Bangalore District Court
Canara Bank vs Smt.Vimala G.Pai on 30 September, 2015
IN THE COURT OF THE 42nd ADDL. CITY CIVIL & SESSIONS
JUDGE AT BANGALORE CITY (CCH.NO.43).
PRESENT: Sri. LEKKADAPPA JAMBIGI,
B.Com., LL.B.(Spl),
42nd ADDL. CITY CIVIL AND
SESSIONS JUDGE, BANGALORE.
Dated this the 30th day of September 2015.
O.S.No.2712/2009
Plaintiff:- Canara Bank,
A Body Corporate Constituted
Under the Banking Companies
(Acquisition and Transfer of
Undertakings) Act 1970,
Having its Head Office at J.C.Road,
Bangalore - 560 002 and
One of it's Branch Offices
At No.473, 13th Cross, 4th Phase,
Peenya Industrial Area,
Bangalore-560 058,
Represented by its Manager
Sri.M.G.Sai.
(By - Sri.V.Haridas Bhat, Adv.)
v.
Defendants- 1. Smt.Vimala G.Pai,
W/o.Sri.B.G.Pai,
Aged about 59 years,
No.A-106, (B), 3rd Main,
Peenya 2nd Stage,
Bangalore - 560 058.
2. Sri.B.G.Pai,
Since deceased by his LRs
2 O.S.No.2712/2009
2(a). Smt.Renu V Naik,
D/o. late B.G.Pai,
Aged about major,
Residing at Flat No.106,
"RMV Clusters"
2nd Stage, Lottegollahalli,
Bangalore - 560 094.
2(b). Smt.Reshma P.Prabhu,
D/o. late B.G.Pai,
Aged about major,
Residing at Flat No.106,
"RMV Clusters"
2nd Stage, Lottegollahalli,
Bangalore - 560 094.
(Defs. -Sri.P.Suresh Prabhu, Adv.)
Date of institution of the suit : 15.04.2009
Nature of the suit : Recovery of Money
Date of commencement of : 15.03.2011
Recording of the evidence
Date on which the Judgment : 30.09.2015
was pronounced
Total Duration : Years Months Days
06 05 15
(LEKKADAPPA JAMBIGI)
42nd ADDL. CITY CIVIL & SESSIONS JUDGE,
BANGALORE.
3 O.S.No.2712/2009
JUDGMENT
This is a suit instituted by the plaintiff for recovery of amount of Rs.5,86,820/- with interest at the rate of 17.5% p.a. compounded with monthly rests from the date of the suit till realisation with costs.
2. The brief facts of the plaintiff's case are as under:-
It is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings Act, 1970, having its Head Office at J.C.Road, Bangalore branches are at other places. The defendant No.1 is the Borrower. The defendant No.2 is the Guarantor. The defendants are the husband and wife. In the year 2005, the defendants have approached the plaintiff bank for Cash Credit Facility upto the limit of Rs.5,00,000/- and Term Loan of Rs.2,00,000/- for the business of defendant No.1. The defendant No.2 stood as Guarantor. The plaintiff bank has sanctioned Cash Credit Facility upto the limit of Rs.5,00,000/- on 29.07.2005. In this regard, defendant No.1 has executed request for over draft facilities and also pronote and Cash Credit Agreement. The defendant No.1 4 O.S.No.2712/2009 has agreed to repay the same with interest at the rate of 12% compounded quarterly and also agreed to pay 2% penal interest. The defendant No.1 has availed and utilized the said Cash Credit Facility. As security for the same, defendant No.1 has hypothecated the raw materials, finished and semi finished goods in favour of plaintiff bank.
The plaintiff bank has sanctioned Term Loan of Rs.2,00,000/- on 29.07.2005. In this regard, defendant No.1 has executed loan agreement. The defendant No.1 has agreed to repay the same in 24 monthly instalments of Rs.8,400/- and one instalment of Rs.6,800/-. The defendant No.1 has agreed to pay interest at the rate of 12% compounded quarterly and also agreed to pay 2% penal interest. The defendant No.1 has availed and utilized the said Cash Credit Facility. As security for the same, defendant No.1 has hypothecated the machineries purchased by her. The said Term Loan has been repaid by defendant No.1.
