Mary Kurian vs Lord Krishna Bank
2023 Latest Caselaw 6024 Ker

           IN THE HIGH COURT OF KERALA AT ERNAKULAM
                              PRESENT
           THE HONOURABLE MRS. JUSTICE MARY JOSEPH
    FRIDAY, THE 9TH DAY OF JUNE 2023 / 19TH JYAISHTA, 1945
                         RFA NO. 17 OF 2007
  AGAINST THE JUDGMENT IN OS 372/1999 OF PRINCIPAL SUB COURT
                 TRIVANDRUM DATED 29/06/2006
APPELLANTS/DEFENDANTS:

    1     MARY KURIAN
          W/O.KURIAN E. KALATHIL, C-10, JAWAHAR NAGAR,
          THIRUVANANTHAPURAM.
    2     KURIAN E.KALATHIL T.C.NO.15/1004
          OPPOSITE TRIDA, VAZHUTHACAUD, THIRUVANANTHAPURAM.
          BY ADVS.SRI.A.V.THOMAS
                  SRI.NIDHI SAM JOHNS



RESPONDENT/PLAINTIFF:

          LORD KRISHNA BANK LTD., BRANCH OFFICE
          AT FORT, THIRUVANANTHAPURAM REPRESENTED BY,
          ASSISTANT GENERAL MANAGER, M.R.P.S.NANDAKUMAR,, SON
          OF P.S.SREEDHARAN PILLAI.[SUBSTITUTED] [THE NAME OF
          THE RESPONDENT IS SUBSTITUTED AS HDFC BANK, FORT
          BRANCH, 1ST FLOOR, KARIMPANAL ARCADE, P.B.NO.5141,
          EAST FORT, THIRUVANANTHAPURAM, PIN-695023,
          REPRESENTED BY ITS MANAGER.] NAME OF THE RESPONDENT
          IS SUBSTITUTED AS PER ORDER DATED 03/10/2016 IN
          IA.2052/2016 IN RFA.17/2007.
          BY ADVS.LORD KRISHNA BANK LTD (PARTY)
                  SRI.LEO GEORGE
                  SRI.P.B.SURESH KUMAR



     THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
15.10.2019, THE COURT ON 09.06.2023 DELIVERED THE FOLLOWING:
 R.F.A No.17 of 2007                            2


                                 MARY JOSEPH, J
                  ---------------------------------------------------
                               R.F.A No.17 of 2007
                  ---------------------------------------------------
                   Dated this the 9th day of June, 2023

                                   JUDGMENT

The defeated defendants/debtors under a Deferred Payment

Guarantee (DPG) is before this Court challenging the judgment of

Sub Court, Thiruvananthapuram (for short, 'the trial court') in the

appeal on hand.

2. O.S. No.372/1999 is a suit filed by Lord Krishna Bank Ltd

(referred to hereinafter as 'bank' for short) seeking realisation of a

sum of Rs.7,66,487/- (Rupees seven lakhs sixty six thousand four

hundred and eighty seven only) as specifically shown in the

statement of accounts furnished alongwith the plaint with future

interest at 18% per annum from 01.07.1999 till realisation, from the

defendants and their assets and costs of the suit. The defendants in

the suit are Mrs.Mary Kurian and Mr.Kurian E. Kalathil who are wife

and husband.

3. The facts of the Original Suit are discussed in brief

hereunder :

DPG for a sum of Rs.13,39,000/- (6,37,200 + 7,01,800) for

purchasing a compressor and wagon drill from M/s.Atlas Copco

(India) Ltd was applied by the 1st defendant before the bank on

02.11.1993. The 2nd defendant stood as guarantor to the DPG

facility availed and under it, payments have to be made by the

defendants in six instalments. Defendants had executed necessary

documents in favour of the bank undertaking their liability to repay

the amount. Defendants failed to clear the last two instalments

which fall due on 02.05.1996 and 04.11.1996.

4. Despite default of the defendants to remit sufficient funds in

time to repay the instalments due as above, the bank had raised

DPG devolved loans to repay the dues to M/s.Atlas Copco (India), the

beneficiary under the Scheme through the latter's order. The 1 st

defendant had acknowledged her liability upto 31.12.1996 by executing

acknowledgement of debt and security on 05.03.1997. Despite

issuance of letters and reminders severally to clear off the debt,

defendants did not respond. Thereupon, a registered legal notice

demanding the amount due was caused to be served on the defendants

on 05.04.1999. Notice was received by them but neither the dues were

repaid nor any reply was sent. Since Rs.7,66,487/- being the sum due

to be paid by the defendants as on 30.06.1999, claiming that alongwith

future interest at the rate of 18% per annum from 01.07.1999 till

realisation, the Original Suit in question was filed by the bank.

