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1999 Supreme(Del) 953
High Court Of Delhi
CATHOLIC SYRIAN BANK LIMITED - Appellant
Versus
VIJAY INTERNATIONAL - Respondent
Suit 2574 of 1994
Decided On : 11/03/1999
B.R.NARANG, M.C.KOCHHAR
A bank is entitled to recover the amount due from a borrower who has availed of credit facilities and failed to repay the amount due.
Headnote:
BANKING - SUIT FOR RECOVERY OF MONEY - SECTIONS 138, 142 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 - SUMMARY OF ACTS AND SECTIONS REFERRED: The Negotiable Instruments Act, 1881, Sections 138 and 142 - The court held that the plaintiff bank was entitled to a decree for the recovery of the amount due from the defendants, along with interest and costs. The court also directed that if the amount due was not paid within six months, the plaintiff bank could apply for a final decree against the defendants for the sale of the mortgaged property.
Fact of the Case:
The plaintiff bank filed a suit against the defendants for the recovery of Rs. 5,31,433.00, along with interest and costs. The plaintiff bank alleged that the defendants had availed of packing credit and temporary overdraft facilities from the bank and had failed to repay the amount due.
Finding of the Court:
The court found that the defendants had availed of the packing credit and temporary overdraft facilities from the bank and had failed to repay the amount due. The court also found that the defendants had executed an agreement of guarantee and had deposited a sale deed and a memorandum of deposit of title deed with the bank as security.
Issues: Whether the plaintiff bank was entitled to a decree for the recovery of the amount due from the defendants?
Ratio Decidendi: The court held that the plaintiff bank was entitled to a decree for the recovery of the amount due from the defendants, along with interest and costs. The court also directed that if the amount due was not paid within six months, the plaintiff bank could apply for a final decree against the defendants for the sale of the mortgaged property.
Final Decision: The court decreed the suit in favor of the plaintiff bank and against the defendants for a sum of Rs. 5,31,433.00, along with costs. The court also directed that the defendants jointly and severally pay pendente lite interest from the date of filing of the suit till the date of the decree and interest at 12% from the date of the decree till realization.
( 1 ). THIS is a suit on behalf of the plaintiff praying for passing a decree of Rs. 5,31,433. 00 along with pendente tite and future interest.
( 2 ). THE Plaintiff-Bank is a pint Stock Banking Company, incorporated and registered under the Companies Act, 1956. The plaint is duly signed and verified by Shri C. Surendran, Chief Manager of the Connaught Circus Branch of the plaintiff bank, who is authorised to sign and verify the plaint on behalf of the plaintiff Bank.
( 3 ). The defendant No. 2-Shri Naresh Kumer is the sole Proprietor of defendant No. 1-M/s. Vijay International. The defendant No. 3-Mr. Jai Prakash and defendant No. 4- Mr. Mam Chand stood as Guarantor of defendant No. 1.
( 4 ). The defendants 3 and 4 were served as per this Court s order dated 31. 7. 95 and defendants 1 and 2 were served by way of publication in the daily edition of Statesman dated 11. 8. 1997. The defendants were proceeded ex-parte as per this Court s order dated 24. 11. 1997. Thereafter the plaintiff-Bank has filed evidence by way of affidavit of Shri M. Sridharan, Manager to prove its case.
( 5 ). It is avarred in the plaint on behalf of the plaintiff that the plaintiff had granted to defendant No. 1 Packing Credit facility of Rs. 10. 00 lacs and a Temporary Overdraft facility. The defendant No. 1 availed of Packing Credit facility but failed to repay the amount due and a sum of Rs. 4,70,865. 00 was due at the time of filing of the suit.
( 6 ). IT is further averred in the plaint on behalf of the plaintiff that statement of account of Packing Credit A/c. of the defendant No. 1 duly certified under Banker s Book Evidence Act is Ex. P-8 shows that Rs. 4,70,865. 00 was due in Packing Cerdit A/c. at the time of filing of the suit.
( 7 ). It is also averred in the plaint that defendant No. 1 has atso availed of Temporary Overdraft facility but failed to adjust the same and a sum of Rs. 60,568. 00 was due from defendants in Temporary Overdraft account at the time of the filing of suit. Thus a total sum of Rs. 5,31,433. 00 was due from the defendants on this amount at the time of filing of suit.
( 8 ). It is the plaintiff s case that the defendants 3 and 4 executed agreement of guarantee (Ex. P-10) and became co-obligants and guarantors and are, therefore, liable to pay the amount due to the plaintiff-Bank.
( 9 ). It is further the plaintiff s case that as a security, defendants 3 and 4 with an intention to create Equitable Mortgage deposited with the plaintiff-Bank Sale Deed dt. 29. 2. 68 (Ex. P-11 ) and mortgaged their property bearing No. 3463, Chowk Gali Lallu Missor, Qutab Road, Illaqua No. 14, Delhi, with the plaintiff Bank. The defendants 3 and 4 also executed Memorandum of Deposit of Title Deed (Ex. P-12) dated 17. 3. 1992.
( 10 ). Thereafter a Legal Notice dated 29. 10. 93 (Ex. P-13) was sent by the plaintiff through its Advocate. Postal receipts are Ex. P-14 to P-16. and three returned ~" envelops are Ex. P-17 to P-19.
( 11 ). The plaintiff has filed evidence by way of affidavit of Shri M. Sridharan, Manager of the plaintiff-Bank. The averments made in the plaint have been supported by the said affidavit. There is no rebuttal of these pleas.
( 12 ). Accordingly, the plaintiff is entitled to a decree. The suit is decreed. A decree is passed for a sum of Rs. 5,31,433. 00 in favour of the plaintiff and against the defendants with costs. The defendants jointly and severally are also directed to pay pendente lite interest from the date of filing of the suit till the date of the decree to the plaintiff - Bank @ 23. 25% per annum with quarterly rests in respect of Rs. 4,70,865. 00 due in Packing Credit Account and 24. 75% per annum with quarterly rests in respect of Rs. 60,568. 00 due in temporary over-draft account. The plaintiff is also entitled to interest at 12 per cent from the date of the decree till realisation as the transaction is of a commercial nature. This amount be paid within six months from today.
( 13 ). It is further
