Standard Chartered Bank vs Satish Kumar Gupta
2012 Latest Caselaw 567 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              RFA No.818/2003

%                                                  27th January, 2012

STANDARD CHARTERED BANK       ..... Appellant
                Through: Mr. Ajay Monga, Advocate with
                         Mr. Abhinav Tandon, Advocate.

                      versus

SATISH KUMAR GUPTA                                 ..... Respondent

                 Through:                None.

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

    To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1. This case is on the Regular Board of this Court since

16.1.2012. Today the matter is effective item No.13 on the Regular Board.

No one appears for the respondent. I have therefore heard the counsel for

the appellant, perused the record and am proceeding to dispose of the

appeal.

2. The challenge by means of this Regular First Appeal filed

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

impugned judgment of the trial Court dated 1.7.2003 dismissing the suit of

the appellant/plaintiff-bank for recovery of the balance due on an overdraft

facility which was granted to the respondent. The suit was dismissed

although the appellant/plaintiff proved and exhibited all the security

documents. The trial Court dismissed the suit holding the same to be

barred by limitation.

3. Learned counsel for the appellant argues that once there is a

financial limit in an overdraft facility the same is not a loan for a fixed

amount, for which limitation will begin from the date of grant of the loan.

Learned counsel for the appellant argues that an overdraft financial limit is

granted so that the said account is continuously operated within the

financial limit, as differentiated from the grant of a loan facility for a fixed

amount which is governed by the limitation of three years from the first

operation of the account. It is argued that there arises no cause of action to

claim the amount in an overdraft facility unless operation of the account is

running out of order or is ceased by the appellant/plaintiff-bank or if in a

particular year there is no transaction in the account to show closure of the

account. It is argued that in the present case there was a withdrawal by the

respondent/defendant from the account on 03.4.2000, and which

withdrawal is an amount of ` 35,000/-. It is also argued that in fact at best

the account will cease to be operative when the notices from 19.9.2000 to

22.7.2002 were sent to the respondent/defendant asking for repayment of

the amount, and failing which the pledged shares were to be sold . It is

argued that the subject suit which was filed on 24.2.2003 is within

limitation inasmuch as even the notice for repayment of the amount is only

dated 19.9.2000 and therefore if three years are taken from 19.9.2000, the

suit filed on 24.2.2003 will surely be within limitation. In fact the counsel

for the appellant argues that the pledged shares were ultimately sold on

22.10.2001 and therefore limitation of three years for claiming of the

balance due on 22.10.2001 will only expire on 22.10.2004 as whether the

account is in order or not will only be known/crystallized after sale of the

pledged shares.

4. I agree with all the aforesaid arguments as advanced on behalf

of the counsel for the appellant and adopt them in totality and am not

reproducing them to avoid repetition.

5. Before the trial Court, the appellant had duly proved the grant

of overdraft facility and withdrawal of the amounts by the

respondent/defendant. The fact that the appellant/plaintiff proved its case

is noted by the trial Court in paras 7 and 8 of the impugned judgment which

read as under:-

"7. In his affidavit filed by PW-1 Sh. Chandra Sekhar Reddy, in lieu of his examination in chief, he has deposed on certain material facts consistent to the claim of the plaintiff and in addition to that he has exhibited the documents Ex.PW-1/A to

1/L in all. The document Ex.PW-1/A is the Power of Attorney dated 5.7.2002, by which he was permitted by the plaintiff to sign, verify and institute the suit for and on behalf of the plaintiff. Ex.PW-1/B is the application submitted by the defendant for granting an overdraft facility on 04.11.99. The document Ex.PW-1/C is the overdraft agreement cum- guarantee-cum-pledge dated 4.11.99, Ex.PW-1/D and 1/E are the promissory note and letter of continuity dated 4.11.99, respectively. Ex.PW-1/F, collectively are the notices sent to the defendant to sell the shares. The document Ex.PW-1/G is the share sale document. Ex.PW-1/H is the true copy of the statement of account duly certified under the Bankers Books Evidence Act. Ex.PW-1/I is the legal notice dated 20.2.2002 and the postal receipt in that regard is Ex.PW-1/J and AD card is Ex.PW-1/K. The notice dated 23.1.2003 sent by postal receipt is Ex.PW-1/L. The testimony of this witness being un- challenged on the facts deposed and documents exhibited, there appears no reason to disbelieve him on the facts deposed by him and the documents proved by him. Accordingly, on the basis of the documents Ex.PW-1/A, the General Power of Attorney proved in favour of Sh. Chander Sekhar Reddy, I find that he was competent to sign, verify and institute the suit for and on behalf of the plaintiff. Therefore, I hold that the plaint has been signed and verified and the suit has been instituted by a competent person duly authorized in that regard for and on behalf of the plaintiff.

8. By the document Ex.PW-1/B, 1/C, 1/D and 1/E, I find that the plaintiff has also proved its case for granting overdraft facilities on execution of the agreement-cum-guarantee-cum- pledge dated 4.11.99 and accordingly, in view of these documents, I find that the plaintiff has proved the granting of overdraft facility on 4.11.99 in accordance with the said documents executed by the defendant in favour of the plaintiff. By the document Ex.PW-1/F, the plaintiff has proved the notices collectively sent to the defendant for sale of the shares and the document Ex.PW-1/G is the document by which the shares were sold. The other documents Ex.PW-1/H to 1/L are the legal notices through which the defendants were called to make the payment. Accordingly, by all these documents the

plaintiff could prove that certain amount could be recovered by sale of certain shares and the balance amount shown in the statement of account could not be recovered despite service of the legal notice."

6. In view of the above, I hold that the appellant-bank had proved

its claim. It is also held that the suit is within limitation. The suit of the

appellant-bank is therefore decreed for a sum of ` 4,91,060.62/- alongwith

pendente lite and future interest @ 9% per annum simple. Parties are left

to bear their own costs. Decree sheet be prepared. Trial Court record be

sent back.

VALMIKI J. MEHTA, J JANUARY 27, 2012 Ne