Smt. Maya Rani vs Oriental Bank Of Commerce & Ors.
2011 Latest Caselaw 870 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI


%                                                 Date of decision : 14.02.2011


                            WP (C) No. 956 of 2011

SMT. MAYA RANI                  ...       ...       ...       ...       ...       ... PETITIONER

                        Through : Mr. Rajeeve Mehra, Sr. Adv. with
                                  Mr. Arvind Sharma, Advocate.

                                    -VERSUS-

ORIENTAL BANK OF COMMERCE & ORS. ...                            ...      RESPONDENTS

                        Through : Mr. H.C. Kundra, Adv. for R - 1.

CORAM :

HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE RAJIV SHAKDHER


1.        Whether the Reporters of local papers
          may be allowed to see the judgment?                           No

2.        To be referred to Reporter or not?                            No

3.        Whether the judgment should be                                No
          reported in the Digest?


SANJAY KISHAN KAUL, J. (ORAL)

CM APPL. No. 1997/2011

Allowed subject to all just exceptions.

+ WP (C) No. 956/2011

1. M/s. Mod Enterprises was a partnership firm constituted by

one Mr. Sudhir Kumar Sharma, respondent No. 3 herein

and Smt. Maya Rani, the petitioner herein. The partnership

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firm with the partners signing availed of loan facilities from

respondent No. 1 Bank - packing credit loan facility of Rs.5

lakhs and FDBP loan facility in the sum of Rs.8 lakhs. The

documents in this behalf were executed in the prescribed

form, which are not in dispute.

2. It is the case of respondent No. 1 Bank that the firm failed

to submit the export documents after shipment of goods to

liquidate the pre-shipment advance. The payment was

also not made. Similarly, the terms and conditions of

packing credit facilities were also not adhered to.

3. The important aspect is that there was a change in

constitution of the firm in pursuance whereto respondent

No. 2 herein being the firm was dissolved and was taken

over by respondent No. 3 herein as its sole proprietor. In

pursuance thereto, fresh loan documents were executed.

It is, however, alleged that the other respondents herein

and the petitioner agreed to continue as guarantors. We

may notice that one of the persons, who is alleged to be

the guarantor, was the husband of the petitioner, but

during the proceedings for recovery, the name of the

husband of the petitioner was deleted from the array of

parties as there was nothing placed on record to show that

he had guaranteed the principal debt. It has also been

stated that the petitioner herein (original defendant No. 3)

became a guarantor in respect of the loaning facilities

granted by the Bank.

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4. The default resulted in filing of civil suit on the Original

Side of this Court with the plaint signed and verified on

29.10.1990. The suit was, however, transferred to Debt

Recovery Tribunal ( for short, „DRT‟ ) on constitution of the

Tribunal.

5. The allegation in the plaint, which is material for examining

the controversy, was noticed in para 13 of the impugned

order and reads as under :-

"The plaintiff states and submits that the defendants have from time to time confirmed, admitted and / or acknowledged their liability towards the plaintiff in terms of the balance confirmations dated December 30, 1985, June 30, 1986, December 23, 1987 signed and executed by Defendant No. 2 and the balance confirmation dated November 21, 1987 signed and executed by defendant No. 4. The defendant No. 3 also admitted her liability both as Partners and Guarantor in terms of her letters dated August 13, 1986."

(emphasis supplied)

6. The defence taken by the petitioner herein as defendant

No. 3 in respect of that para is also reproduced below :-

"Para 13 to the extent it deals with the alleged letter dated 13.08.1986 of the answering defendant is a matter of record; rest of the contents are totally false, frivolous and hence denied. It is denied that the answering defendant admitted or acknowledged any liability in terms of alleged balance confirmation dated 30.12.1985, 30.06.1986 and 23.12.1987. The alleged balance confirmation signed and executed by defendant No. 2 cannot bind the answering defendant as the defendant No. 2 had no authority of the answering No. 3 to acknowledge and confirm any liability on her behalf. Similarly, the alleged balance confirmation dated 21.11.1987 signed and executed by defendant No. 3 does not bind the answering defendant at all."

(emphasis supplied) _____________________________________________________________________________________________

7. The result of the aforesaid pleadings is that neither the

existence nor the genuineness of the letter dated

13.08.1986 was put in issue. The denial in the written

statement was blissfully vague to say the least. This

document is the fulcrum of the case of respondent No. 1

Bank against the petitioner and is reproduced hereunder :-

"Ref. No. ............... Dated : 13.8.86 The Senior Manager, Oriental Bank of Commerce, 78, Guru Amar Dass Bhawan, Nehru Place, New Delhi.

