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IN THE HIGH COURT OF BOMBAY
D.G. Deshpande, J.
The Sangli Bank Ltd. ..... Plaintiffs.
Versus
Kanishka Investments Pvt. Ltd. others..... Defendants.
Suit No. 4632 of 1994, decided on 19-11-1998.
Advocates appeared:
Shetye with A.C. Mahimkar i/by Mahimkar Co., for the plaintiffs.
V.Y. Divekar, i/by Divekar Co., for the defendants.
When the defendants have raised this particular plea very specifically and clearly it was necessary for the plaintiff bank to amend those pleadings and to clarify the position in this regard. It was necessary for the plaintiff bank to give particulars of the defendants deposit, the particulars of the defendants authorization letter to make adjustment and the mode and manner in which the amount of Rs. 44,29,800/- was adjusted by the plaintiff bank, when it was adjusted, in which account it was adjusted, how much interest was paid to the defendants etc. However, the plaintiffs never brought all these things on record by amending the plaint. Further a Court has framed issue in this regard vide issue No.8. Thereafter also the plaintiff-bank did not amend the plaint and did not place this matter on record. It is only at the time of the evidence that an attempt was made by the plaintiffs- bank to explain how, when and when the amount of Rs. 44,29,800/- defendants was adjusted by them. In fact that is a vital and important question for the defendants but the plaintiff bank adduced evidence without any pleadings in that regard and without giving any opportunity to the defendants to verify any defence before entering into the witness-box or before cross-examining the witness of the plaintiff bank in this regard. This is, therefore, a case where the plaintiffs have tried to prove adjustment of Rs. 44,29,800/- without any pleadings in that regard and without giving any opportunity to the defendants to meet the case of the plaintiffs well in advance.
Order XXIX, Rule 1-Powers or Attorney Act, 1882, Section 4 - Recovery of, loan-Suit of Bank Signing of plaint by power of attorney holder on behalf of Bank-Defendant challenging power of attorney-Burden lies on plaintiff Bank to prove it in proper manner by adducing proper evidence and prove copy of resolution passed for issue of power of attorney-But same not done by plaintiff Bank.-When the defendants have specifically challenged the authority of Mr. Joshi to sign the plaint and of Mr. Redij to verify the plaint, it was incumbent on the plaintiffs to prove each fact in this regard separately, independently and also in legally permissible manner. However, Court is at pains to point out that the plaintiffs did not adduce any evidence in this regard. The plaintiffs did not prove passing of resolution in proper and legal manner, the plaintiffs did not examine the persons who were present in the said meeting, the plaintiffs did not examine the secretary who prepared the minutes of the said meeting, the plaintiffs did not produce original minutes regarding the said resolution, the plaintiffs did not examine any of the directors who were present in the said meeting and who passed the resolution, the plaintiffs did not examine the person issuing certified copy of the minutes and the plaintiff remained contented only by adducing evidence in the above nature reproduced above.
It the plaintiffs bank intends to prove the power of attorney, then if he produces the original, he has to prove its due execution in proper and legal manner and if he has relied upon the copy of the power of attorney then he can do so only by following the procedure under Section 4 of the Powers of Attorney Act. In the instant case, Exhibit P-28 nowhere shows that the power of attorney was lodged by the plaintiffs bank with the District Court Sangli nor does it show that it is a certified copy issued by the District Court, Sangli. In this Act, i.e. the Powers of Attorney Act it is nowhere laid down that the Special Executive Magistrate is empowered to affirm the power of attorney. Further Exhibit P-28 also does not show that the plaintiffs bank complied with the provisions of Section 4(a) of the Powers of Attorney Act particularly in this case. Counsel for the plaintiffs also could not show any provision of law under which the Special Executive Magistrate was empowered to affirm the power of attorney and Court was bound to accept the power of attorney so affirmed by the Special Executive Magistrate as legally admissible piece of evidence.
(Indian) Contract Act, 1872
Section 7-Loan agreement. In this case it was held that taking and giving loan by a borrower from the bank is a matter of agreement between the parties.
D.G. DESHPANDE, J.:---This is a Bank suit for recovering a sum of Rs. 59, 33, 000/- and odd from the defendants. It is the case of the plaintiff that the defendant No. 1 was a company registered under the Indian Companies Act 1956 and defendant Nos. 2 and 3 were the directors of defendant No. 1 and they are the guarantors in their personal capacity. Four different facilities were granted by the plaintiff-Bank to the defendants. First was a secured term loan facility against hypothecation of the vehicle with a limit of Rs. 3, 41, 000/-; second was a term loan facility against mortgage of land and building with a limit of Rs. 18, 42, 000/-; third was again a term loan facility against hypothecation of machinery with a limit of Rs. 4, 42, 000/- and fourth facility was secured term loan facility against hypothecation of machinery with a limit of Rs. 4, 30, 000/-. According to the Bank, the defendants had executed all the necessary documents in favour of the plaintiffs-Bank in respect of all these facilities and executed simple mortgage and lease and guarantee etc. as per the details given in the plaint. Further the defendants executed four separate letters of acknowledgments of dated 17-2-1992 in respect of the aforesaid four facilities. But the defendants, even though availing of the facilities, failed and neglected to repay the amount due under the aforesaid facilities, and therefore, the plaintiffs Bank gave a letter dated 3-9-1994 calling upon the defendants to pay to the plaintiffs a sum of Rs. 55, 54, 597.45 together with interest thereon. But the defendants did not pay anything thereafter, and hence, the present suit is filed for recovery of sum of Rs. 59,30,554/-
2. The defendants have raised various defence. Firstly, according to them, there is concealment and suppression of material facts. Secondly, according to them, the plaintiffs-Bank filed this suit as a counter blast to the complaint filed by the defendants before the Consumers Dispute Redressal Federation, Maharashtra State for the deficiencies in services rendered by the plaintiffs, where the Commissioner was pleased to grant damages of Rs. 5, 00, 000/- and costs of Rs. 2, 000/- to the defendants. The Bank preferred an appeal before the National Commissioner and the matter was remanded after awarding costs of Rs. 10, 000/- to the defendants. Thereafter the defendants filed complaint before the Commissioner in Maharashtra wherein order was passed on 12-3-1997 that such a dispute could not be entertained in summary way and the Civil Court would proper to decide those disputes, and the complaint of the defendants was dismissed. However, the defendants could not make counter claim in respect of the loss and damages suffered by them because their business came to a standstill before six years back i.e. in 1991-92.
3.However, according to the defendants, the plaintiff Bank is violating guidelines and norms prescribed and laid down by the Reserve Bank of India and the plaintiffs-Bank has claimed and charged interest contrary to those guidelines and circulars issued by Reserve Bank of India. Further according to defendants, on all the documents like letter of balance confirmation, letter of continuing security, promissory note etc., the signatures of the defendants were taken in blank, and that the entire statement of accounts annexed by the plaintiffs in respect of the four accounts mentioned in the plaint are false, fabricated and manipulated and the plaintiffs Bank has arbitrarily and unilaterally changed the terms and conditions which were granted by the Board of Directors of the plaintiffs Bank that the interest is charged at the rate of Rs. 23. 75% p.a. instead of Rs. 12.5% p.a. and this was against the circular issued by National Bank for Agriculture and Rural Development (NABARD).
4.Further according to the defendants, there was inordinate delay in disbursing the loan and this resulted in huge loss to the defendants, particulars of which are given by defe
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