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1997 Supreme(Del) 830
High Court Of Delhi
SYNDICATE BANK - Appellant
Versus
BEGUM INTERNATIONAL - Respondent
Suit 1947 of 1985
Decided On : 10/01/1997
K.K.BUCHAR, S.R.Yadav
Headnote:
SYNDICATE BANK V. BEGUM INTERNATIONAL - BANKING - INTEREST - RATE OF INTEREST - CERTIFIED COPIES - BANKERS BOOKS EVIDENCE ACT - EVASIVE DENIAL - ACKNOWLEDGEMENT OF DEBT - LIMITATION.
Fact of the Case:
Syndicate Bank filed a suit against Begum International, a partnership firm, for recovery of Rs. 5,42,314.31p. The bank claimed to have advanced credit facilities under three heads: Packing Credit limit, Over-draft against hypothecation, and Packing Credit Limit. The defendants contested the suit, denying the execution of documents, the rate of interest charged, and the validity of the acknowledgment of debt.
Finding of the Court:
The court held that the plaint was duly signed, verified, and instituted by a duly authorized person. The court also found that the defendants failed to prove that they signed blank documents. The court further held that the bank was entitled to charge interest at the rate specified in the agreements, which was not less than 12.5% per annum. The court also held that the certified copies of the bank's books of account were admissible in evidence under the Bankers Books Evidence Act. The court also held that the defendants' denial of the claim was evasive and that the acknowledgment of debt was valid and barred the claim by limitation.
Issues: 1. Whether the plaint has been signed, verified and the suit instituted by a duly authorised person? 2. Whether the defendant signed blank documents as alleged? 3. At what rate the plaintiff is entitled to charge interest? 4. To what amount, if any, the plaintiff is entitled to and from whom? 5. Relief.
Ratio Decidendi: 1. The court held that the Power of Attorney, Resolutions, and other documents were duly executed and authenticated, and that the presumption under Section 85 and Section 114(f) of the Evidence Act applied. 2. The court held that the onus was on the defendant to prove that the documents were blank when he signed them, and that the defendant failed to discharge this onus. 3. The court held that the rate of interest was specified in the agreements between the parties, and that the bank was entitled to charge interest at the rate specified in the agreements. 4. The court held that the certified copies of the bank's books of account were admissible in evidence under the Bankers Books Evidence Act, and that the defendants' denial of the claim was evasive. 5. The court held that the acknowledgment of debt was valid and barred the claim by limitation.
Final Decision: The court decreed the suit in favor of the plaintiff and against the defendants for Rs. 5,42,314.31p. with future interest at the rate of 18% per annum from 1st September, 1985 with costs of the suit from the defendants and the defendants No. 2 and 3, both being responsible as principals being partners of the defendants No. 1 as well as guarantors.
( 1 ) SYNDICATE Bank, Asaf Ali Road, has filed a suit for recovery of Rs. 5,42,314. 31p. through its Chief Manager and Principal Officer Sh. K. G. P. Pillai. He also claims to be duly constituted attorney of the plaintiff Bank and titled to institute the suit. He is the person who has signed and verified the plaint. I. I. M/s. Begum International, a partnership firm comprising of two partners, namely, S. Krishna Sharma and S. Ravi, availed credit facilities under the following three heads:
(A) Packing Credit limit 4/81 dated 29. 5. 1981 with a limit of Rs. 50,000. 00. (b) Over-draft against hypothecation ODH 56/81 dated 16. 9. 81 for Rs. 2,00,000. 00. (e) Packing Credit Limit 6/81 dated 4. 11. 1981 for Rs. 50,000. 00.
1. 2. Both the partners in consideration of and to secure repayment of the Packing Credit limit 4/81 executed an Export Credit Agreement, a Demand Promissory Note for a sum of Rs. 50,000. 00 and a Letter of Guarantee on 29th May, 19981. They availed the entire amount of Rs. 50,000. 00. On 20th April, 1984, the two partners executed acknowledgement of debt on behalf of defendant No. 1 to the extentofrs. 43,253. 30p. undertheplaintiffcreditlimit. On31staugust,1985,asum of Rs. 44,633. 75p. was due.
1. 3. In addition to above said amount, the defendants availed Over-draft facility on 19th September, 1981 against hypothecation with a limit upto Rs. 2,00,000. 00 and in order to secure the repayment, the defendant executed, (a) letter of request for an overdraft limit upto two lakhs, (b) a Demand Promissory Note for a sum of Rs. 2,00,000. 00 with interest at the rate of 9. 5% above the Reserve Bank of India rates with a minimum of 19. 5% per annum compounded quarterly for the value received; (e) letter to pay over-due interest dated 16. 9. 81 wherein the defendants waived the notice of variation of rate of interest from time to time as per the directions of Reserve Bank of India; (d) deed of hypothecation of stock in trade consisting of handicrafts, batik paintings, entire raw-materials, finished goods and semi-finished goods lying at D-38, Panchsheel Enclave, New Delhi or lying with the fabricators in terms of the Deed of Hypothecation; and (e) letter of personal guarantee to the extent of Rs. 6,50,000. 00 was also given by the two defendants. The defendants deposited cash Rs. 5,000. 00 on 14th June, 1983, Rs. 100. 00 on 24th September, 1983, Rs. 15,000. 00 on 15th November, 1983. The defendants availed the said facility but failed to maintain the regular financial discipline stipulated and agreed to between the plaintiff and the defendants. A sum of Rs. 4,62,294. 26 was said to be due on 31st July, 1985.
1. 4. On 4th November, 1981, defendant No. 1 also took another Packing Credit facility for a amount of Rs. 50,000. 00 and executed (a) Export Credit Agreement; (b) Demand Promissory Note with interest at the rate of 2. 5% per annum above the Reserve Bank of India rate with a minimum of 10% compounded quarterly for the value received; and (e) Letter of Guarantee. On 30th October, 1984, the defendants executed the acknowledgement of debt in writing by the defendants and defendant Nos. 2 and 3 acknowledged their liability to the extent of Rs. 50,000. 00 alongwith interestfrom4. 11. 1981to3. 10. 1984. Ason31staugustl981asumofrs. 72,463. 30p. was found payable by the defendants.
1. 5. The defendants fully utilised the three facilities and as on 31. 8. 1985 a sum of Rs. 5,42,314. 31p. was due from the defendants, including the interest. The defendants failed to repay the amounts in terms of the agreements despite demand and service of notices. Consequently, present suit has been filed for recovery Rs. 5,42,314. 31p. with future interest at the rate of 18% from 1st September, 1985 onwards.
( 2 ) THE defendants have contested the suit inter alia on the-ground that the suit has neither been signed nor verified nor filed by duly authorised person. It has been denied that K. G. P. Pillai is Principal Officer and Chief
