Gauhati High Court
Paresh Chandra Banik vs State Bank Of India And Anr. on 3 December, 2004
Equivalent citations: (2005)1GLR656
JUDGMENT H.N. Sharma, J.
1. This first appeal arises out of judgment and decree dated 24.8.1996 and 28.8.1996 respectively passed by the learned Civil Judge, Senior Division, South Tripura Udaipur in Title Suit (Mortgage) No. 31 of 1992, decreeing the suit of the plaintiff-Bank passing a preliminary decree with cost. The appellant herein was impleaded as Defendant No. 2 in the suit, who was the guarantor in respect of the loan, availed by the Defendant No. 1. The Defendant No. 1 loanee who availed the loan from the Bank has not challenged the impugned judgment and decree which was passed exparte against him.
2. The case of the plaintiff-Bank is that on the prayer of the Defendant No. 1 Shri Subash Saha, the Bank sanctioned a loan for a sum of Rs. 1,44,900 in his favour for purchasing a truck and assessories for carrying out transport business, inter alia on condition that the Defendant loanee would repay the same on equal monthly installment of Rs. 5,500 and the first monthly installment to be paid to the Bank on 13.10.1981. It was further stipulated that the loan amount would carry interest at the rate of 15% per annum with quarterly rest. As a security for due repayment of the aforesaid loan the loanee/Defendant No. 1 executed necessary document in favour of the plaintiff Bank as per requirement of the Bank. The Defendant No. 2, who is the present appellant in this appeal stood as a guarantor for the Defendant No. 1 for due repayment of the loan with interest and executed necessary deed of guarantee on 13.7.1981, in case of default on the part of the Defendant No. 1, loanee, to repay the loan amount to the plaintiff-Bank. The Defendant No. 2 also executed an equitable mortgagee of landed property belonging to him, which is described in Schedule 'B' of the plaint in favour of the plaintiff. The loan amount was disbursed on 14.07.1981 and the Defendant No. 1 purchased a vehicle bearing registration No. TRL-2855, Model 1210-SE/42 Chassis No. 344077 1 028446, Engine No. 692001109291 and hypothecated the said vehicle in favour of the plaintiff-Bank by executing a deed of hypothecation. The defendant defaulted in payment of the monthly installment and failed to repay the loan amount as per the terms and conditions of the sanction of the loan within the stipulated period in spite of repeated demands made by the plaintiff-Bank and accordingly as on 29.01.1991 the loan and interest accrued thereon stood at Rs. 2,67,646.40. In spite of demand made by the plaintiff-Bank by publishing notice in the local newspaper, defendant did not repay the loan amount. It was also within the knowledge of the Bank that the vehicle in question was in the custody of the Defendant No. 2 the present appellant. The Defendant No. 2 with a view to obtain clearance certificate under Motor Vehicles Act requested the Bank to issue a clearance certificate in his favour and for that purpose he also deposited some amount but he also failed to liquidate the entire outstanding dues of the plaintiff-Bank. It is the further case of the plaintiff that on 23.4.19.90 the Defendant No. 2 informed the Bank that it is not possible on his part to take the vehicle repaying the huge outstanding amount of interest and in the said letter he admitted that he paid some amount to the plaintiff-Bank for getting the clearance certificate. Again on 16.4.1991 the Defendant No. 2 requested the plaintiff-Bank to transfer the loan account in his favour and also to provide a suitable reduction of the interest, which is against the terms of the loan. In the aforesaid premises, filing the said suit the plaintiff-Bank inter alia prayed for a decree against the defendants for realisation of the sum of Rs. 2,67,646.40 with interest accrued thereon till repayment for a preliminary mortgage decree with costs and subsequent interest and in default, to pass a final decree in preliminary form for sale of the mortgaged properties for satisfaction of the decree.
3. The Defendant No. 2 contested the suit by filing written statement whereas the suit proceeded exparte against the Defendant No. 1, who preferred not to appear in spite of service of notice. In the written statement the Defendant No. 2 it is inter alia stated that the suit is bad for breach of contractual obligation by the plaintiff-Bank and it is not maintainable under the present form and also bad for non-joinder of necessary parties and hit by principles of waiver and acquiescence. In the said written statement the Defendant No. 2 admitted the fact of granting loan to the Defendant No. 1 but he pleaded that on the verbal assurance by the Branch Manager of the Bank, the defendant deposited some of amount towards the credit of the borrowers account to get a clearance certificate from the plaintiff-Bank to get necessary route permit to run the vehicle, but the plaintiff-Bank in defiance of their verbal assurance did not issue clearance certificate in favour of the Defendant No. 2 and, as a result of which he sustained huge loss. It was further pleaded that for breach of contract on the part of the plaintiff-Bank, the Defendant No. 2 could not get the route permit and for this reason he could not run the vehicle and as a result the defendant failed to liquidate the loan amount which stood outstanding in the name of the Defendant No. 1. It was further stated that he is ready to repay the outstanding balance standing the name of the Defendant No. 1 by monthly installment of Rs. 2,000 after the plaintiff-Bank issues the clearance certificate in respect of the said vehicle so that he gets the route permit to run the vehicle and in the aforesaid premises the Defendant No. 2 prayed for dismissal of the suit with cost.