5. Defendants 1 and 2 filed written statement and a counter

claim for recovery of Rs.1,52,287/- with future interest at 6% per

annum from the date on which it was raised till the date of decree

and at the same rate thereafter till recovery, was also raised. The

pleadings raised by the bank in the plaint were denied outrightly.

6. The 2nd defendant purchased machineries worth

Rs.2,57,64,100/- from BEML, TELCO & ATLAS COPCO in connection

with the work of Konkan Railway Corporation Ltd undertaken by

him. As the work progressed, need for more machineries arose,

which the bank in view of some procedural constraints was not

ready to meet with. As advised by the bank, purchase was made in

the name of the first defendant for Rs.13,39,000/- under the DPG.

The bank had guaranteed the payments to the seller of the

machineries to make the payments as and when it became due and

demanded by the buyer. Whenever payment is made by the bank

interest at normal rates is also agreed to be paid. The DPG scheme

was introduced by Circular No.63/92 of the bank dated 18.05.1992.

The machineries purchased by the defendant were hypothecated to

the Bank as security for repayment of the money advanced.

7. The Fixed Deposit receipts (9 in numbers) of the 2 nd

defendant maintained with the bank were requested to be closed

and debited in the account of the 1 st defendant as and when the

amount become payable to M/s.Atlas Copco vide letter issued by the

defendants to the bank on 24.09.1994. The transaction referred to

in the case on hand formed part and parcel of the transaction

alleged in O.A. No.1178/1999 filed by the bank against 2 nd defendant

and pending before the Debt Recovery Tribunal. Rs.1,99,400/- and

Rs.1,84,500/- were due from the defendants respectively from

26.05.1996 till 26.11.1996. Thus, a total sum of Rs.4,32,369/- was

due as on 30.09.1998 and a sum of Rs.4,26,342/- was paid towards

that from the final bill for Rs.28,77,780/- settled by Konkan Railway

Corporation Ltd on 28.10.1998. From the above amount, entire

liability except Rs.6,027/- due towards principal amount as on

30.09.1998, was discharged. The amount outstanding to be paid by

the defendant is only Rs.6,675/- [6027 + 648(interest)]. A sum of

Rs.1,58,962/- was deposited on 11.07.2000 before the Court. That

amount was withdrawn by the bank, after adjusting Rs.6,675/- due

to them, and therefore Rs.1,52,287/- is liable to be returned by the

bank to the defendants and prayer for realisation of that amount is

made in the counter claim.

8. Claim of the plaintiff that liability upto 31/12/1996 was

acknowledged by the defendants by letter dated 05.03.1997 is

outrightly denied and a plea that the suit is barred by limitation was

also taken. Copy of a letter dated 05.03.1997 produced by the

plaintiff is alleged as a document fabricated to support the claim of

the bank which is vexatious. Plaintiff bank examined its Manager of

Fort Branch, Thiruvananthapuram as PW1 and its Assistant

Manager, as PW2. Exts.A1 to A16 were marked. The 2 nd defendant

was examined as DW1 and Exts.B1 to B6 were marked.

9. As PW1, the plaintiff testified categorically in tune with the

pleadings raised in the plaint. Though he has sworn in as the duly

authorised and responsible officer of the bank, he turned out to be

incredible on several aspects, during cross examination. According

to him, the bank had issued a Circular in respect of DPG, copy of

which is produced and marked in evidence as Ext.B1. Admittedly

the 2nd defendant had long-standing association with the bank and

the bank had the Power of Attorney for the Konkan Railway

Corporation and the primary guarantee for the transaction is the

machineries. It was admitted by PW1 that at the time when the DPG

facility was availed, fixed deposit receipts for Rs.89 lakhs and odd

was maintained by the 2nd respondent with the bank.

10. The contention of the respondents that the bill settled by

Konkan Railway as part of work done for them was adjusted by the

bank was not denied outrightly. Instead PW1, has said that he has to

verify the receipt of any money in that way. It was also said that

Rs.22 lakhs recovered by the bank from Konkan Railway as Power of

Attorney holder was adjusted to the loan pending against 2 nd

respondent before the Debt Recovery Tribunal (for short 'DRT').

PW1 has further stated that only on verification of materials he

could say about the actual sums due under the two events.

Admittedly purchase of compressor was for use in the contract work

undertaken to be performed by the 2 nd respondent for Konkan

Railway Corporation. 1st defendant had never undertaken any work.

