Back
1993 Supreme(Del) 384
High Court Of Delhi
CANARA BANK - Appellant
Versus
VIKRAM BHARGAVA - Respondent
Suit 2565 of 1988
Decided On : 07/21/1993
Atul Kumar Sinha
A borrower is liable to repay a loan amount to the bank that has taken over the assets and liabilities of the bank that originally sanctioned the loan.
Headnote:
BANKING - RECOVERY OF LOAN - SUIT FOR - TRANSFER OF UNDERTAKING - LIABILITY OF BORROWER - BANKING REGULATION ACT, 1949 - SECTION 45(7).
Fact of the Case:
The plaintiff bank filed a suit against the defendants for recovery of a loan amount of Rs. 48,000/- sanctioned by Lakshmi Commercial Bank Ltd. to the 1st defendant for the purchase of an Ambassador Car. The loan was secured by demand promissory note, letters of guarantee, and a letter on Form No. 42-A. The assets and liabilities of Lakshmi Commercial Bank Ltd. were later transferred to the plaintiff bank under Section 45(7) of the Banking Regulation Act, 1949.
Finding of the Court:
The court found that the defendants had failed to file a written statement or examine any witnesses to rebut the averments made in the plaint. The court also found that the plaintiff bank had proved its case through the evidence of its witnesses and the exhibits.
Issues: Whether the defendants were liable to repay the loan amount to the plaintiff bank.
Ratio Decidendi: The court held that the defendants were liable to repay the loan amount to the plaintiff bank as they had executed the necessary documents to secure the loan and had acknowledged their liability in the balance confirmation slip and the acknowledgment of debt and security.
Final Decision: The court decreed the suit in favor of the plaintiff bank for recovery of Rs. 1,77,031.64/- with costs and interest @ 18.5% p.a.
( 1 ) THIS is a suit for recovery of sum of Rs. l,77,031. 64p together with pendente lite and future interest @ 18. 5% p. a.
( 2 ) THE facts of the case briefly stated are that the plaintiff is a banking company constituted under the Banking Companies (Transfer and Acquisition of Undertakings) Act of 1970 with its Head Office at Bangalore in the state of Karnataka and its branches spread all over India. As such it is entitled to sue and to be sued in its own name. Shri V. Ananda is the Principal Officer and Manager of a branch of the plaintiffr Bank situated at C-29, D. D. A, Shopping Complex, Defence Colony, New Delhi. He is duly authorised to sign and verify the present plaint and to institute the present suit and in. this, regard he holds a power of attorney from the Plaintiff Bank.
( 3 ) THE present suit relates to what was previously known as the Lakshmi Commercial Bank Limited. In pursuance of Central Government Notification dated 23rd August, 1985 issued under Section 45 (7) of the Banking Regulation Act, 1949by the Govenunent of India, the entire undertaking of the Lakshmi Commercial Bank limited was transferred and vested in the Canara Bank (plaintiff bank) as the corresponding new Bank for the Lakshmi Commercial Bank as specified in the said notification w. e. f. 24. 8. 85.
( 4 ) AS per averments made in the plaint,defendant No. l approached the plaintiff Bank for the grant of a loan and submitted a detailed application dated 6. 4. 81 in this behalf for purchase of an Ambassador Car. It is further stated that pursuant to this request, Lakshmi Commercial Bank Limited sanctioned a loan of Rs. 48,000. 00 to defendant No. l subject to the condition that defendant No. l and 2 and late Shri Bishan Kumar Bhargava will sign and execute the necessary documents in this behalf. In consideration and to secure the repayment of the balance from time to time in the loan amount of Rs,. 48,000. 00 together with interest charges and expenses etc. , defendants 1 and 2 and late Shri Bishan Kumar Bhargava executed and delivered on 13. 4. 81 to the Lakshmi Commercial Bank Ltd. various documents including demand promissory note dated 13. 4. 81 duly signed and executed by defendant No. l, two letters of guarantees, both dated 13. 4. 81 duly signed and executed by defendant No. 2 arid late Shri Bishan Kumar Bhargava, letter on Form No. 42-A dated 13. 4. 81 duly signed and executed by defendant No. l. It is further stated that as per request of the defendant No. 1, the plaintiff Bank sent a cash order dated 13. 4. 81 for a sum of Rs. 64,000. 00 to M/s. Hindustan Auto Distributors, Calcutta on account of the price of an Ambassador Mark IV Car bearing No. WME-5510 purchased by defendant No. l.
( 5 ) IT is further alleged in the plaint that defendant No. l deposited a sum of Rs. 4500. 00 on 23. 6. 81, a cheque of Rs. 7500. 00 on 30. 12. 81 (which was dishonoured on presentation) and two cheques of Rs. 1000. 00 each on 13. 3. 82 (one of these cheques was dishonoured on presentation), ,two cheques of Rs. 7500. 00 and Rs. 1,000. 00 on 26. 9. 82 and lastly a sum of Rs. 500. 00 on 4,6. 85 for reducing its liabilities. It is further alleged that the defendant No. 1 signed and executed balance confirmation slip dated 4. 6. 85 acknowledging the liability for a sum of Rs. 92,225. 74. After the assets and liabilities of the Lakshmi Bank were taken over by the plaintiff Bank, the defendant No. 1 signed and executed an acknowledgment of debt and security dated 6. 11. 85 wherein he acknowledged that an amount of Rs. 91,725. 74 inclusive of interest, costs and charges Upto 31. 3. 85 was due from him to the Plaintiff Bank. It is further alleged that as on 23. 4. 84, a sum of Rs. 98,844. 79p was due and outstanding from the defendants to the plaintiff. The defendants are also liable to pay an amount of Rs. 78,975. 90 being the interest from 24. 5. 85 till 10th August, 1988. It has been further alleged in the plaint that all the defendants are the legal he