Reg. : M/s. Mod Enterprises.

Dear Sir, As you are aware that the firm M/s. Mod Enterprises has since dissolved w.e.f. 3.7.86 and Sh. S.K. Sharma has taken all the assets & liabilities of the firm. A written dissolution deed to the said effect was also executed on 3.7.86 and a copy of the same was also submitted to you. Though the firm has been dissolved and I have got no concern whatsoever, except for the liability which stood on the date of dissolution of the firm. I undertake to pay the overdue amount in the Packing Credit Limit granted to M/s. Mod Enterprises and I shall act as a Guarantor till the entire outstanding amount is paid off/cleared.

You are requested to plea treat the firm as a Dissolved one and with a view to secure the outstanding amount in the account of M/s. Mod Enterprises, I may be treated as a guarantor on the strength of this letter.

Thanking you.

Yours faithfully,

sd/-

( Maya Rani )"

(emphasis supplied)

8. It is at the stage of filing of written submissions that the

petitioner sought to raise various pleas in the context of

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the aforesaid letter before the Presiding Officer of the DRT.

In sum and substance, the pleas are four-fold:-

(i) The document, which purports to be on a letterhead, is actually a photocopy of the letterhead with the signatures being also photocopied, though the typed material is in original. The plea, thus, is that either there was blank letterhead of the firm though signed, of which photocopy is taken and the material typed on; or in the alternative, the photocopy of a blank letterhead is taken, typed upon and then the signatures lifted from some other document and photocopied/placed on the said document. Thus, the authenticity of this document is sought to be disputed;

         (ii)        The document dated 13.08.1986, if it so exists,
                     can     at    best      be    an    agreement            to   execute
                     guarantee and not a guarantee itself;
         (iii)       The plea of non-stamping of this document as a
                     guarantee document; and
         (iv)        The plea of limitation since this document was
                     executed         on     13.08.1986         and      there        is    no

subsequent document executed by the petitioner.

9. The DRT, however, found against the petitioner in terms of

the order dated 20.10.2005. It did notice the pleas made

in defence, but the same were rejected. The original

document was perused. The plea that signatures of the

petitioner were a photocopy was rejected. The plea of

limitation was also dealt with. The DRT came to the

conclusion that since the debt had been acknowledged by

the sole proprietor (respondent No. 3 herein), the same

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would extend the liability of the petitioner as a guarantor.

Insofar as the plea of the document being unstamped was

concerned, the DRT held that it did not discharge the

liability of the petitioner herein. We note that the plea that

the document dated 13.08.1986 is only an agreement to

execute the guarantee has not been dealt with; possibly

for the reason, it was never advanced. Assuming for a

moment, such a plea was advanced, a review would

ordinarily have been filed. Admittedly, no review was filed

to correct the record.

10. The petitioner aggrieved by this order preferred an appeal

before the Debt Recovery Appellate Tribunal ( for short,

„DRAT‟ ). Learned senior counsel for the petitioner points

out that at the stage of admission of the appeal, the then

Presiding Officer granted exemption for pre-deposit for the

whole amount in terms of the Order dated 09.11.2006.

The appeal has, however, been ultimately dismissed by the

impugned order dated 18.11.2010, which is now sought to

be assailed by the petitioner under Article 226 and 227 of

the Constitution of India ( for short, „the Constitution‟ ).

11. We have heard learned counsel for the parties at length

and perused the record filed with the present writ petition

running into seven volumes with the assistance of learned

counsel for the parties.

12. We may note at the inception itself that this Court does not

sit as a court of second appeal, but if some manifest

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injustice is found to have occurred or the conscience of the

Court is pricked, this Court is not devoid of the jurisdiction

to interfere in those proceedings.

13. Learned senior counsel for the petitioner before us also

made submissions in respect of the aforesaid four pleas

recorded by us. Learned senior counsel strenuously

contended that the authenticity of the document dated

13.08.1986 is in doubt and this Court should call for the

original record to peruse the document.

14. We are, however, not persuaded to accept the plea of

learned senior counsel for the petitioner because the

petitioner cannot improve its case beyond what it had set

out in the written statement. We have extracted the

averments made in the plaint as well as the written

statement for the said purpose, which are also extracted in

the impugned judgment and have weighed with the DRAT.

It was never the case of the petitioner that the document

dated 13.08.1986 was not executed by the petitioner.