4. Both the parties examined one witness in support of the irrespective cases. The plaintiff exhibited necessary documents relating to the loan transaction including the guarantee deed executed by the Defendant No. 2 appellant.
5. Upon pleadings of the parties as many as 5 issues were framed as follows :
(i) "Whether the suit is maintainable in its present form ?
(ii) Whether the suit is bad for defect of parties?
(iii) Whether the claim of the plaintiff-Bank is correct?
(iv) Whether the plaintiff is entitled to get a decree, as prayed for?
(v) To what other relief/reliefs is the plaintiff entitled to?"
6. The learned trial Court on consideration of the materials available on record including the oral and documentary evidence and properly appreciating and scrutinising the same, answered the issue No. 1, 2, 3 and 4 in favour of the plaintiff-Bank. In answering issue No. 5 the learned trail Court held that the plaintiff is also entitled to the preliminary decree at that stage. Deciding the issues in the manner aforesaid, the learned trial Court ordered that the plaintiff is entitled to realise sum of Rs. 2,67,646.40 including interest both pendentilite and subsequent @ 15% per annum till the date of repayment on payment of additional court fee, if any, from the defendants and the plaintiff shall have a charge on the mortgage properties as described in the schedule 'A' and 'B' of the plaint against the decretal amount, and the defendants were directed to make payment of the decretal amount with cost of the suit within a period of six months and in default, the plaintiff-Bank shall have the right to apply for final decree for realisation of the decretal amount by sale of the mortgage property, and preliminary decree was passed vide judgment and order dated 24.8.1996.
7. We have heard the learned counsel appearing for the parties. Mr., S.M. Chakraborty, learned counsel appearing on behalf of the appellant has submitted that the Bank without trying to realise the money from the Defendant No. 1 who is the beneficiary of the loan has fallen upon the appellant who was only a guarantor of the loanee. He further submitted that the Bank charged higher rate of interest and in view of the failure of the scheme for which the loan was procured the court ought to have given some relief in payment of interest. Mr. Chakraborty, learned counsel for appellant, however, did not dispute the fact that the Defendant No. 2 i.e. the appellant was a guarantor of the Defendant No. 1 for due repayment of the loan amount with interest and costs and necessary deed of guarantee was executed by him.
8. We have carefully considered the submissions made by the learned counsel for the parties and also gone through the documents and materials available on record including the evidence adduced by the parties. In this case the Defendant No. 1 obtained a Medium Term Loan amounting to Rs. 1,44,900 from the plaintiff-Bank for transport business and the Bank sanctioned the loan on certain terms and conditions. Vide Ext. 1 the Defendant No. 1 executed the deed of agreement incorporating the necessary terms thereon Vide Ext. 4 the Defendant No. 2 appellant executed a deed of guarantee binding himself to repay the amount with costs on 13.7.1981 in favour of the plaintiff-Bank. At Clause 2 of Ext. 4 the rate of interest was mentioned. The appellant has not denied his liability as a guarantor, in fact, he has admitted the same. Section 128 of the Contract Act specifically provides that the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract (Ref. AIR 1969 SC 297) and he is discharged only on discharge of the principal debtor i.e. the loanee. In the instant case the Ext. 4 Deed of guarantee is very specific which incorporates the necessary terms. The Defendant No. 1 who is the principal loanee did not contest the suit and he is not discharged from the liability of the Bank. In that event, the appellant is not entitled to be discharged by virtue of his making payment of some amount towards the loan account for getting a route permit in respect of the vehicle, thus, the submission of the learned counsel for the appellant in this count does not hold good.
9. Regarding the next alternative submission of the learned counsel for the appellant that the court ought to have granted some relief in payment of the interest inasmuch as the scheme for which the loan was sanctioned was not successful. The appellant in his written statement has not taken such a plea. Mr. Chakraborty, learned counsel for the appellant has referred a case reported in AIR 1998 SC 1101 (N.M. Veerappa v. Canara Bank) in support of his contention. In the instant case, the rate of interest or any excessiveness thereof has not been challenged or taken up in the written statement by the defendant appellant. The rate of interest charged by the Bank is not to be subject to scrutiny by the courts. This provision is incorporated in Section 21A of the Banking Regulation Act, 1949 Act which was inserted by Banking Law (Amendment) Act, 1984. The case cited by Mr. Chakraborty was instituted prior to the aforesaid amendment. It is not for the Court to change the rate of interest when the parties agree to it and the interest claimed by the Bank is not to be reopened on the ground that the rate of interest charged by the Bank in respect of the transaction is excessive.
10. Accordingly, we do not find any merit on the submission made by the learned counsel for the appellant. However, it is still open for the appellant to approach the Bank if he is so advised for suitable relief on account of interest and it is absolutely within the domain of the Bank to grant such relief or not and not for the court to direct.
11. In view of the aforesaid discussions, we do not find any merit in this appeal and, accordingly, the same is dismissed. No costs.