M/S Agro Private Ltd vs Karnataka Bank Ltd on 13 July, 2009

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Karnataka High Court

M/S Agro Private Ltd vs Karnataka Bank Ltd on 13 July, 2009

Bench: N.Kumar, A.N.Venugopala Gowda

xx mm mm: count or xaaxarnm AT  ' 

Dated this the: 13"' day ofduly,  V 
PRESENT  V Q
THE HOWBLE MR. Jumcﬁ   :2 %
AND,_  _ " L 3  
THE HOBFBLE MR. Jua.' z_':m: %'_;§..1}:;  GOWDA

REGULAR F1Rgf'AF§§gégL..r§g. §é5;};f'2oa1

BETWEEN :

1 M113, Ag_m"P._::i1(V it:  _ _'
"Agm HO11€§€f"   %    _
No.225,__1;a1bag1:'ia:iias:a;a:;"ize:ad
Bangalcre --~», 560 03?  

~Eﬂep1*B3ented "'|:ryi its ¢ .
A A %._Ditﬁ'tof_  _____ ..
'  » Smty. 'Bhavani Gautham
:  " _.W;'<;_i''Iatz:;  Mahau
= ".-'~.'sge<i' '6.3Yé-a'rs

V    Gautham

 Wig: late G M Mcahan
* x L Aged" about 63 yeam
, _ ﬁftsixling at No.55?
"Bib Fskmk, Jayanagar
Bangakzxsse -~ 1% 041 ...Appe1Iam;s

(By Sri M R Ravindra, Advocate}



AND;

Karnataka Bank Ltd.,

K G Road

Bangaiort: -- 560 009

Respmsented by

Manager, A Shivaram

Sfo late Sh ysn  b --   , 
Aged about 50 years  " ;.'. Riaspsungientwv V  ' 

(By Sr} N Rajanna, Ad§r:1p§it;:A.for   
M] as Udaya Ho-Ila 65 Asm*>g:iates,~._Advpcai":ea}:   
This RFA ﬁled u11cIe1f..O1'd:::*"4i _:I%iii¢:..1 r/twmﬁon 95 01'

cm against the gudmentkagaa  1-2000 passed

in as No,916[':i 95é§4 Gf the  Additional Qity Civil

Judge, _:si1it for money.

 RFA " on for heating this day,

V.  .5. the foﬁawing ;

s 

" 'V  ; L'F3;xi3V'a;:apcal is pmfermd by dcfe:nﬁa:ats 1 and 2 again' at

  and dmma of the (Smart 'vein-W which has decrwd

" suit of tha plalntiﬁ for recovery <::f Rs, 82,62£},7() with

'4 «interest at 18%: pa. 



1'

DOT and 30 cartcms of carbaryal situated at the  

the ﬁmt defendant at No.28, Lalbagh   \ 

favmtr m" the plaintiﬂi The  
Karnataka Insecticides and  "Eh-'en
matmials was handed over to    ﬁrst 'V

defendant ext:-outed the pksdgc ieitérftig"  91«1 I';2;'i498O,

4. The strand £1e£s:id;aﬁiV  of the first
defendant    ,a  vanbus credit
facilities V. {be  giérgxsggigng second defendant
herein   by deposiﬁng the title
deeds  ~pmpmy with the p].aintiﬂ"--bank.

The déﬁpﬂﬁii {if   was conﬁzmed by the second

J €E?'f}'3':";i'.5;33'3*."*'i?Y"'  a memorandum datmd 4,10.19'?4.

,~ 3  4 are the owners of the pmpcrties situated

at   Periyapatua Talulk, Mysore DiSt['.iCi, ﬁﬂiy

 , d;sc:ibed ;;:a schedule 'C', 'D' and 'E'. They have mortgaged the

   in favour sf ths plainﬁﬁ an 16.7.1973 by depositing

 %%%*ihe"Jsazig'na1 title. deeds fuﬁy dam-ibm in schedule 32*: 'G' and

   V'.Iri" as sccuzzity tmvarda the ioanfcmdit faciiiiies grantw or to

be gmted by the piainﬁﬂ"-bank to the ﬁxst defendant, A

M/X.



memorandum was also cxecuteci in this aregani  

Plaintiff has sci: out the details of the moﬁqgagﬁg  " 

defendant has conﬁrmed the balancir;   
25,2, 1931 admitting the §aba1tyTv:g%&pay'ra §um of»iés,;   ': »
as on 3132,1930. The said  is'   balance,
sheet of the ﬁrst defcneriaxﬂéaas  31 , I%'7;1§8O as Rs.
63,690,35. In spite of   by the
piainﬁﬂ bank,     Themfom, the:
plainﬁﬁ got  10.2.1984 calling
upon the,'   cf Rs, 76,353.90 along
with mterés: éai;    1983 ten the date of payment.