The defendant No.2 has executed Guarantee Agreement promising to indemnify the bank against all 5 O.S.No.2712/2009 losses and to pay and satisfy the bank, due from defendant No.1, upto the limit of Rs.7,00,000/- together with interest at the rate of 14% p.a compounded quarterly.
On 07.04.2007, at the request of the defendants, cash credit limit of Rs.5,00,000/- was renewed and in this regard, defendant No.1 has executed letter of renewal, through which she has confirmed that all the documents and securities shall remain in force and continue to be in force. The defendant No.2 has given letter stating that Guarantee Agreement dated 29.07.2005 executed by him shall remain unaffected, be in force and continue to be available on the same terms and conditions. On 07.04.2007, defendant No.1 has executed Letter of Revival, through which she confirmed that the plaintiff bank has granted to her the credit facilities. Further, defendant No.1 as and when required by her, requesting the plaintiff bank orally or in writing to allow her the temporary overdraft beyond the sanctioned limit of cash credit. The defendant No.1 is in the habit of issuing the cheques and requested the bank to honour them even though the sanctioned limit had already been crossed. The plaintiff bank permitted the 6 O.S.No.2712/2009 defendant No.1 from time to time to overdraw the account and avail the over draft facility beyond the sanctioned limit.
After availing the temporary over draft, in July 2008 defendant No.1 informed the plaintiff bank that some of the cheques issued by her had been forged by her accountant - Sri.Aswath and furnished the list of the cheques and claimed that by those cheques Sri.Aswath has misused the money. The signatures found in the disputed cheques tally with the signatures of defendant No.1 found in the letters addressed by her and also other undisputed cheques issued by her. The plaintiff bank has produced the alleged cheques. On perusal of the all the letters and cheques, it would be clear that signatures appearing in the disputed cheques are the signatures of defendant No.1 herself. In view of the over drawings and non-servicing the loan, the account of defendant no.1 was classified as Non-Performing Asset. The defendants have failed to regularize the account. The defendants failed to comply with the demand made by the plaintiff bank. As the date of the suit the defendants are jointly and severally liable to Rs.5,86,820/-. 7 O.S.No.2712/2009 Hence, this suit is filed for recovery of the same with interest.
3. After service of summons the defendants have appeared and filed the written statement. The defendants have denied the allegations of the plaint. It is stated that the suit of the plaintiff is false, frivolous and not sustainable. The suit is bad for non-joinder of necessary parties. One Sri.Aswath, who is an employee of defendant No.1, has misused the cheques and colluding with the bank officials the said Sri.Aswath has withdrawn and mis-utilized the amount. Hence, said Sri.Aswath is a necessary party to this suit. Hence, the suit is not maintainable. Further, it is stated that the plaintiff bank officials have joined their hands in withdrawing the amount by Sri.Aswath and they have passed the cheques which have been forged by said Sri.Aswath. Hence, the bank is not entitled for any of the reliefs. The defendant No.1 after coming to know debit entries made by the plaintiff bank enquire with the plaintiff bank and issued letter to stop dealing with the account in the name of defendant No.1. In the meanwhile, the bank has operated the account and debit entries have been 8 O.S.No.2712/2009 shown in the account of defendant No.1. The forged cheques have been honoured by the bank employees and they are negligent in dealing with the cheques. Hence, in this regard the bank employees have joined their hands with Sri.Aswath, but the bank has not taken any steps against the said bank officials. 13 cheques have been presented by Sri.Aswath and they have been honoured by the bank. Hence, in this regard amount of Rs.8,10,000/- has been paid to said Sri.Aswath. The bank has allowed the withdrawal of the amount more than the sanctioned limit to the defendants. Hence, this also goes to show the negligence of the plaintiff. The signatures of defendant No.1 does not tally with the Specimen Signatures kept in the bank. Even then the cheques have been honoured. This is also negligence on the part of the bank. The bank has purposely honoured the cheques. In this regard, the debit entries made in the account of defendant No.1 are reversed and amount is to be paid to defendant No.1 by the bank. In this regard, the defendants have claimed counter claim of Rs.11,57,200/- by dismissing the claim of the plaintiff bank. 9 O.S.No.2712/2009
4. The plaintiff has filed the rejoinder to the counter claim, denying the allegations of the counter claim. The bank has honoured the cheques. It is denied that defendant No.1 has not signed on the cheques. After verification, the bank has honoured the cheques and paid the amount. Hence, the defendants are liable to pay the suit claim to the plaintiff bank. The defendants have taken up the false contention in their written statement and claimed counter claim, same is not sustainable. Hence, on these grounds it is prayed to dismiss the counter claim and to decree the suit.
