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CALCUTTA HIGH COURT
Debangsu Basak, J.
The South Indian Bank Ltd. —Plaintiff
versus
Messrs. Shroff Credit Co. & Ors. —Respondents
C.S. No. 836 of 1990
Decided on 11.3.2014
For the Plaintiff :Mr. S. Sengupta and Mr. A.K. Gandhi, Advocates.
IMPORTANT POINT
Defendant is liable to pay under Hire Purchase Bank Advance Guarantee Policy.
Headnote:Civil Procedure Code, 1908—Order 37 Rule 1—Money suit—Hire-Purchase— Defendant duly executed Hire Purchase Bank Advance Guarantee Policy—Defendant failed to pay in terms of such guarantee—Guarantee was for sum of Rs.4,00,000/-—Plaintiff was entitled to a decree—Suit decreed with interest and cost of Rs. 50,000. (Paras 9 to 11)
Result: Suit decreed with costs.
Debangsu Basak, J.— The suit was for recovery of money lent and advanced and for declaration. The Defendant No. 1 was a partnership firm of which the Defendant Nos. 2 and 3 were partners. The Defendant Nos. 5, 7, 9, 11, 13 and 15 were the hirers of the vehicles from the Defendant No. 1 and the Defendant Nos. 6, 8, 10, 12, 14 and 16 where the guarantors for the payment of the dues to the Defendant No. 1. The Defendant No. 4 issued a Hire Purchase Bank Advance Guarantee Policy dated November 9, 1987 for Rs.4,00,000/- in favour of the plaintiff.
2. The Defendant No. 4 filed written statement only. None of the defendant, however, appearing during hearing. The witness of the plaintiff proved the documents executed by the defendants. Such documents were marked as Exhibits. It was prayed on behalf of the plaintiff that, decree be granted as prayed for in the plaint.
3. The Defendant Nos. 2 and 3 were the partners of the Defendant No. 1. The Defendant No. 1 was a partnership firm. The Defendant No. 1 was a constituent of the plaintiff. The Defendant Nos. 1, 2 and 3 approached the plaintiff for cash credit hire purchase facility which was granted. In consideration thereof the Defendant Nos. 1, 2 and 3 executed several documents in favour of the plaintiff. The Defendant Nos. 1, 2 and 3 also agreed to hypothecate by way of first charge in favour of the plaintiff all motor vehicles belonging to them then and, thereafter, coming into their custody for security of the credit facility.
4. The Defendant Nos. 1, 2 and 3 executed and submitted a demand promissory note, instrument of hypothecation of vehicles, security bond regarding the vehicles, letter of continuity, assignment of debts and irrevocable power of attorney in favour of the plaintiff. These documents were dated November 20, 1987. By the Demand Promissory Note dated November 20, 1987 the Defendant Nos. 1, 2 and 3 agreed to pay interest at the rate of 16.5% per annum with quarterly rest.
5. The Defendant Nos. 5, 7, 9, 11, 13 and 15 obtained vehicles on hire from the Defendant No. 1. The Defendant Nos. 6, 8, 10, 12, 14 and 16 were guarantors for payment of the dues to the Defendant No. 1. The Defendant Nos. 1, 2 and 3 made over such documents executed by the said defendants in favour of the plaintiff.
6. The Defendant Nos. 1, 2 and 3 defaulted in payment of the installments agreed. The plaintiff, therefore, issued notices to the defendants by letters dated October 21, 1989, March 31, 1990, August 7, 1990, September 20, 1990 and October 12, 1990. In spite of due receipt of such letters, none of the defendants paid the plaintiff.
7. The statement of account duly certified under the Bankers Book of Evidence Act was marked as Exhibit ‘T’. By such statement of account, a sum of Rs.5,62,209.05p. was due and payable by the defendants to the plaintiff as on October 23, 1990. The deed of hypothecation and the other documents executed in favour of the plaintiff entitled the plaintiff to declaration as prayed for.
8. The Defendant Nos. 5, 9, 11, 13 and 15 as hirers were liable to the plaintiff. The Defendant Nos. 6, 8, 10, 12, 14 and 16 as guarantors were also liable to pay the plaintiff.
9. The Defendant No. 4 duly executed the Hire Purchase Bank Advance Guarantee Policy dated November 9, 1987. The Defendant No. 4 failed to pay in terms of such guarantee. The guarantee was for the sum of Rs.4,00,000/-. The plaintiff was, therefore, entitled to a decree in terms of prayer (c) of the plaint against the Defendant No. 4.
10. There will be a decree for the sum of Rs. 5,63,209.05p. against the Defendant Nos. 1, 2, 3, 5 to 16 jointly and severally. The defendants agreed to pay interest at the rate of 16.5% per annum with quarterly rest and penal interest at 2% per annum on default. Such defendants are liable to pay the plaintiff interest at the rate of 16.5% per annum on and from October 23, 1990 until payment.
11. The plaintiff would also be entitled to a decree in terms of prayer (e), (f) and (g) of
