Rajasthan High Court
M/S Sohan Textiles Industries vs P N B on 10 December, 2021
Bench: Sudesh Bansal
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Civil First Appeal No. 332/1997
1. M/s Sohan Textiles Industries through proprietor Sohan Lal
Agrawal S/o Kalu Ram Agrawal (Ardakka wale) 12 Kotri near
Ajad Nagar, Ajmer Road Madanganj, Kishangarh.
2. Sohan Lal Agrawal S/o Kalu Ram Agrawal (Ardakka wale) 12
Kotri near Ajad Nagar, Ajmer Road Madanganj, Kishangarh.
Other address:
Oswali Mohalla Bhagchand near house of Choradiya, Madan ganj,
Kishangarh.
3. Smt. Kamla W/o Ram Kishan Agarwal, Oswali Mohalla
Bhagchand near house of Choradiya, Madanganj, Kishangarh.
----Appellant-defendants
Versus
The Punjab National Bank through Branch Mahanagar,
Madanganj, Kishangarh.
----Respondent-Plaintiff
For Appellant(s) : Mr. Babu Lal Gupta
For Respondent(s) :
HON'BLE MR. JUSTICE SUDESH BANSAL
Judgment
10/12/2021
This first Appeal has been filed by the appellants-defendants
assailing the judgment and decree dated 13.05.1997 whereby and
where under Civil suit filed by the respondent-plaintiff- Punjab
National Bank for recovery of Rs. 83,076/- has been decreed and
while passing the decree for such due amount, the Trial Court
directed to pay interest @ 14% p.a. quarterly on the cash credit
facility amounting to Rs.29,682/- and interest @ 20.25% p.a.
quarterly on the term loan of Rs.53,394/-.
(2 of 5) [CFA-332/1997]
The brief facts of the case as culled out from the record are
that appellant-defendant No.2- Sohan Lal Agrawal as proprietor of
appellant-defendant No.1- Firm Sohan Textiles Industries applied
for term loan of Rs. 40,000/- on 30.09.1978 and again applied for
cash credit facility of Rs.15,000/- on 16.12.1978 for the purpose
of establishment of cottage industry. The appellant-defendant
No.3 had furnished guarantee for re-payment of the said loan. It
appears that though defendant Nos. 1 & 2 paid few installments of
the loan, however could not pay the entire loan, therefore, the
respondent-bank filed a Civil suit for recovery of due loan on
17.12.1993 through its authorised person, Senior Manager Mr.
Suraj Prakash.
After receiving the notices of aforesaid suit, defendants
submitted joint written statement and took defence that Mr. Suraj
Prakash has no authority to file the present suit for and on behalf
of the Bank. The defendants, in their written statement had not
denied the fact of taking term loan and cash credit facility and
have also not disputed the execution of the mortgage deed and
other relevant documents in favor of the Bank to ensure re-
payment of loan amount. However, the defendants only disputed
that since defendant No.2 is not a literate man and does not know
English, therefore, he made signatures on the papers of loan
under ignorance. The defendants have raised specific objection
with regard to the rate of interest which has been calculated and
being levied by the plaintiff-bank, is too higher and against public
policy.
On the basis of rival pleadings, learned Trial Court settled as
many as six issues and recorded the evidence of both the parties.
The plaintiff-bank, in support of its claim has produced one
(3 of 5) [CFA-332/1997]
witness PW-1 Jaswant Singh and exhibited documents from
Exhibit-1 to Exhibit-83. In rebuttal, from the side of defendants,
only defendant No.2-Sohan appeared and deposed his statement
without filing any documentary evidence.
The Trial Court, after appreciating the pleadings and the
evidence available on record has decided all the issues
independently and has passed the impugned decree against the
defendants.
This first appeal was filed way back on 15.09.1997. This
Court, vide order dated 06.05.1999, directed the appellant to
furnish solvent security in the sum of Rs.90,000/- to the
satisfaction of the Deputy Registrar (Judicial) under Order 41 Rule
1 (3) CPC.
By perusal of order-sheet dated 08.12.2000, it appears that
the respondent-bank, despite service did not put in appearance
and therefore, this Court directed to proceed ex-parte hearing of
this first Appeal against the respondent-bank. Since thereafter, no
one has appeared to oppose the first appeal for and on behalf of
the respondent-bank.
Heard learned counsel for the appellants and perused the
material available on record.
As far as defence of defendants about authorization of Mr.
Suraj Prakash to file the Civil suit for and on behalf of the Bank is
concerned, the Trial Court has framed issue No.1 and has recorded
finding that power of attorney has been exhibited as Exhibit-1. By
this power of attorney, bank has authorised its Senior Manager to
file and to institute the Civil suit for recovery of due loan amount.
The defendants have not produced any oral or documentary
evidence to show that the said power of attorney is not lawful or
(4 of 5) [CFA-332/1997]
valid in any manner, therefore this Court is not inclined to interfere
in the findings of issue No.1 recorded by the Trial Court.
The appellants-defendants have not disputed that the term
loan of Rs.40,000/- and cash credit facility to the tune of
Rs.15,000/- was obtained for the purpose of establishment of
cottage industry and the necessary loan documents were also
executed in favor of the bank. In the back drop of such admission
and the evidence produced by the bank supported with the
documents, the Trial Court has categorically found that on the
basis of documents Exhibit- 23, 24, 25, 26, 27, 28, 29, 30, 31, 32,
33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43 & 43-A, the defendants
have accepted the terms and conditions of the loan and further
have acknowledged the due loan amount. Accordingly, after
appreciation of the documents of plaintiff-bank, the Trial Court has
passed the decree for recovery of Rs.83,076/- in favor of the
respondent-bank.
This Court does not find any illegality or perversity in the
findings recorded by the Trial Court which are based on the
documentary evidence and more over there is admission of
defendants about execution of all these documents. The defence
taken by the defendants in their written statement that documents
were executed under ignorance, has not been substantiated by
any substantive evidence, therefore, this Court is not inclined to
interfere with such findings and affirms the same.
As far as rate of interest, directed to be paid on due loan
amount is concerned, the Trial Court has directed to pay 14%
annual interest quarterly on the due amount of cash credit facility
Rs.29,682/- from the date of suit till its realisation and further
20.25% annual interest quarterly on due term loan amount of
(5 of 5) [CFA-332/1997]
Rs.53,394/- from the date of filing of the suit i.e. 15.12.1993. This
rate of interest has been awarded on the basis of documents,
executed by defendants in favor of the bank and in the
documents, rate of interest is specifically mentioned. There is a
clause in the documents that on failure of payment of installments
of loan amount, the defendants would be liable to pay penal
interest also.
This Court finds that when a written contract between the
parties in relation to the payment of interest rate and about the
payment of penal interest in case of default, has been executed,
then the order allowing to pay due loan amount with such interest
may not be said to be against the public policy.
This is not the case, where no rate of interest was agreed
upon between the parties, and the Court has awarded such higher
rate of interest without any basis. Therefore, this Court is not
inclined to interfere in the issue of rate of interest so awarded by
the Trial Court. No other arguments have been raised.
Thus, this first Appeal is found devoid of merits and
accordingly, dismissed. There is no order as to cost. Record of the
Trial Court be sent back.
(SUDESH BANSAL),J
Simple Kumawat/07
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