5. On the basis of pleadings above, the issues and additional issues arisen for consideration are as under:-
ISSUES
1. Whether the plaintiff proves that defendant No.1 has availed Cash Credit Facility of Rs.5,00,000/- and Term Loan of Rs.2,00,000/- from the plaintiff on 29.07.2005 on the co-obligation of defendant No.2 for her business?
2. Whether the plaintiff proves that defendants have agreed to pay interest at 10 O.S.No.2712/2009 the rate of 12% p.a. on the Cash Credit Facility and Term Loan and overdue at the rate of 2% in case of default?
3. Whether the plaintiff proves that the defendants were in due of the suit amount?
4. Whether suit of the plaintiff is bad for non- joinder and mis-joinder of the parties?
5. Whether suit of the plaintiff is barred by limitation?
6. Whether the plaintiff is entitled for recovery of the suit amount from the defendants as prayed for?
7. What order or decree?
ADDITIONAL ISSUES
1. Whether the defendants prove that 13 entries listed by them in Annexure-
Document No.1 to the written statement are unauthorised and without mandate of defendant No.1?
2. Whether the defendants are entitled for recovery of counter claim amount of Rs.11,57,200/- from the plaintiff along with interest at the rate of 17.5% p.a. from the date of counter claim?
3. Whether the suit of the plaintiff is not maintainable for non-certification of statement of account as required under the 11 O.S.No.2712/2009 provisions of the Banker's Book of Evidence Act 1891?
6. To prove the case of the plaintiff, the plaintiff examined in all 2 witnesses as PW-1 and PW-2 and marked Ex.P1 to P48. On the contrary, the defendants have examined 2 witnesses as DW-1 and DW-2 and marked Ex.D1 to D11.
7. I have heard the arguments.
8. My findings on the above said issues and additional issues are as follows:-
Issue No.1:- In the affirmative.
Issue No.2:- In the affirmative.
Issue No.3:- In the affirmative.
Issue No.4: In the negative.
Issue No.5:- In the negative.
Issue No.6:- In the affirmative.
Addl.Issue No.1:- In the negative.
Addl.Issue No.2:- In the negative.
Addl.Issue No.3:- In the negative.
Issue No.7:- As per final order.
12 O.S.No.2712/2009
for the following:-
REASONS
9. Issue No.1 to 6 & Addl.Issue No.1 to 3:-
As these issues are interlinked, I answer them together. The plaintiff has filed the suit for recovery of amount. The plaintiff contends that defendant No.1 is the Borrower and defendant No.2 is the Guarantor. The defendant No.1 has availed Cash Credit Facility and Term Loan from the plaintiff bank. The bank has go on honouring the cheques issued by defendant No.1 and as on the date of the suit, the account extract discloses that there is due amount of Rs.5,86,820/- from the defendants. The defendants have denied these allegations. The defendants contend that the cheques are not issued by defendant No.1. One Sri.Aswath, who was an employee of defendant No.1, has misused the cheques by forging the said cheques. He has forged signatures of defendant No.1 and presented nearly 13 cheques to the bank. The bank is going on honouring the cheques and paid the amount to said Sri.Aswath. Hence, misusing of the cheques is on the part of said Sri.Aswath. For the acts of Sri.Aswath, the bank 13 O.S.No.2712/2009 employees have given scope and they have honoured the cheques. In this regard, there is defect on the employees of the plaintiff bank and due to their negligent act amount has been paid to Sri.Aswath. The amount is not received by defendant No.1. Hence, defendant No.1 is not liable to pay the suit claim to the plaintiff bank. It is also stated by the defendants that they have filed complaint against Sri.Aswath in respect of forgery of the cheques. Hence, said Sri.Aswath is a necessary party in this case. But it can be seen that the bank has filed the suit for recovery of the amount, wherein defendant No.1 is the Borrower and defendant No.2 is the Guarantor. The bank has to proceed against the Borrower and Guarantor. The bank is not expected to proceed against the employee of defendant No.1. There may be defects by the employee of defendant No.1, but that would not create any liability against the employee. There is no relationship regarding loan between the employee of defendant No.1 and plaintiff bank. Hence, contention of the defendants that Sri.Aswath is a necessary party, does not holds good. If at all, if there is any mistake 14 O.S.No.2712/2009 on the part of said Sri.Aswath, the defendants can proceed against said Sri.Aswath.
