Dena Bank vs Shri Pramod Kumar & Others
2001 Latest Caselaw 589 Del

ORDER

A.K. Sikri, J.

1. The suit has been filed by the plaintiff-Bank for recovery of Rs. 8,34,632.50 along with interest and cost. It is averred in the plaint that the plaintiff is a body constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 with Head Office at Cuffe Parade, Bombay and one of the branch office at 'Goverdhan', Nehru Place, New Delhi. Shri Ramgopal Harikishanji Khandelwal is the Branch Manager and General Attorney of the plaintiff-Bank, who is fully conversant with the facts and circumstances of the case and is authorised to do all acts on behalf of the Bank. Defendant no.1 is the sole proprietor of M/s. Kaveri Industries, who approached the plaintiff-Bank in mid-June, 1978 for grant of various credit facilities.

2. Defendant 2 and 3 offered securities for due payment Defendants 2 and 3 offered securities for due payment of the credit facilities to be granted by the plaintiff. After examining the proposal of the defendants and their financial status, the plaintiff-Bank agreed to advance credit and sanctioned three credit facilities, i.e. Rs. 1,50,000/- against hypothecation of raw materials, stock-in-trade, etc. and term loan of Rs. 1,75,000/- against hypothecation of machineries already existing and to be purchased and of Rs. 70,000/- for bill purchase. On 16th June, 1978 the defendants executed following documents in respect of the two credit facilities i.e. the cash credit facility against hypothecation of stock and term loan against hypothecation of machineries :-

i. Demand Promissory Note of Rs. 1,50,000/-;

ii. Demand Promissory Note for Rs. 1,75,000/-;

iii. Ketter treating the Demand Promissory Note of Rs. 1,50,000/- as continuing security;

iv. Agreement of hypothecation of goods.

3. The defendants 2 and 3 on 16th June, 1978 also executed separate Deeds of Guarantee in respect of the loans to be advanced and they further assured to the plaintiff-Bank that they would be personally liable as guarantors also to get the amount adjusted in the event of committing default by the defendant no.1. After ten days, i.e. 26th June, 1978 the defendant no. 1 also by executing term loan agreement against hypothecation of plant and machinery and equipments existing as well as to be purchased in future hypothecated them with the plaintiff-Bank.

4. The defendant no.1 placed orders for purchase of machineries on various parties and submitted their bills and invoices and assured the Bank that he had paid the margin money. On this assurance the plaintiff-bank made payment, directed to suppliers in 1978 against credit facilities for purchase of machineries. As per the sanctioned letter the defendant no.1 was required to refund the amount after six months of the installation machineries within a period of five years in equal quarterly Installments of Rs. 8,750/- each. It is stated in the plaint that on or about, 16th April, 1979 the defendant informed that he wants to purchase new machinery from M/s. M. Khanna and Company and paid the margin money. Accordingly, a sum of Rs. 80,900/- was paid directly to M/s. M.Khanna and Company on 23rd April, 1979. As on 16th January, 1981 when the defendant applied for enhancement of credit facilities, sums of Rs.1,67,000/- and Rs. 1,12,000/- were outstanding in the two credit facilities. At request of other defendants, the defendants no. 1 was allowed to avail the limit of Rs.1,75,000/- instead of Rs.1,50,000/- and a temporary limit of Rs.25,000/- was sanctioned. On or about 24th November, 1983 the defendants were requested to deposit the outstanding amount. As they have failed to pay the amount and on their expressing financial inability to pay the amount, they agreed to review the document and accordingly executed fresh document on 1st December, 1983 The defendant no.1 acknowledged its entire liability as on 28th November, 1986 and executed a Demand Promissory Note in favor of the plaintiff-Bank and also placed the same as continuing security. Defendant no.2 also executed a fresh Deed of guarantee on 28th November, 1986 guaranteeing the repayment of the outstanding dues of the plaintiff-bank. It is further averred in the plaint that inspite of repeated requests, the defendants have failed to pay the amount and letters sent to them are received back with the remarks that the letters have been refused. The plaintiff-bank was thus left with no alternative except to file the present suit.

5. Defendants were served through publication. However, nobody appeared on behalf of the defendants and accordingly by Order dated 6th October, 1998, the defendants were proceeded ex-parte. The plaintiff was allowed to lead ex-parte evidence by means of affidavits.

6. The plaintiff-bank has filed affidavit of Shri Rajesh Sehgal as P.w. -1 and that of Shri T. C. Arora as P.W.-2. Shri Rajesh Sehgal has stated that he worked with the plaintiff-bank at its Branch Office, Nehru Place from April 1978 to June 1988 and dealt with the account of the defendants. He has deposed about the various credit facilities granted to the defendant no.1. He has also proved the loan document executed by the defendant as Exh.PW.1/1 to PW.1/5/ He has also proved the document of guarantee executed by the defendants 2 and 3, being Exh. PW 1/6 and PW. 1/7. He has further stated that the defendants had agreed to pay interest @ 14% per annum on cash credit facility and 11% per annum on term loan facility with quarterly rests. He has further deposed that the defendant no.1 visited the Office of the plaintiff-bank on 31st December, 1981 and 21st August, 1983 and acknowledged the liability by signing the balance (confirmation letters being Exh. PW. 1/8 to PW. 1/11). He has identified the signatures of the defendants on this balance confirmation letters which were executed in his presence. Loan document executed on 1st May, 1983 are proved as Exh. PW. 1/12 and PW. 1/14. Shri T.C. Arora, P.W.-2 has testified to the effect that Shri Ramgopal Harikishan ji Kandelwal, then Branch Manager/Principal Officer of the plaintiff-Bank who signed and verified the plaint, was duly authorised to do so. Power of attorney duly notarised and executed in his favor by the Bank has been proved as Exh. PW. 2/1. He has further stated to the effect that on 28th November, 1986, the defendants 1 and 2 visited the Office of the plaintiff-bank and executed fresh demand promissory note as well as letter of guarantee which are proved as Exh. PW. 2/1 to PW. 2/3. It is further stated that as per the statement of account, Exh.PW.2/4, the defendants are liable to pay a sum of Rs.8,34,632.50p.

7. From the aforesaid deposition of the witnesses which remain unchallenged and in the absence of any evidence in rebuttal and also as per the documents proved or record, the plaintiff-bank has been able to prove its case for recovery of the suit amount. The Suit is accordingly decreed in the sum of Rs.8,34,632.50 with pendente lite and future interest @ 15% per annum. The plaintiff-bank would also be entitled to the cost. The plaintiff-bank shall also be entitled to sell the hypothecated goods and machineries and to adjust the amount realised on account of sale against the decree.

8. Decree be drawn accordingly.