What was sought to be denied was the liability arising from

the document because the acknowledgement of debt was

not signed by the petitioner. The DRT as well as the DRAT

have categorically stated that they have perused the

document and satisfied themselves about the genuineness

of the same. In this behalf, we would only extract para 12

of the impugned order, which reads as under :-

"12. I have gone through these authorities. These hardly dovetail with the facts of the present case. _____________________________________________________________________________________________

The crucial and important document upon which the entire case rests is the letter dated 13.08.1986 written by the appellant to the Bank. I have perused the said document. This document is on the letterhead of M/s. Mod Enterprises. It does not appear to be a photostat copy. It appears to be the original letterhead of M/s. Mod Enterprises. The explanation given by the appellant that the signature appearing on the said letter is the photostat of the original signature of Smt. Maya Rani, which was obtained from some other document, is difficult to fathom. I have perused the said document from all the sides. There appears to be no such inkling. The veracity of the document is not in doubt.

(emphasis supplied)

15. In view of the concurrent findings of two courts below and

the own stand of the petitioner in her written statement,

the authenticity of that document cannot be doubted.

Once the veracity of the document is not in doubt, the

guarantor‟s liability would continue to obtain, ordinarily,

alongside the principal debtor, i.e., would be „co-extensive‟

with that of the principal debtor. The extension of

limitation by the principal debtor would bind the guarantor.

We would revert to this aspect.

16. Insofar as the second plea of the document being only an

agreement to execute the guarantee is concerned, the

same finds no discussion even in the impugned judgment

of the DRAT. We have also noticed that this plea was not

even recorded by the DRT and, thus, seems to have been

either given up or abandoned during the course of

arguments since no review was filed. We do not propose

to allow the writ petitioner to raise such a plea before us in

writ jurisdiction without attempting to correct the record of _____________________________________________________________________________________________

the authorities below. Be that as it may, we may also note

that the document dated 13.08.1986 would have to be

read in its entirety and understood in the context in which

the document was executed.

17. The status of the petitioner was different from the other

guarantors. The reason was that the petitioner was a

principal borrower though her plea is that she was only a

sleeping partner since her husband was a government

servant. Even if the partnership was dissolved, her liability

outstanding as on that date would not have been

extinguished unless the amounts due on that date were

cleared and the proprietorship concern of respondent No. 3

commenced business afresh. Thus, the letter dated

13.08.1986, if it is read in its proper perspective, it only

acknowledges this status of the petitioner, which is that

she would be liable for the debts of the partnership firm as

obtaining on the date it got reconstituted into a

proprietorship concern. The petitioner in order to enable

her to move out of the partnership firm agreed to

guarantee the amount, which stood due against her.

18. We may notice that the issue of stamping of the document

in question has again not been dealt with by the DRAT nor

has the petitioner gone back to the DRAT by filing any

review application alleging that any plea advanced has

been left untouched. In any case, in view of the nature of

the document discussed above, this plea would not be

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available. We may also take into account the observations

made by the Supreme Court in Javer Chand & Ors. v.

Pukhraj Surana, AIR 1961 SC 1625 that a court has to

judicially determine the matter as soon as the document is

tendered in evidence before it is marked as an exhibit.

Once a document has been marked as an exhibit in the

case and has been used by the parties during the process

of examination and cross-examination, an unstamped

document is not liable to be rejected. We are, of course,

conscious of the fact that in the proceedings before the

DRT, no such cross-examination is available as a matter of

right, but then the objection should have been raised at

the stage when the document was exhibited. This aspect

attains greater significance when seen in the light of pleas

or rather the absence of plea in the written statement qua

the status of the letter dated 13.08.1986.

19. Insofar as the plea of limitation is concerned, in the

aforesaid circumstances, learned senior counsel for the

petitioner cannot dispute that if the authenticity of the

letter dated 13.08.1986 is not doubted, then the

acknowledgement debt by the principal borrower, i.e.,

respondent No. 3 herein would equally bind the petitioner.

We also note that the petitioner had executed a letter of

continuity at the time when the original documents were

executed while availing of the loan facility.

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20. The matter has, in fact, dragged on for two decades though

the bank must have been making an endeavour to recover

the dues from the principal debtor. Apparently, this

exercise has not borne fruit. These observations are based

on the fact that proceedings initiated by the Recovery

Officer continued during the pendency of the appeal

instituted by the petitioner.

21. We find no reason to interfere under Article 226 and 227 of

the Constitution. We were inclined to impose exemplary

costs, but for the fact that the petitioner is a lady, who has

recently lost her husband.

22. Dismissed.

CM APPL. No. 1996/2011

Dismissed.

SANJAY KISHAN KAUL, J.

February 14, 2011                                       RAJIV SHAKDHER, J.
madan

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