Punjab National Bank vs Chadha Printers And Ors.
2003 Latest Caselaw 1352 Del

JUDGMENT

B.N. Chaturvedi, J.

1. Punjab National Bank, successor in interest of New Bank of India, by virtue of its amalgamation with plaintiff-bank, has filed instant suit against the defendants for recovery of an amount of Rs. 8,07,940/-. On being approached by defendant No.1, M/s. Chadha printers, through its proprietor, Shri Vijay Kumar Kohli, defendant No. 2, New Bank of India granted to it a term loan to the tune of Rs. 4 lakhs. In consideration of the term loan, the defendant No.1 , through defendant No.2, executed a term loan agreement on 21st of August, 1989. He also executed a deed of hypothecation in respect of goods and offset printing machines on the same date. The defendant No.1 agreed to pay the amount of loan in monthly installments of Rs.8,300/- each with interest @ 3.5% per annum over RBI rate with a minimum of 13.5% per annum with quarterly rest. The rate of interest was to remain changing from time to time as per RBI directions. Defendant No. 1, through defendant No. 2, executed various other documents, including a demand promissory note and payment undertaking etc securing repayment of term loan. Shri Virender Gupta stood as guarantor for repayment of term loan by defendants 1 and 2 and executed a deed of guarantee in favor of plaintiff-bank. As additional security for re-payment of loan amount, defendant No.6 mortgaged her property built on a plot No. 113/3 measuring 7' x 13' approximately, situated in East Moti Bagh, Sarai Rohilla, Delhi, by deposit of title deed. The defendant No. 2 died leaving behind defendant No. 6 as his legal heir. The guarantor, Virender Gupta, also appears to have died leaving behind defendants No. 3 to 5 as legal heirs.

2. The defendants 1 and 2, after availing the term loan facility, failed to adhere to financial discipline by failing to deposit monthly installments regularly, thereby rendering the term loan account highly irregular. The defendant No.1, through its proprietor, Shri Vijay Kumar Kohli, confirmed the balance amount of term loan by signing balance confirmation letters on 23rd of June, 1990 and 1st of may, 1993. In spite of repeated request, the defendants 1 and 2 failed to liquidate and regularise the term loan account. As on 21st of January, 1995, a sum of Rs.5,09.231/- was outstanding as principal amount and Rs. 2, 98,709/- on account of interest with effect from 1st of January, 1994 to 14th of April, 1996 making a total of Rs. 8,07.940/-. It is claimed that all the defendants are jointly and severally liable to pay the aforesaid amount with interest @ 21.25% per annum from the date of filing of the suit until realisation. Legal notices dated 29.10.1991, 17.11.1995 and 8.5.1996 were sent by the plaintiff-bank to the defendants, through their Advocates, but the defendants failed to respond and neglected to pay back the loan amount in spite of such notices, necessitating filing of the present suit.

3. The defendants 3 to 6, on being served, put in their appearance. They, however, failed to file any written statement. They after their initial appearance on some of the dates omitted to appear later and were consequently proceeded ex parte.

