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2010 Supreme(P&H) 3011
PUNJAB & HARYANA HIGH COURT
Rakesh Kumar Garg, J.
Punjab & Sind Bank
Versus
Balraj Singh
R.S.A. No. 2659 of 2010,
Decided On : NOVEMBER 10, 2010
The main legal point established in the judgment is that the burden of proof lies with the plaintiff to establish the due execution of guarantee documents, and failure to do so can result in the dismissal of the suit against the guarantor.
Headnote:
Guarantor - Recovery Suit - Ex.P7, Ex.P20 - The court discussed the documents of guarantee executed by respondent No.3 in favor of the appellant for securing the loan amount. The court found that the appellant failed to prove the due execution of the documents and that respondent No.3 denied standing as a guarantor. The court concluded that the findings were not based on inadmissible evidence and no substantial question of law arose.
Fact of the Case:
Plaintiff's second appeal challenging the dismissal of its suit for recovery against respondent No.3 (defendant No.3/ guarantor). Plaintiff alleged that defendants No.1 and 2 availed a loan facility from the appellant-bank and defendant No.3 stood guarantor. Defendants defaulted in payment, and the appellant filed the suit. Defendants No.1 and 2 did not appear, and respondent No.3 denied being a guarantor.
Finding of the Court:
The trial Court decreed the suit against respondents No. 1 and 2 but dismissed it against respondent No.3. The lower appellate court partly accepted the appeal, and the plaintiff-bank approached the Court with two points. The Court dismissed the appeal against the findings of the trial Court and upheld the dismissal of the suit against respondent No.3.
Issues: The main issue was whether the judgment and decrees of the Courts below dismissing the suit against respondent No.3 were in accordance with the law.
Ratio Decidendi: The court found that the appellant failed to prove the due execution of the guarantee documents and that respondent No.3 denied standing as a guarantor. The court concluded that no substantial question of law arose.
Final Decision: The Court dismissed the appeal, upholding the dismissal of the suit against respondent No.3.
Rakesh Kumar Garg, J.
1. This is plaintiffs second appeal challenging the judgment and decrees of the Courts below whereby its suit for recovery against respondent No.3 (defendant No.3/ guarantor) was dismissed.
2. As per the averments, respondents No. 1 and 2 availed a loan facility from the appellant- bank on execution of documents in favour of the appellant- Bank. It is the further case of the appellant that defendant No.3/ respondent No.3 stood guarantor. Defendants No.1 and 2 did not adhere to the financial discipline of the Bank and failed to pay the instalments of loan as per agreement and defaulted in the payment. Hence, the appellant- Bank was forced to file the instant suit. It is the further case of the appellant that the officials of the appellant- Bank visited the village of the defendants and it came to their notice that the respondents have committed a fraud with the Bank and have forged and fabricated the documents showing them the owners of the agricultural land but actually they were not owners of the land. A complaint with the police was also filed in this regard, on which CJM, Hisar vide his order dated 6.8.2004 directed the police to register a criminal case. Hence, the cause of action had arisen to the appellant to file the instant suit.
3. Upon notice, defendants/ respondents No.l and 2 did not appear and were proceeded against ex parte.
4. Respondent No.3 appeared and filed written statement raising preliminary objections. On merits, it was submitted that respondent No.3 neither offered nor agreed to become guarantor of defendants No.l and 2. In fact, the officials of the Bank were aware that defendants No.l and 2 did not own land allegedly mortgaged by them with the Bank. All other averments were denied and dismissal of the suit was prayed.
5. No replication was filed by the plaintiff- appellant to controvert the submissions made in the written statement of respondent No.3.
6. On the basis of pleadings, the following issues were framed:-
1. Whether plaintiff bank is entitled for recovery of Rs.75,511/- alongwith interest, as prayed for?OPP
2. Whether the suit of plaintiff is not maintainable in its present form?OPD
3. Whether the plaintiff have no cause of action or locusstandi to file present suit?OPD
4. Whether the suit of plaintiff is not properly valued for the purpose of court fees and jurisdiction?OPD
5. Whether the civil court at Hisar had got no jurisdiction to try and entertain present suit?OPD
6. Whether the plaintiff has not come to the court with clean hands, if so, to what effect?OPD
7. Whether suit of plaintiff is time barred?OPD
8. Whether the suit is bad for non-compliance of provisions of Order 7 Rule 1(J) of CPC?OPD
9. Relief.
7. The trial Court after considering the evidence adduced by the parties and after hearing learned counsel for the parties decided Issues No.1 to 3 in favour of the appellant- Bank whereas Issues No.4 to 8 were decided against defendants being not pressed and suit was decreed with costs only against respondents No. 1 and 2 and against dealing officials of the Bank and the suit was ordered to be dismissed against respondent No.3. The operative part of the decree passed by the trial Court reads as follows:-
"This suit is coming for final disposal before me (R.P.Goyal, HCS, Addl. Civil Judge (Sr. Divn.), Hissar in the presence of Shri S.K. Mittal, Advocate for the plaintiff. Shri P.K.Aggarwal, Advocate for the defendant No.3, defendant No.l and 2 already exparte.
It is proved that the suit of plaintiff succeeds and same is hereby decreed with costs against the defendant No.l and 2 and against dealing officials of the bank as referred to above and the suit of the plaintiff bank is dismissed against defendant No.3. A decree for recovery of Rs.75,511/- along with interest @ 13% per annum with half yearly rests from the date of filing of suit i.e. 19.08.2004 till its actual realization is hereby passed against defendants No.l & 2 and both the officials of the b
