Syndicate Bank, Sadar Bazar ... vs M/S. Madhu Insulated Cable Co.(P) ...
2011 Latest Caselaw 1944 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No.38/1987
%                                                 4th April, 2011

SYNDICATE BANK, SADAR BAZAR BRANCH, DELHI                    ...... Appellant

                          Through:    Mr. V.K. Dhar, Advocate.

                          VERSUS

M/S. MADHU INSULATED CABLE CO.(P) LTD. & ORS.                ...... Respondents

                          Through:    None.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    1.   Whether the Reporters of local papers may be
         allowed to see the judgment?

    2.   To be referred to the Reporter or not?

    3.   Whether the judgment should be reported in the Digest?


VALMIKI J. MEHTA, J (ORAL)

1.             The challenge by means of this Regular First Appeal under

Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned

judgment and decree dated 10.2.1986 which dismissed the suit of the

appellant bank not only against respondent No.1/defendant No.1/principal

borrower but also against the guarantors/defendant Nos.2 to 5/respondent

Nos.2 to 5.      The suit was dismissed qua the respondent No.1/principal

borrower on the ground that the bank failed to prove the appropriate

authority for filing of the suit by Mr. U.N. Bakshi, Manager of the appellant

bank.     As regard respondent Nos.2 to 5, the suit was dismissed as the
RFA 38/1987.                                                           Page 1 of 4
 guarantees were found to have been manipulated after being signed by the

respondent Nos.2 to 5 in blank. Guarantors have also been discharged on

the ground that the guarantee was granted with respect to the Bill Discount

Facility in terms of a sanction letter which was valid upto 31.10.1979,

however, the bills which were discounted in this case were from 17.3.1981

onwards.


2.             I may also note that the suit was dismissed qua defendant No.6,

acceptor of the hundis, inasmuch as the suit was not shown to have been

validly filed by Mr. U.N. Bakshi as already stated above.


3.             So far as the finding of the trial Court that the suit has not been

properly instituted and signed and which finding is given with regard to issue

No.1, I find the said finding and conclusion to be wholly illegal and perverse

in view of the decision of the Supreme Court in the case of United Bank of

India Vs. Naresh Kumar and Others AIR 1997 SC 3 in which it was held

that suits of banks should not be dismissed once they are prosecuted till the

end. It was also held by relying upon Order 29 CPC that a principal officer of

the bank is authorized to institute the suit.      In the present case, it is not

disputed that Mr. U.N. Bakshi was the Principal Manager. Therefore, I set

aside the finding with regard to issue No.1 that the suit was not properly

instituted.


4.             Learned counsel for the appellant has also drawn my attention to

the dishonoured hundis in the present case and which show that they were
RFA 38/1987.                                                             Page 2 of 4
 duly accepted by the defendant No.6/respondent No.6 and which hundis

have been exhibited as Ex.P3, P6, P9, P11 and P14. Since the suit is decreed

against respondent No.1/principal borrower and the fact that the appellant

bank has also proved the hundis dishonoured by respondent No.6, the suit is

also to be decreed against the respondent No.6.


5.             I have perused the evidence which has been led before the Court

below and the security documents have been duly proved and exhibited by

the appellant bank showing the sanctioning and the utilization of facilities by

the respondent No.1.         Statement of account has also been filed and

exhibited as Ex.PW2/4 showing the dishonouring of the hundis.


6.             So far as the dismissal of the suit against the defendant Nos.2 to

5 is concerned, I fully agree with the findings and conclusions of the Court

below.    There may be two views as to whether the guarantee letters

Ex.PW2/2 and Ex.PW2/3 were signed in blank and thereafter fabricated more

so as the trial Court has in great depth considered this aspect from paras 15

to 22 of the impugned judgment. I am of the opinion that the appeal is liable

to be dismissed qua respondent Nos.2 to 5 on the other ground that the

guarantees were given with respect to bill discounting facility, which as per

the sanctioned letter Ex.PW2/1 was valid only upto 31.10.1979 and the

discounted and dishonoured bills in the present case are of the year 1981.

Thus the guarantees cannot be enforced with respect to bills discounted

after 31.10.1979, when the validity of the facility had already expired. I

RFA 38/1987.                                                            Page 3 of 4
 therefore sustain the findings with respect to dismissal of the suit against

respondent Nos.2 to 4.


7.             The suit of the plaintiff for recovery of Rs.80,228/- is therefore

decreed with pendente lite and future interest @ 9% simple till realization

against respondent Nos.1 and 6. The appeal is dismissed against respondent

Nos.2 to 5. Appellant is awarded cost of the appeal being the Court fee paid.

Decree sheet be prepared. Trial Court record be sent back.




APRIL 04, 2011                                       VALMIKI J. MEHTA, J.

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