Admittedly, Rs.1,58,000/- was deposited by defendants before the

court and that amount was released in favour of the plaintiff.

11. PW1 was confronted during cross examination with the

contentions in the counter statement filed by him before DRT in the

case filed against the 2nd defendant. It was stated that the proceeds

in ABD 106/93 closed was adjusted against the account maintained

by the 1st defendant. Though admitted by PW1, it was clarified that

it was a mistake and a petition was already filed before the DRT to

get the mistake corrected. Copy of the petition is produced, but

marked subject to proof on account of the opposition raised against

it, for not being a certified copy. True copy of ABD 106/93 account

was produced but for the reason that the entries were not verified

by any competent officer, marking was opposed and therefore

marked as Ext.A13 subject to proof. Moreover, PW1 was not in a

position to state about the bank guarantee furnished by DW1 in the

DPG facility availed by her. Admittedly for availing DPG facility,

sufficient guarantee is required to be furnished. It is pertinent to

note from the version of PW1 during cross examination that he was

not aware whether the Fixed Deposit receipts of the 2 nd defendant

stood as securities for the DPG facility stand in the name of the 1 st

defendant.

12. Admittedly, the 1st defendant has no security with the bank.

It was stated by PW1 in page 28 of his deposition :

"ഒന്നാംപ്രതിക്ക ് DPG കൊടുത്തത് രണ്ടാം പ്രതിയുടെ security യിലാണ്. ഈ രണ്ടു DPG യും ഒറ്റ scheme ൽ ഉൾപ്പെടുത്തിയാണ് കൊടുത്തത്. രണ്ടാം പ്രതിയുടെ business നാണ ് DPG വാങ്ങിയത്. രണ്ടാം പ്രതിക്ക് addl DPG കൊടുക്കുന്നതിനു ബുദ്ധിമുട്ടുള്ളതുകൊണ്ടാണ് ഒന്നാം പ്രതിയുടെ പേരിൽ DPG കൊടുത്തത് (Q) ശരിയാണ് (A). "

PW1 would further day:

"ഒന്നാം പ്രതിയുടെ instalments pay ചെയ്തു എന്ന ് പറഞ്ഞ സമയത്ത് രണ്ടാം പ്രതിയുടെ FD bank ൽ ഉണ്ടായിരുന്നു ആ FD re- schedule ചെയ്തിരുന്നെങ്കിൽ ഈ ലോൺ avail ചെയ്യേണ്ടി വരില്ലായിരുന്നു (Q) കണക്ക് നോക്കാതെ പറയാൻ പറ്റില്ല (A) രണ്ടാം പ്രതി re-schedule ചെയ്യാൻ letter തന്നിട്ടില്ലേ (Q) അറിയില്ല (A) Ext.

B3 ഉണ്ടെന്നു പറഞ്ഞാൽ നിഷേധിക്കാൻ പറ്റില്ല "

Ext.B3 is allegedly the copy of the letter issued to plaintiff by

the 2nd defendant to re-schedule the Fixed Deposit that stood in his

name. PW1 has stated further :

"DPG instalment പേയ്‌മെന്റ് അടക്കാൻ പറ്റാതെ വരുമ്പോഴാണ് DPG instalment will be converted as bL account. ഇങ്ങനെ DPG -bL account ആയി convert ചെയ്യുകയാണ് എന്ന് A/H ന് letter കൊടുത്തിട്ടുണ്ടോ (Q) അറിയില്ല (A). കുര്യൻ കളത്തിൽ ടിയാന്റെ DPG യുടെയും bl ന്റെ യും account ആവശ്യപ്പെട്ട് Ext. B5 and B6 തന്നിട്ടുണ്ട് (Q) അതനുസരിച്ചു മറുപടി കൊടുത്തിട്ടില്ല (A) "

PW1 has also added :

"Bank ന്റെ normal rate of interest എത്രയാണ്? ഇപ്പോൾ 10.5% ആണ്. DPG ക്ക് normal rate ആണ് charge ചെയ്യുന്നത് (Q) RBI പറയുന്ന rate ആണ ് charge ചെയ്യുന്നത ് (A) ഒന്നാം പ്രതിയുടെ DPG ക്കും 21.5% ആണ ് charge ചെയ്യുന്നത ് (Q) statement നോക്കണം (A) Bank ന ് discretion ഇല്ല. RBI അംഗീകരിച്ച rate

ആണ് . "

13. It appears from the aforesaid extracts that though PW1

deposes on behalf of the plaintiff as its authorised officer, he was not

conversant on ever so-many aspects material and decisive of the

liability. Admittedly DPG facility was directed to be availed in the

name of the 1st defendant who is none other than the wife of the 2 nd

defendant who actually had undertaken the work of Konkan Railway.

