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High Court Of Delhi
STATE BANK OF INDIA - Appellant
Versus
INDIAN UTILITY PRODUCTS - Respondent
Suit 941 of 1976
Decided On : 05/08/2000
State Bank of India Act - Suit barred by limitation - Regulation No. 77 of the State Bank of India General Regulations, 1955 provides that the plaints, written statements, petitions and applications may be signed and verified, affidavits may be sworn of affirmed, bonds may be signed, sealed and delivered, and generally all other documents connected with legal proceedings whether contentious or non-contentious may be made and completed on behalf of the State Bank by the Chairman or by any officer or employee empowered by or under regulation 76 to sign documents for and on behalf of the State Bank. In pursuance of the powers conferred under Regulation 76, notification dated 17/09/1959 was published in the Government of India Gazette, Part-Ill, Section 4 dated 26/09/1959 by virtue of which besides other persons agents were authorised to sign the documents mentioned in Regulation 76. Later on, the designation of Agents was re-designated as Branch Managers by virtue of a notification dated 21/06/1972 published in Government of India Gazette, Part-Ill, Section 4 dated 26/08/1972 which came into force w. e. f. 1/09/1972. Thus, w. e. f. 1st September, 1972, a Branch Manager was entitled to sign and verify the pleadings and authorised generally to complete all other documents connected with legal proceedings besides other matters. In the decision in State Bank of India Vs. Kashmir Art Printing Press and Ors., 1983 (54) Company Cases 56 it was held that the use in said Regulation of the words generally all other documents connected with legal proceedings whether contentious or non-contentious, may be made and completed on behalf of the State Bank, are quite comprehensive and the authorised officer has been given power to sign all documents connected with legal proceedings and one of such documents would be a vakalatnama and the presentation of plaints in court by an advocate in whose favour vakalatnama has been executed, would be a proper presentation. In the present case, vakalatnama was executed by said S. K. Batura, being Branch Manager of Paharganj branch of the plaintiff-bank in favour of Singh and Company, Advocates who presented the plaint in Court. Thus, the suit was competently filed on behalf of the plaintiff-bank and the issue is answered in favour of the plaintiff and against defendants.
Fact of the Case:
The plaintiff, a corporation constituted under the State Bank of India Act No. XXIII of 1955, filed a suit against the defendants, alleging non-payment of loan amounts due. The defendants contested the suit, claiming that it was barred by time and was bad for mis-joinder of causes of action. The court framed issues and proceeded to analyze the evidence and legal provisions.
Finding of the Court:
The court found that the suit was competently filed on behalf of the plaintiff-bank, as the Branch Manager was authorized to sign and verify the pleadings and complete all other documents connected with legal proceedings. However, the court held that the suit was barred by limitation due to the delay in rectifying objections and re-presenting the plaint. The court also dismissed the defendants' claim for loss suffered due to the bank's actions, and ordered the suit to be dismissed with no order as to costs.
Issues: The issues included whether the suit was competently filed, whether it was instituted within time, the amount the plaintiff was entitled to, the alleged illegal locking of the defendants' factory/godown, and the relief sought.
Ratio Decidendi: The court's decision was influenced by the interpretation of the State Bank of India General Regulations, 1955, which empowered the Branch Manager to sign and verify pleadings and complete all other documents connected with legal proceedings. The court also considered the delay in rectifying objections and re-presenting the plaint, leading to the dismissal of the suit on grounds of limitation.
Final Decision: The court dismissed the suit as barred by limitation and ordered the plaintiff-bank to refund a specific amount to the defendants.
( 1 ) PLAINTIFF filed this suit inter-alia alleging that it is a corporation constituted unders the State Bank of India Act No. XXIII of 1955 and has its branches, amongst others, at Paharganj, New Delhi. S. K. Batura is the Branch Manager of Paharganj branch and is competent to sign and verify the plaint and to institute suit under the State Bank of India Regulations, 1955 and the notification (s) issued thereunder. Defendant No. 2 is the sole proprietor of defendant No. 1 -firm and on their approaching the said branch of the plaintiff-bank, lock and key loan facility (against stock and machinery) of Rs. 50,000. 00 was sanctioned to them. In consideration thereof/defendant No. 2 executed agreement of hypothecation dated 16/02/1970, the terms and conditions whereof are incorporated in para No. 5 of the plaint. One of the terms was that interest would be charged @ 1-1-4% above State Bank of India advance rate with minimum of 8-3/4% per annum to be calculated on daily balance-Additionally, defendant No. 2 executed demand promissory note in the sum of Rs. 50,000. 00 in favour of the bank on 16/02/1970. It is pleaded that the bank further agreed to grant clean term loan limit facility of Rs. 12,000. 00 to defendants 1 and 2 on the personal security of defendant No. 3. Defendant No. 3 executed guarantee agreement on 30/09/1972 in favour of the bank. He also furnished demand promissory note in the said sum dated 30/09/1972 executed by defendants 1 and 2 in his favour and duly endorsed by him in favour of the bank together with another demand promissory note of Rs 12000. 00 executed by him in favour of defendant No. 1 and endorsed by defendant No. 1 in favour of the plaintiff-bank. Salient terms of the said guarantee agreement dated 30/09/1972 have been set out in para No. 6 of the plaint. It is stated that defendants 1 and 2 availed of the aforesaid loan facilities and as per the statements) of account, Rs 92626. 56 in lock and key loan account and Rs 17029. 86 in clean term loan account, totaling Rs 109656. 42 including interest were due from the defendants as on 25/09/1975. On 5/06/1973 defendants 1 and 2 gave the revival letter besides confirming the balance. Defendants have failed to pay the said amount despite repeated demands and service of legal notice dated 29/06/1974. It was prayed that a decree of Rs 109656. 42 may be passed against defendants 1 and 2 and the pledged stock/hypothecated articles be ordered to be sold and sale proceeds thereof appropriated towards the decretal amount under Order XXXIV Rule 6 Civil Procedure Code. It was also prayed that a decree for Rs 17029. 86 may be passed against defendant No. 3 with costs and interest pendente lite and future @ 12% per annum.
( 2 ) DEFENDANTS have contested the suit by filing separate written statements. In the written statement filed by defendant No. 3 by way of preliminary objections, it is alleged that the suit is barred by time and is bad for mis-joinder of causes of action. On merits, it is denied that S. K. Batura is competent to sign and verify the plaint as alleged. It is not disputed that defendant No. 3 stood guarantor for defendant 1 and 2 and signed certain documents. However, it is pleaded that defendant No. 3 has been informed that the entire amount of Rs 12000. 00 with interest stands paid by defendants 1 and 2 to the bank. Liability to pay the suit amount is denied.
( 3 ) IN the joint written statement filed by defendants 1 and 2, by way of preliminary objections, it is denied that the plaint has been signed and verified and suit instituted by a properly authorised person on behalf of the plaintiff-bank. It is alleged that the bank illegality locked the defendants factory/godown in September, 1970 and this fact was brought to the notice of Kalyan Sudaran, Inspector who came for periodic audit of the accounts of defendant No. 1 from the central office of bank at Bombay. At the instance of Sh. Sudaran, the locks were removed from godown. As the
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