A completa §ta._1; em: n{__ éf b'ac;:§<:eunt extracted ﬁom the Ledger

.Agmug~£.,  of ﬂi¢;:« ..1_r;s}mnﬁif~bank majntama in the usual

 _vcrf..:;_:s.%EsI:1&S,E.t;¢ss and duly certiﬁzd by the Manager as

    Bankers Beak Evidence Act is also

V pmducgédf  the clafrzndarnt is iiablar to pay Rs. ?'6,353.90

 'ini¢£;rcSf theme}; foam 1,1€},I983 up to that data of suit, in

   The ﬁansacﬁon is commercial in nature and,

VT wjzhertfam, dcfcmiani is Liable 13:; pay 2(7f?f-E: intemsf. p.a'.

 3 "'i'h c:reforc:, the piainﬁﬂ" ﬁled the suit for maovexy of

K/.,.,



Ox

Rs.82,62G.7O with intcxtst at 2994: 13.21.; fur sale of  

'A', 'C', 'B' and 'E' prcrperﬁcs and for paymcntgf. _ 

and far a ﬁlrthcr direction to sell 

payment of iutcrcst.

5. After service " of   elltered
appeamnce. Defendants     statement which
was adapted by defendant%  admitiﬁd
the loan    yam" 1974 by the
plaintiff.    bank has not givczr;
credits {3.3i.'V).H   amount at all. They
ésnied h%i2i§1g  of Rs, '?'2,0(}{J/ -- to the full

extcnt._--T1::¢ h*4fa£1§igcr'vi3fAi;hfr; §iainti1':'f--bank got mg signamms of

  i-,'"éefe:«1datiV£  scvcrai forms which were blank.

 in them they have signm the documents.

Théy  iheir sigatums on the pledge ietter dated

'1.,g,2.198f.},  'They cnntended that the geods pledged wam in the

   of the plainﬁg-hank and it was 0111531 :9 the plaintiﬁ"

  agismse of the gmds in their paasession if at an an}; amcxunt

  ﬂwaés due from the ﬁrst defendant. The piajntiﬁ" has net given

credit ta the value of the goods which warm in their passessicrn,

\/



'-»J

The second defsndant (icnied the eX€';{':t1f.i0;i'- .'

memorandum of deposit of title {leads dated  V¥_Th«r:=: .¢  

cxtaﬁon of equitable mortgage   elf V' 
Defendants 1, 3 and 4 admittwjlaat  
in 'C', 'D' and 'E' wens '~3_6.?..v.l9'.7S' fhe 
piainﬁﬁ as security tewaﬁig'   to
the defendants, Hoiavcver;  to pay the
suit  of _Iv%.?4;'«3:.§~ :»_7,,6»2=;;i)AV.V"zV"t::'.');_::V:::  x  the balance
conﬁrmation    defendant, it dues
not m¢3:a11_.that_ the canecmess of
the amoims 4':1;¢" plajntiﬁl They denied the

ceneemess Véf7._4th::  by the piajntiﬁi They

_..  "tcr acvefai.  bans of the defendant with the

  VA. 1i§'e;,: _ gzontzzmied that the: defendants have

 just to suit their convenicmm. Their

 _gievaix€:¢:':  fiﬁat the plainﬁﬁ has not ﬁnnishcd tha fail

.4 H "  %i€3;iam"éﬁs ordered by the Cnurt in 1:113 mnnmtcd suit, 0,3.