Admittedly in view of some technical bar for the bank to grant

additional DPG in the name of 2 nd defendant that the benefit was

directed by it to be availed in the name of the 1 st defendant.

According to PW1 for granting DPG, guarantee needs to be

furnished. According to defendants, the Fixed Deposit receipts

maintained by the 2nd defendant with the bank were given as

guarantee at the time when the DPG facility was availed. The specific

plea of the plaintiff was that the amount covered by the Fixed Deposit

receipts were utilised for settling the BL availed by the 2 nd defendant.

Though it was admitted by PW1 that prior notice to the account holder

is required to convert the money covered by Fixed Deposit receipts for

adjusting the BL account, nothing of that sort is forthcoming in

evidence. Though a claim for Rs. 7,66,487/- with interest at the rate of

6% p.a. was made, PW1 appears to have no idea about the

accumulation of the sum. Though 21% was claimed as the interest

rate prescribed by RBI, a Circular indicative of that was not found

produced by the plaintiff, despite confrontation on that count by the

defendants. Though the statement of accounts produced by the

plaintiff were marked subject to proof, the bank failed to adduce

any further evidence to establish its authenticity. Therefore, the

claim of the plaintiff stands defeated for want of evidence.

14. The trial court has relied on Ext.A3 the alleged

acknowledgement of liability by the 1 st defendant as the basis of the

plaintiff's claim for realisation of money, the authenticity of which

was vehemently disputed by the 1 st defendant. According to him, it

is a document fabricated to suit the claim of plaintiff which actually

was time barred. The trial court has blindly relied on Ext.A3 in total

disregard of the challenge raised against its veracity. The trial court

has gone to the extent of comparing the signature found in Ext.A3

with the admitted ones in some documents which formed part of the

evidence in the case on hand. The trial court was convinced from a

scrutiny of the signatures in those documents that those are

identical. Thus the trial court found it as acknowledgment of the

monetary liability due to the bank by the 1 st defendant. Accordingly,

the claim for money raised by the bank was found not barred by

the period of limitation.

15. True that there is no bar against the exercise of jurisdiction

by the court to compare the disputed signatures available to it. But,

a perusal of the signature found in the documents scrutinised by the

trial court, convince this Court that those are not similar. Therefore,

this Court has no hesitation to hold that the trial court is erred and

unjustified in arriving at a finding on the basis of Ext.A3 that the

liability having been acknowledged by the 1 st defendant, the Suit is

not barred by limitation.

16. Moreover, the case of the plaintiff itself was that their

reminders of demand, were not responded. When viewed in that

backdrop also, the claim of the plaintiff that Ext.A3 was issued

acknowledging the liability outstanding is unbelievable. According

to the defendants the liability was never acknowledged and Ext.A3

is only a fabricated document. When such a stand is taken and when

the signature in Ext.A3 bears no similarity with the admitted

signatures of the 1st defendant, the proper recourse for the trial

court was to sent the disputed one to the Forensic Scientific

Laboratory and to obtain an opinion on its authorship.

17. When such a dispute is raised, it is for the plaintiff to apply

for obtaining expert opinion. But, the plaintiff failed to do so and

thereupon the trial court took the burden of the plaintiff to prove

the disputed document. The document being crucial and decisive of

the limitation period for raising a claim for realisation of money, the

plaintiff must have taken all earnest efforts to prove it. Without the

burden being discharged by the plaintiff, the trial court has received

the disputed document in evidence to hold that the claim having

been raised by the plaintiff within three years from the date, the

document bears, is not barred by limitation. Trial court has gone

wrong in holding so.

18. In view of the above, the plaint claim is liable to be

defeated. The trial court undoubtedly went wrong in decreeing the

suit. The defendants have not adduced any evidence to establish

their entitlement to receive Rs. 1,52,287/-. The trial court has

rightly rejected the counter claim for the above reason. In view of

the discussion hereinabove made, the claim of the plaintiff is only to

be defeated.

In the result, the appeal is allowed in part with costs. The

judgment and decree to the extent it allowed the claim of the

plaintiff for realisation of money and passing of decree is set aside.

Consequently O.S. No.372/1999 stands dismissed with costs.

Counter claim also stands dismissed.

Sd/-

MARY JOSEPH JUDGE ab/ttb