4. The plaintiff-bank adduced its evidence by way of affidavits to prove its claim against the defendants.

5. Request for term loan was made by Vijay Kumar Kohli, defendant No.2, as proprietor of defendant No. 1 vide application Ex.PW-2/1, which was considered by the plaintiff-bank and a term loan facility to the tune of Rs. 4 lakhs was sanctioned to defendant No. 1. The defendant No. 2 in the capacity of being proprietor of defendant No. 1, executed term loan agreement for Rs. 4 lakhs on 21st of August, 1989, which is marked as Ex.PW-2/3. He also executed a deed dated 21.8.1989 vide Ex.PW-2/4 hypothecating goods and machinery as per schedule attached to the said deed, in addition to a promissory note for Rs.4 lakhs vide Ex.PW-2/5 and a repayment undertaking dated 21.8.1989 vide Ex.PW-2/6. Transfer vouchers Ex.PW-2/7 to Ex.PW-2/11 were also executed by Shri Vijay Kumar Kohli, proprietor of defendant No.1 in consideration of availing term loan facility to the said extent. Shri Virender Gupta, husband of defendant No.3, Smt. Ashok Gupta, stood as guarantor for the term loan facility and executed a deed of guarantee dated 21.8.1989 vide Ex.PW-2/18 making himself liable jointly and severally with the borrower to repay the loan amount. The aforesaid documents clearly establish that the defendant No. 1, a sole proprietorship concern of Vijay Kumar Kohli, defendant No.2, availed term loan facility to the tune of Rs. 4 lakhs and executed various documents, as aforesaid, as security for repayment of the amount of term loan. The defendants 1 and 2, however, failed to abide by the payment schedule by omitting to deposit monthly installments regularly rendering the term loan account irregular. The defendants, including guarantor and the legal heirs of Vijay Kumar Kohli, proprietor of defendant No.1, failed to liquidate and regularise the term loan account in spite of repeated requests from the bank in that respect. Shri Vijay Kumar Kohli during his lifetime executed balance confirmation letters dated 23.6.1990 and 1.5.1993 vide Ex.PW-2/28 and Ex.PW-3/1 respectively acknowledging the liability towards plaintiff-bank on account of term loan facility. Apart from requests for repayment made earlier, the plaintiff-bank got served a legal notice dated 17.11.1995 vide Ex.PW-1/3 followed by another legal notice dated 8.3.1996 vide Ex.PW-1/4 to the proprietorship concern and its erstwhile proprietor as well as defendants 3 to 6. Defendants, however, failed to act in compliance with the legal notices.

6. First charge to the extent of suit claim on property No.113/3, East Moti Bagh, Sarai Rohilla, Delhi, is pleaded to have been created by defendant No.6 by deposit of a general power of attorney, Ex.PW-2/20, an agreement to sell, Ex.PW-2/21, a receipt, Ex.PW-2/23 and a will, Ex.PW-2/22, relating to the said property. The general power of attorney, which seeks to authorise defendant No. 6 to sell the said property, is an unregistered document which is incapable of conferring any authority on defendant No. 6 to effect sale or transfer of the property in question in any manner. The purported agreement to sell, Ex.PW-2/21, under which vacant physical possession of the property in question is stated to have been handed over to defendant No. 6 is actually not in the nature of an agreement as the same is signed by only one party to that agreement. Moreover, even if Ex.PW-2/21 is taken to be an agreement to sell and vacant physical possession of the property mentioned therein had been handed over to defendant No.6 in pursuance thereof, at best the defendant No.6 had acquired only possessor title in respect thereto and nothing beyond that. None of the documents deposited by the defendant No.6 with the plaintiff-bank could validly transfer any right, title or interest in the property in question in favor of the plaintiff bank as the defendant No. 6 herself had not acquired any such right, title or interest therein except the possessory title. It is not known if the executants of the will, Ex.PW-2/22, had died and the ownership of property in question stood transferred by virtue of the said will on defendant No.6 on the date when she is said to have mortgaged the property in question by deposit of title deeds in favor of the plaintiff-bank. Since the defendant No.6 was not owner of the property in question and was, thus, handicapped in mortgaging the properties in question in favor of the plaintiff-bank, deposit of the aforesaid documents was inconsequential and no decree for realisation of decrial amount by sale of property No.113/3, East Moti Bagh, Sarai Rohilla, Delhi can be passed in favor of the plaintiff bank. The defendant No.6, however, being wife of late Vijay Kumar Kohli, the erstwhile proprietor of proprietary concern, M/s. Chadha Printers, is otherwise liable to pay the loan amount together with interest thereon being his legal representative/legal heir, who inherited the estate left behind by late Vijay Kumar Kohli. Shri Virender Gupta stood as guarantor for the repayment of the term loan and on his death, defendants No.3 to 5 being his legal representatives/heirs are held liable to pay the loan amount with interest thereon to the plaintiff-bank.

7. In the result, the suit is decreed with costs ex parte for Rs.8,07,940/- with pendente lite and future interest @ 13.5% with quarterly rest, being the agreed rate of interest, against the defendants 1 and 3 to 6. The decretal amount shall be liable to be paid jointly and severally by defendants 3 to 6.

8. The hypotheticated goods and machinery lying at the premises of the plaintiff-bank are allowed to be sold and sale proceeds thereof adjusted towards realisation of the decretal amount.

9. A decree be drawn accordingly.