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2015 Supreme(Mad) 1029
HIGH COURT OF JUDICATURE AT MADRAS
R. MAHADEVAN, J.
ICICI Bank Ltd. Represented by its Branch Manager – Appellant
Vs.
Trishla Apparels Pvt. Ltd., represented by its Director Mylapore – Respondent
S.A.No. 493 of 2007 & M.P.Nos.1 & 2 of 2007
Decided On : 24-02-2015
For the Appellant:S. Ragunathan, Advocate.
For the Respondent:S. Suresh Kumar, Advocate.
Headnote:
Interest Tax Act, 1974 - Section 4 – Bank - permanent injunction restraining - oral and documentary evidence - permanent injunction restraining - To Grant permanent injunction restraining the defendants from debiting any amount from account of plaintiffs bearing Account under heads Penal Interest and Special Tax - To direct the defendants to pay to plaintiffs a sum of with future interest at rate said sum from the date of the plaint till the date of realization and also for costs - Defendants resisted the suit by filing their written statement denying the allegations made in the plaint - It is stated that suit is barred by limitation. After and due verification, the defendants had sanctioned the credit facility under the head of Open cash credit for a sum of plaintiffs had accepted the terms and conditions laid down in the sanction letter in which the plaintiffs had agreed to pay interest at rate plus interest tax – Held, Limits are due or un-renewed. Further, it is not the case of the defendants that the plaintiffs had failed to furnish the stock statements and other financial papers regularly, in accordance with the terms and conditions as agreed by the plaintiffs - From the above evidence and their case it is clear that without any reason or basis defendants had debited the amount in respect of penal interest and special tax – Further in view of letters and demand from plaintiffs defendants gave credit to a portion of the penal interest deducted however they failed to give credit to the special tax debited by them without any reason - From the above, it is clear that without any basis or reason or without any violation or fault on part of plaintiffs, since they have debited the amount in respect of penal interest, they gave credit to a portion of penal interest deducted - Therefore considering all these aspects and considering both oral and documentary evidence, the courts below have decreed suit as prayed for and therefore, this Court does not like to interfere with the findings of the courts below - According to the plaintiffs as well as the defendants, the last debit was made - As per the above said Article I, the period of limitation is three years and the time begins from the close of the year in which the last item admitted or proved is entered in the account and such year to be computed as in the account - Suit in this case was filed - As indicated earlier last transaction was held - As per the said Article I, the account of the plaintiffs having been closed at the end of calendar and the period of limitation would and therefore, the suit was filed well within the time and it is not barred by limitation - As far as next question is concerned, a perusal of the sanction letter reveals nothing about penal interest or special tax. But in the written statement the defendants have stated that the plaintiffs accepted the terms and conditions laid down in the Sanction Letter in which the plaintiffs agreed to pay interest at the rate – Appeal dismissed
The judgment and decree, dated 9.10.2006 made in A.S.No.34 of 2006 on the file of the learned Additional District and Sessions Judge, Fast Track Court No.V, Chennai, confirming the judgment and decree dated 8.4.2005 made in O.S.No.368 of 2003 on the file of the learned XII Assistant Juge, City Civil Court, Chennai, are under challenge in this second appeal.
2. The appellant is the defendant in the suit in O.S.No.368 of 2003, whereas the respondent is the plaintiff.
3. For easy reference and for the sake of convenience, the appellant may hereinafter be referred to as the defendant and the respondent be referred to as the plaintiff wherever the context so require.
4. The necessary facts leading to the filing of the suit are as under:-
a. On 5.1.1995 the defendants had sanctioned the overdraft credit facility for a sum of Rs.55,00,000/- on completing the formalities. The plaintiffs were operating the facility through their current account No.CC270. Again on 14.5.1997, the defendants had enhanced the overdraft credit facility to Rs.60,00,000/- from Rs.55,00,000/- in respect of the said current account and also sanctioned additional secured overdraft facility to the plaintiffs for a sum of Rs.15,00,000/- in respect of the current account No.CC1446.
b. The defendants were adjusting the amount payable towards the credit facility from the accounts of the plaintiffs periodically. While so, the defendants have debited from the accounts of the plaintiffs under the heads of "Penal interest" and "Special Tax".
c. In spite of several letters objecting the debiting of penal interest and special tax as arbitrary and no notice was given or explanation called for, for making such debit. The plaintiffs have not committed any default in payment to levy penal interest and there is also no reason for deducting the amount in respect of special tax.
d. Since the deductions were arbitrary and not in accordance with the terms and conditions of overdraft credit facility, the defendants have given credit to a portion of penal interest, but failed to give credit in respect of special tax without any reason.
e. Thereafter, the defendants had transferred and merged the account No.CC270 with the current account No.CC1446 with effect from 17.8.2002. The merged account No.CC1446 is being operated till date.
f. On 27.11.2002, a notice was given to the defendants demanding to pay a sum of Rs.1,75,589.65 towards wrongful debit upto 31.12.1998 within 15 days from the receipt of the notice. However, as there was no response, the plaintiffs filed a suit seeking for the following reliefs:-
aa. To declare that the debit made by the defendants on the heads 'Penal Interest' and 'Special Tax' from the account of the plaintiffs bearing A/c Nos.2270 merged with CC 1446 are not lawful;
bb. To Grant permanent injunction restraining the defendants from debiting any amount from the account of the plaintiffs bearing Account Nos.CC 270 and CC 1446 under the heads "Penal Interest" and "Special Tax".
cc. To direct the defendants to pay to the plaintiffs a sum of Rs.1,85,139.65 with future interest at the rate of 6% p.m on the said sum from the date of the plaint till the date of realisation and also for costs.
5. The defendants resisted the suit by filing their written statement denying the allegations made in the plaint. It is stated that the suit is barred by limitation. After scrutinisation and due verification, the defendants had sanctioned the credit facility under the head of 'Open cash credit' for a sum of Rs.55,00,000/-. The plaintiffs had accepted the terms and conditions laid down in the sanction letter, dated 5.1.1995, in which the plaintiffs had agreed to pay interest at the rate of 19% plus interest tax.
6. Subsequently, the open cash credit facility was extended to Rs.60,00,000/- and also sanctioned credit facility under the head of secured overdraft for a sum of Rs.15,00,000/-, vide sanction letter, dated 14.5.1997.
7. At the time of availing the said credit facilities, t
