Pruthi and Shri Ashok Kumar, Advocates, which were duly acknowledged by defendant No.1 but defendant No.1 has failed to make the payment due and outstanding against him. Hence the plaintiff has filed the present suit. On the date of filing of the suit, the total sum of Rs.8,57,601.50 and outstanding against defendant No.1.

7. The defendants had not put in their appearance despite service. Accordingly, the defendants were proceeded ex-parte by Order dated 22nd January, 1997 and the plaintiff-Bank was directed to file ex-parte evidence by way of affidavit. On 1st of November, 1999, the plaintiff-Bank has filed evidence by way of affidavits of Mr. K.K. Malhotra, Mr. S.P. Dixit & Mr. S.K. Pandit(Exs.PW-1,2 & 3), officers of the plaintiff-Bank to prove its case. The averments made in the plaint have been supported by the aforesaid affidavits.

8. The plaintiff-Bank has filed the following documents to prove its case:-

      Sl.  Description            Exhibit Nos.
     Nos.
     1.   Affidavit of Shri K.K. Malhotra         PW-1
     2.   General Power of Attorney               PW-1/1
     3.   Letter for Guarantee                    PW-1/2
     4.   Letter relating to Bank Guarantee       PW-1/3 to PW-1/4
     5.   Statement of Accounts                   PW-1/5 to PW-1/9
     6.   Legal Notice of Demand                  PW-1/10
     7.   Postal Receipts                         PW-1/11 to PW-1/12
     8.   Affidavit of Shri S.P.Dixit             PW-2
     9.   Sanction Letter dt. 22.3.1990           PW-2/1
     10.  Sanction Letter dt. 7.10.1989           PW-2/2
     11.  Counter Indemnity                       PW-2/3
     12.  Agreement of Guarantee dt. 15.12.89     PW-2/4
     13.  Letter of Continuity dt. 15.12.89       PW-2/5
     14.  Letter of Acknowledgment                PW-2/6
     15.  Affidavit of Shri S.K. Pandit           PW-3
     16.  Loan Application dt.15.12.92            PW-3/1
     17.  Sanction Letter dt.27.5.92              PW-3/2
     18.  Term Loan Agreement dt.28.5.92          PW-3/3
     19.  Account Opening Form dt. 28.5.92        PW-3/4
     20.  Hypothecation Agreement for Book   
        Debt for Rs.2 lacs dt.28.5.92           PW-3/5
     21.  Letter of Acknowledgment of Term Loan 
        & Book Debt PW-3/6 to                   PW-3/7
     22.  Letters dt.28.5.1992                    PW-3/8 to PW-3/9
     23.  Agreement of Guarantee dt. 28.5.92      PW-3/10
     24.  Letter dt.23.2.91 for extension of B/G  PW-3/11
     25.  Plaintiff's Letter dt. 28.5.91          PW-3/12
     26.  Letters of Continuity dt. 28.5.92       PW-3/13 to PW-3/15

 

9. By its affidavit of evidence and the documents exhibited, the plaintiff-Bank has proved the averments made in the plaint. There is no rebuttal of these pleas.

10. Accordingly, the plaintiff-Bank is entitled to a decree with costs. The suit is decreed with costs as prayed. A decree is passed in favour of the plaintiff-Bank and against the defendants in the sum of Rs. 8,57,601.50/-. The defendants jointly and severally are also directed to pay pendente lite and future interest @ 22.25% per cent on the suit amount of Rs. 8,57,601,50/- from the date of the filing of suit, i.e. 24th May, 1995 till realization & a further interest @ 12% per cent per annum from the date of decree till the date of realization as the suit arises from a commercial transaction. The plaintiff-Bank shall be entitled to costs. This amount be paid within six months from today.

11. It is further directed that if the amount due as per this judgment is not paid by the defendants in terms of the preliminary decree within six months from today, the plaintiff-Bank shall be entitled to apply for a final decree against the defendants for the sale of hypothecated goods, i.e., Wire Drawing Machine with Motor & Starter of 16 to 25 SWG, 20 to 28 SWG, 20 to 25 SWG, 16 SWG to 28 SWG of 13x2 each and also for the sale of mortgaged property bearing Plot No.16, Block No. 8, measuring 200 sq. yds. out of Khasra No.178, Min., situated in area of Village Karkardooma, Vish- was Nagar, Shahdara, Delhi. The proceeds of sale after the adjustment of the sale expenses be deposited in this Court and applied in payment of the dues to the plaintiff-Bank with interest, costs as well as subsequent costs, charges, interest etc, within six weeks from the date of such deposit. It is further ordered in case the sale proceeds do not satisfy the full decretal amount, the defendants shall nevertheless be jointly and severally liable for the balance decretal amount.

Decree sheet be drawn up accordingly.

The suit is accordingly disposed of.