IMPORTANT POINTS
(1) Continuing Guarantee - the guarantee can be utilised at any time before the maturity date or after maturity date, but guarantee were not limited till the date of maturity. The bank under the authorities created by the complainants in the guarantee letters, signed discharged voucher and other papers has rightly utilized the maturity amounts of FDRs towards the loan, which were overdue against the borrower.
(2) Limited Period - The complainants stood as guarantee for a loan accounts and there is nothing on record that the guarantees were for limited period till the maturity of the FDRs.

ORDER

Heard Mr. Chandrachud Bhattacharya, Advocate, for the complainants and Mr. Pallav Saxena, Advocate, for the opposite parties.

2. Kantilal Jamnadas and Mrs. Vibhuti Jamnadas have filed above complaint for directing The Jammu & Kashmir Bank Limited and another (the opposite parties) to pay (i) Rs.44963377/-, as the maturity amounts of FDR No.0301998/04 dated 31.03.2004 (being Rs.32864313/-) and FDR No.933740/04 dated 05.05.2004 (being Rs.12099064/-) with interest, at the same rate as payable on FDR from March, 2006 and May, 2006, respectively, till actual payment, (ii) Rs.50/- lacs, as the compensation for deficiency in service, (iii) Rs.one lac, as the costs of the litigation and (iv) any other relief, which is deemed fit and proper, in the facts and circumstances of the case.

3. The facts, as stated in the complaint and emerged from the documents attached with the complaint, are as follows:—

(a) The complainants had FDR No.0398625, of maturity value of Rs.16957925/- on 26.03.1998 and FDR No.0398640 of maturity value of Rs.6431354/- on 03.03.1998, in their joint names with Vysya Bank Limited, Mumbai. The complainants wrote letters dated 25.03.1998 and 27.03.1998, respectively to Vysya Bank Limited to transfer aforesaid FDRs to, The Jammu & Kashmir Bank Limited, branch at Fort Chambers, Homi Modi Cross Lane-2, Fort Mumbai-400023. The complainants further get these FDRs transferred to The Jammu & Kashmir Bank Limited, branch at Jaipur (hereinafter referred to as the bank), where they renewed FDR No.0398625, for the period up to 28.03.1999 (renewed No.30573) and FDR No.0398640, for the period up to 05.05.1999 (renewed No.30613). The complainants deposited Rs.1164461.52 in each in two new FDR Nos.30582 and 30583 on 18.02.1998, with the bank, of which, maturity dates were 18.07.2001. The bank issued Cash Certificates in respect of these FDRs.

(b) A firm M/s. Sommerville Farms Pvt. Ltd., registered office at Metro House, 2nd Floor, M.G. Road, Mumbai-400020 applied for “Cash Credit Facilities”, to the bank, for which, the complainants agreed to furnish their above FDRs as the security. The bank sanctioned loans to M/s. Sommerville Farms Pvt. Ltd. and tripartite agreements were executed between M/s. Sommerville Farms Pvt. Ltd., the complainants and the bank. The bank also took the papers i.e. (i) NRNR account opening forms signed by the complainants, (ii) Undertakings, signed by the complainants, (iii) Advance to be signed by the borrower and the complainants and (iv) Demand promissory note, from the borrower and the complainants by way of guarantees to the loans. The bank disbursed loans of Rs.15074613/- in Loan Account No.241 on security of FDR No.30573 on 27.03.1998, Rs.2158082/- in Loan Account No.246 on security of FDR Nos.30582 & 30583, on 18.04.1998 and Rs.5563191/- in Loan Account No.250 on security of FDR No.30613 on 04.05.1998 to M/s. Sommerville Farms Pvt. Ltd.

(c) On maturity of FDR Nos.30573 and 30613, the complainants invested the amounts of maturity for further period of one year. The bank wrote a letter dated 18.05.1999 to M/s. Sommerville Farms Pvt. Ltd. that owing to renewal of FDR No.30573 (new No. 323463) w.e.f. 31.03.1999 to 31.03.2000 and FDR No.30613 (new No.323475) w.e.f. 05.05.1999 to 05.05.2000, new sets of loan documents were required. On the request of the borrower, the complainants again stood as the sureties for the loans and furnished the documents, as required in the letter dated 18.05.1999, including FDRs Nos.323463 & 323475. The loan amounts were also changed as Rs.17197700 in Loan Account No.241 and Rs.6516500/- in Loan Account No.250. On maturity of FDR No.323463, the complainants again invested its maturity amount in FDR No.323709 w.e.f. 31.03.2000 to 31.03.2002 and FDR No.323463 in FDR No.323742 w.e.f. 05.05.2000 to 05.05.2002. The bank again wrote a letter dated 18.05.2000 to the borrower that owing to renewal of FDR Nos.323709 and 323742), new sets of loan documents were required. On the