 :~é¢;:~,k§:3§/34, They reserved mg liberty to ﬁle: additional written

  _4'staté:m&nt after pa1'i:ia:11IaI's an: fmmshed, They denied the

E/%



liability and scmght for diamissal Of the suit. 2 " V
5. On the aforesaid pleadings, the ma:  _

following issues; ~

1 Whether the pzainnyypzgyegzngz  ﬂag  ,
fuily curaiied ;as¢?2§ooe;}:> V "   %

2 Whether the V'£i§£11?_th:3 ﬁr;§.£ defendan£
executed :13 the    paras 5 and 6
0fthe:3.§5'e:1§?:t/    ---  V " 

3  .1)'-ﬁx   grgzié' that they have cieared £113
 the V pf3a:.'ig:uS«_. . Iocms sanctianeci by the

  Eifhetﬂér' «plainaﬁpmzzes ihai second defendanf

_V  gzofigﬂged 'A' scizeciulgz property by way of

 '  for :11? the Ems/mm: faczﬁiies granted :9

_ isziefendani by it and exeaxteai the mgmarmzdum
  gfzizze cfeeds dated 44 0-19:?4.:>

Whether the ;:I£tini2ﬁ°prm:m that that ﬁrai defendant
has mn_,ﬁ'nne::£ the baictzarzae and exemted the
baiczzme aorgﬁmzaiion fetter?

: ' I  'I

n/%



5 Whether the defendcmis pmve that the pzagnzfjrjhas
not gizmn aetiits on many occasions to ixh¢£f.'i 
mxaount and has not given credit to ihg3:'vaf_i:1{év:.£)f  
goods in its passassian?  V 'V V. 

*-2

Do the defendmzts prays  

limitation and there;'s.g.u;» cx:1;i3 e"Qf  
8 What relief or Order?   J

7, C311 behalf of  Rémcsh Rag was

examrxd ed as    1:11 was exazmruzzd

as PW2.   which wcm marked as
Exs. 91 tic;  iginf "the defendants, the secand

defendant~Si11f. Bha§aniCrazﬁihagsa was examined as DWI. N0

 »{ipcu331¢i*;%?€:§$_:$£*€%_re  on behalf of the defendants.

     :31} appmciaﬁon of tha aforesaid oral

  and  evidence cm mcrcrni held that, the plainﬁﬁ' has

_.  tfzsaf' the ﬁmt ﬁefendam: has availed Rs.72,00(}[ -, the

  jaén. _ag§5.::.m;n:. It furtimr held thai: the plajntiﬁ has proved the

K "--."V«:e:).§§f.1§u1:i(311 of 4313 the dacuzmmts by the éiafendants. The matexial

  ;i:;rI3 1ea:4::1'd, in particular the plcadingﬁ between the. parties

clearly shew the ziefezndants have cicared 31} the pmvi0113 loan

\/\



except the goods in qucstimza. The piaintiif has 
the second defendant has moltgaged 'A'  _  
favour of the plai11tiﬂ' as a security fog;  iichaﬁsl  
granted to the first defendam; and  
execlttcd the memorandtlm of   
HOFFCVE-I, the p1aintiﬁ'~ba'i11§  csﬁbﬁsﬁvj that the
properties mcnﬁoned in    'E' schedule an:
mtxrtgaged to thy.   transaction:

As the  ilfhat' the defendants were
having a~ansaéti§:1;";v;5:h "é;'1:»1t3Dp«I':';ii1::;*iﬂ:t)a11k since 1974 and a
martgagzéivv-Afdesﬁi :"€X}Bf_;1It€£i in the year 1974, the

plaintiﬁ ma§% %141:e-43%;  of the miginai titie. dexsds in

 "of 'Cr', x*3.}"--»  'E' scheduie pmperﬁes; may may

 fthc said preperties in their possession but

t§cr?§ i§~ ~'t..o'V"indic/ate that the said pmptjzrﬁes were oﬁemd

 as  "viii: the repayment of the loan in question;

"   piainﬁﬁlbank is net gnijthnd to prczmeed against

 pﬁrperﬁes for I'€CDV{'31'jIlg tha auit ekim. It 11611:! DWI, the

  defenéant has admittcd the siglatnrtsz of G.Me:a-ban, her

 "E1usba1:.t.ei, in £1x'P8 and, thcnzforey the: haiance conﬁmaaizien

V %



11

letter is pmved, ii htzid the defendant has failed ta establish
that the plaiuﬁﬁ" has my: gven credits on many occasiggtjas to
the ovarciraﬁ; aczcotmt and the value of the g9ods_  
possessicnn. It held that the suit is in time.   A.
no speciﬁc plea anti an issue was  4pm§}ébij,;  " "
of arg1.u:11e:;nt, whcu it was mntendtﬁ  
which warm pledged in ihﬁ possrissign     4
the terms of the agrettmtznt they   :s;e31 i§:1e gcmds
and recover the pmemds %:3¥i¢1   suit luau
Uansaeiion whichxight «is.  612"  under ﬁﬁon

