Punjab & Sindh Bank vs Anant Construction Pvt. Ltd.
2001 Latest Caselaw 1683 Del

JUDGMENT

V.S. Aggarwal, J.

1. The present civil suit has been filed by Pubjab & Sindh Bank (herinafter described as the plaintiff) for recovery of Rs. 2,73,884/- as the principal amount against the defendants with interest besides seeking a preliminary decree under Order 34 Rule 4 against defendant no. 10.

2. The facts alleged are that defendant no. 1 is a company incorporated under the Companies Act. On 15th July, 1980 defendant no. 1 through it director had approached the plaintiff and opened a current account by deposit of a sum of Rs. 5000/-. It had requested that it would require draft facility in the current account referred to above to the extent of Rs. 2,50,000/- for their business including the then subsisting advance. Security of immovable property and hypothecation of stocks besides surety of defendants 2 and 3 and one O P Poddar had been offered. The request of defendant no. 1 was acceded to through its director defendant no. 2. They executed the documents (a) a promissory note on 21st July, 1980 agreeing to pay the sum issued on demand with interest at the rate of 6% PA above the Reserve Bank rate subject to minimum of 15% PA (b) a document in the form no. 106 of 21st July, 1980 waiving right of presentiment of relative pronote and other negotiable instruments (c) stating that defendants were non-agriculturalists and that the loan received had not been and would not be utilised for any purpose connected with or incidental to that of agriculturalist (d) agreeing that promissory note referred to shall remain a security with the bank for repayment of the entire balance amount (e) confirming that the facility of overdraft available shall continue at banks pleasure (f) hypothecating the entire stock in trade of construction material like bricks, steel, cement.

3. Defendants 2 and 3 along with O P Poddar executed and delivered a letter of guarantee, granting the application of defendant no. 1 with regard to payment. As a security for due repayment of the advance, defendant no. 1 deposited the title deeds i.e. sale deed dated 26th April, 1980 with respect to immovable property S-83 Greater Kailash, New Delhi.

4. In 1983 the account was running irregular and defendants were not keeping up their commitment to the bank. They were called upon to liquidate their liability. The defendants sought the indulgence of the bank and offered additional guarantee of defendants 4 and 9. On 13th July, 1983 the amount to the said account was Rs. 3,88,100/-. It was confirmed in writing and in consideration of the said subsisting advance and in continuation of its liability defendant no.1 executed and delivered on 13th July, 1983 fresh loan documents already referred to above agreeing to pay a sum of Rs. 3,88,100/-. It undertook to pay an additional interest of 2% in addition to the rate normally agreed upon. Defendants 4 and 9 in their individual capacity executed and delivered the letter of guarantee. Defendant no. 10 confirmed that immovable property charged/mortagaged with bank would continue to be security. Defendants did not keep up their commitment and did not liquidate their admitted liability. O P Poddar thereafter had died. Defendants 4 and 8 are stated to be his legal representatives. They are also liable. Defendant no. 4 had subsequently personally guaranteed repayment.

5. Asserting that the amount of rs. 2,78,884/- is due the present suit as such has been filed.

6. Notice had been issued to the defendants and the defendants had put in their appearance. Defendant no.1 filed the written statement alleging that the civil suit is not maintainable and defendants 7 and 8 are the minors. The suit was stated to be barred by time. The correctness of the document set up by the plaintiff was disputed. It was denied that the amount so claimed in fact is due. Written statement had even been filed by defendants 7 and 8 controverting the assertions and denying the liability as set up. Subsequently there was no appearance on behalf of defendants and on 10th November, 1998 they were proceeded ex parte. S. Gurcharan Singh had appeared as PW1. He had stated that he was the Chief Manager of Credit and Card Division, Punjab & Sindh Bank, Nehru Place. up to April 1981 he was posted at Naraina Branch of Punjab & Sindh Bank. Defendant no.1 was granted the cash credit limit of Rs. 2.5 lakhs. In lieu thereof for the said facility the stocks in trade were hypothecated. Property S-83 Greater Kailash was mortagaged by deposit of title deeds by Mrs. Sangeeta Jhun jhunwala as director of defendant no.1 Ex. PW 1/5. Subsequently letter of continuity was executed which is Ex.PW 1/6. He further stated that other defendants had signed the Guarantee Deed Ex. PW 1/7. The original title deeds were deposited which is Ex. PW 1/8. The Memorandum of deposit to title deeds was executed by defendant no. 10 vide Ex. PW 1/9.

7. S. Charandeep Singh, PW-2 also appeared and deposed that present suit was filed during his tenure as Loan Officer of the Bank. The plaint has been filed by S. Dalip Singh, the then Chief Manager of the Bank and H S Kareer, the manager of the bank. He identified their signatures on the plaint. He stated that the amended plaint is signed by P S Kohli, the then Chief Manager of the Bank.

8. On the pleadings of the Parties following issues were framed on 30.1.90:-

"1. Whether the plaint has been signed, verified and instituted by duly authorised person?

2. Whether the suit is barred by limitation?

3. Whether the agreements, documents etc. ae not legal binding on the defendants? OPD.

4. Whether Rs. 3,00,000/- was paid by defendant No.1 in full and final settlement and now nothing is due and payable by the defendants? OPD.

5. Whether no equitable mortgage of property No. S-83, Greater Kailash Part II, was created as aleged in the written statement? OPD.

6. To what amount, if any, is the plaintiff entitled to?

7. What rate of interest, if any, is the plaintiff entitled to? OPD.

8. Relief."

9. Issue No.1. These documents on the record clearly show that that the civil suit has been signed and verified by duly authorised persons on behalf of the plaintiff. This is apparent from the statement of PW-2 who proved that the plaint has been signed earlier by the then Chief Manager of the bank and the amended plaint was filed by the subsequent Chief Manager of the bank at the Zonal Office, New Delhi. There is precious little on the record to indicate that he was not authorisied to sign and verify the plaint.

10. Issue nos. 2,3, 4 and 5: The evidence on issue nos. 2,3,4 and 5 was on the defendant. There is no evidence on the record to show the contrary and therefore issues have to be decided against the defendants.

11. Issue no. 6 and 7: The evidence on the record show that the demand promissory note Ex. PW 1/1 was executed with an undertaking PW 1/2 to 5. Deed of Guarantee was signed by O. P. Poddar and defendants 2 and 3. Statement of account PW 2/1 which is relevant under Bankers Book Act clearly reveal that amount claimed is due. Defendant no.10 had executed Ex. PW 1/8 depositing the original title deeds and mortgaged by deposit of the same as such has been created. Cumulative effect of these factors is that it must be held that amount of Rs. 2,73,884.20 is due A decree to that effect is passed and therefore the issue is decided in favor of the plaintiff. The plaintiff would be entitled to interest @12% PA with effect from the date of the filing of the suit till final payment is made.

12. Relief: For these reasons the civil suit is decreed for Rs. 2,73,884.20 with costs. Plaintiff would be entitled to interest @12% p.a. from the date of the filing of the suit till final payment is made. A preliminary decree is also passed under Order 34 Rule 4 against defendant no.1 directing that in default of the defendant no.1 making the payment of the decretal amount within six months the plaintiff would be entitled to apply for final decree directing that the mortgaged property or sufficient part thereof be sold and proceeds of sale be paid into the court.