168 of   have failed and negiectcd to

perfcrzm theiir4__ob1igé:f:l§$ﬁ s; ffigxnésiequcntiy 'there: is negligence on

 their,,wh.ic3:i'  1'? ::m3i:t3d in loss to the defendant and,

   the piaimiﬂ has. to adjust the value?: of the

_§::ii"tfiic:y am iiabie to inciemnjﬁr the: defendant for

V V' _ the Iié:--g1iggé1i<:?::"'C.au3ed and, ihmtsfomi it was mntendwd that the

"   igng: entiﬂmi :3 the suit ciaim. Tm learned a-1:31

  Qonsidemd the said ccymtgnﬁons put fznrth by

  that; defmdam: with refemnm t9 the sfiamtmy pmvisions and

" f:he Variwmls judgmcnis reliaei upon and has held that evidence



on record clearly discloses at no point of time the defendant
Iequcated the plaintiﬁ ti} 3211 the pledged gcpods. no;*"----,';}1ey
requested the bank to adjust the sale proceeés cxf
tgvwards the suit claim and an the eentrary there-«gig ag  
clause in the agztsczmmxi; when: it  t  u
bank: wiil not be iiabitz to any V1035    
which is in their passessm, "rhjeL§3§;%;.;s, ii: ma. Eiéiéndjadnts 
oanncst set up as a dcfencxt. to dgf-§2:i"L_thé~~ 'o'f--the:§p}ai11tiﬁ'.
Thersfore, it pmoeeded Vtﬁr V 1';as$ a sum of Rs.

43,609/--,v.'aith_A§3:::§§;wéés:;: at ~; $% ézaﬁxpounded quaI't€~I'1Y from
1.

1, 193135531 'th¢:V§i%2;té:'c::;f' % 5: aim directed tan 36:11 the 'A' scheciuie prcipgfbg of the defendant not paying '(ha . (i€43IEiL'3.¥{%.I§k311Ilt 260}. 'I'he Cimgrt also ptzrmitted it: 56!} tim pledged gcsaeds towaxds mcovezy of in so far as the request of the p1am' iiﬁ to V VV sell oiher it was rejected, Aggricved by the send' j1%i.:ig1:1§:ntV'aJ1;:d decmxz of the trial €30-art, the defendants are in 9, Thtif leaned munsei far the appeﬁant assaiijng the impugned juégament and degree mate-:n::ie£i that, the Egan R/% ﬂansacﬁon is not in dispute. His goods which wart'. all perishable:-. in nature: In vzierw (Inf {pf _¢ Cantxact Act there. was an o}3]iga§iiV<':A:;3':'t;1?,.v £1151' u pIainﬁﬁ~hank to 3611 those. plcdggd gﬁxjdﬁétnd tn»; proceeds towarcis the 193351. {}1J13ik<%«%,.:§': ﬁ.thc c\?::_1V_1t"A-rihf 'gaﬂmount VV Itsmajning outstaxzdjng t13ir:~..;§efe;:tiéI1ffg3;is. Vagxfpbligation to pay the said amount, 1% Vr;;'¢it;,- ﬁhem is a clause:

in the agtcm§;1£:--Lfa}s9, has not pezforsased such .03 their part retaining the gt:-Qdg. seek for recovery cf the amoﬁgt as in the case: of LALLAN pmsm ANOSHER [gaze .196?' sc _1322;,?«~9th:rV'jii--.:i:5@§;7:t$ Qf thus various High Courts to that 'A€ha;§'éfQ:vr$, ha submits the decree. mquims 121:: be set '~10, 'I3c:3n*:'¥:§}13st1~a§ the: learned counsel for the mspondcni; ' é " 'T 1 ' -- ..s;i1;}p;9I1:ezd.' Q16 impu ﬂed 3'11d%en"£, 'V...

14 I L Pram the afemsaid material on record mntenﬁons, the points that arias for our consi.(1ér2s:tiG;t;"~iit ibis _& appeal are as under ;---

(:1) Whether' the plainﬁﬂ-Vfbagk    L'
obiigation or Q    sell the
pierdged    saié proceeds

tawczrdsjhe ,r%¢>;f:gng,g,;;.;¢4:; not ent1'ti¢2d to the amount due "1:,:;_er§ in the possession of the giitnfgzsgggatéqgigg, = goads beoome useless, is the 7 mzzjc gézdemmfy the defendant-baiior?

« V' " cxzaunsel for the appeiiant referred to the agifcment hcixaimn the parties, the evidence on .v1~g,CC1I{'i" £55 39 called admissions of PWSI and 2 and V' "';3§;:j:tg:;1_:;Ia;c;;iV"a3dmitt;zx3.1y that pfmziged azrticlea went. in possessieﬁ 9f jj_t.h'i::«Iiia:ik, The bank did mzrt sell the pledged axﬁcles within T and did not adjust the 3336 prcxzaeenzis towards the 19311 n u :t:ra11smtir_)11 and thus the plainﬁﬁ is discnﬁtied from c1a1m' ing éebi denying the piedge, and it i$ found that he 1123.3 given passtassian (if the goods pledged and had retained ihe sazne, the pawner has ﬂu-3: righijiai redeem. the goods so pledged by paynwrzi --1- ' debt. If the pawnee fa nm in a position % the gaads he cxzmnoi have ba1h .'-éhe debicmd-1.11.50 the ge?¢;*(:I»5;,» V 3 :4, Thereferm, from the Js.'éat;éx: by the Supreme Ccmrt it is the ;(;a i§13*Qt goods as Wei} recmrer the amaumi V iitﬁvcive-:*,Vi&§:§e1;'.'.§1e ﬁles the suit fer gledged azﬁcles 3'3} the amcrunt is paid he is under a legal Qbﬁgatigan to' Liﬁﬁun Therefore, the said judgment 4 has nﬁapjéﬁiicgaﬁoizh xasv-.é:3,~1'_his Qasrz the bank has never refused 7'i',Q' Momover in the instant case though ﬁle V baﬁiihhad Va sell tbs plégdgcd articles it was "under no '<3biiga§c:1;:V"'vi;3 hdﬁo the 333113 in spite {If the aforesaid' statutmy V' gimizisiqn as well as a oavcnant between the paﬁticts. It is a K -.A1r'1ig;'?':1£ 's:;?}A:1i1::};1 is vested in the bank, if may chase to exemism T I they could haw exercised, By not 8X€?;{'CiSiI}g their right 'ﬁzey did not 1936: the right to ﬁle miit for mmvcxy Of the amount; in fact it was apex: to the defendant _ Was: made to repay the said lean araeunt, fhf. ., piaiutiﬁ to sell the pledgmi articles 'the':

towards ﬁlm I031} or request the to "

sell the pledged azﬁclcs by 4;.'as:x--¢.:np'"c'=;4'r.':Vz§:i'I";:'3J;g 1 in VV handing over tim ariiclcits; "ss:3 t11éfﬁi.'iil'i§;;--.:':gfF-3VL1£f"Q$)BSfl#,(£i£éi'&iv1i)I} (pf the said pledged mﬁcles mm ' by the bank primaxily foam money maid have bexzm adj§1$z'€éf.gaiV .jg§_n::§ansacﬁ9n. The. evidence

91." DW1 C}P3é3i1";I_'§-f.Viif§'E'.%§;'a$jv.l:.f,%!v.';'.*¢¢3.'?s'%jG:;3'I#c£§§i£'ﬁI1€St was made, no such demand .t::i1cuu1stanc::2s, it cannot be said that méirslg? piainﬁﬁ-bank did not choarse: to iheﬁiletiged é';I'fitTv§:1§V';§§Wa:T£1(i adjust the sale proceeds tawartis V. they have lost their right to ﬁle the suit. In th £i.;t_ ﬁgiaiter, we de not ﬁnd any merit in any of the m1:1teﬁ'§:ic»Ir.s. befon: us. The triai Court on careﬁxl " séﬁﬂaiéexﬁﬁzsh of the pkaadmgs, the @121 and domimenmry on I\'3vE:C§I!1L affififi' referriiilg "£9 the vagrieus judmcnts at the Bar cm behalf of both tiw parties, has passed a {}:»13$id¢:1'e{i judgnazmt and demm which is based on legal 'V1/..

evidence which Suﬁsm from 1110 inﬁrmity. In that vial? of the.' matter, no case for izntczfcrencc is made out. Hence, the ' is dismisscti, Pazties to bear their own msts. ski] --

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Karnataka High Court

M/S Agro Private Ltd vs Karnataka Bank Ltd on 13 July, 2009

Bench: N.Kumar, A.N.Venugopala Gowda