10. The defendants' counsel vehemently argued that the plaintiffs have not included the firm as a party. Hence, it is misjoinder of necessary party. Anyhow, on perusal of the records, defendant No.1 is the Proprietor of the firm and the cheques are in the name of the firm represented by the Proprietor. Hence, no harm would be caused if the firm is not made as party. Anyhow, the transaction was taken place between defendant No.1 and the bank and as such, the contention of the defendants that firm is not made as party is not acceptable.
11. To prove the contention of the plaintiff bank, 2 witnesses are examined. PW-1 is the present Bank Manager. The plaintiff bank has also examined one Retired Senior Officer as PW-2. PW-1 states in respect of amount borrowed by the defendants and the documents executed by the defendants in favour of the plaintiff bank. In the evidence of PW-1, he has reiterated the averments of the plaint. This witness is cross-examined at length. The 15 O.S.No.2712/2009 plaintiff bank has filed the suit on the basis of the account extract, which is marked as Ex.P15. The learned counsel for the defendants vehemently argued that the account extract is not certified by the bank and as such, same is not sustainable. But subsequently the certified account extract has been produced by the bank and it is marked as Ex.P48. The learned counsel for the defendant vehemently argued that even Ex.P48 - account extract is not in accordance with law, as it is also not certified by the person, who has taken the account extract. It is the computerized copy. Computerized copy is to be certified first by the person who takes the copy and then the Bank Manager has to certify the same. But there is no certification by the person, who has taken the copy from the system. Hence, the account extract is not proved by the plaintiff.
12. In this regard, the defendants' counsel has relied upon the Banker's Books Evidence Act - Definition Clause, wherein the certified copy has been defined. It is vehemently argued that as per the said provisions, the account extract is not certified and as such, it is not a certified copy. But the word used in this case is the bank 16 O.S.No.2712/2009 official may put his signature. No doubt, the bank has to certify it. Hence, there is certification by the Bank Manager. As such, the contention of the defendants that Ex.P48 is not a certified copy is not acceptable.
13. The learned counsel for the defendants has relied upon the decision reported in AIR 1967 Supreme Court Cases 1058, in between Chandradhar Goswami and others v. Gauhati Bank Ltd., wherein the lordships have observed that:
(A) Evidence Act (1872), S.34 - Banker's Books Evidence Act (1891), S.4 - Entry in bank's books of account - Mere entries from bank's books of account or mere copies thereof are not sufficient to charge person with liability except where person concerned accepts correctness of entries.
No person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business. There has to be further evidence to prove payment of the money which may appear in the books of account in order that a person may be charged with liability there under...
17 O.S.No.2712/2009As per this decision the bank has to prove regarding payment of amount then only the entries made in the account extract can be relied upon for fixing the liability of the defendants. But, anyhow, account extract discloses regarding transaction between defendant No.1 and the plaintiff bank. The court has to see whether there is proof in respect of payment or not. But, so far as the entries in the account extract are concerned, are then proved by producing the certified copy of the account extract.
14. Further, the learned counsel for the defendants has relied upon the decision reported in II (2003) BC 96 (DRAT/DRT), in between State Bank of India v. Rizvi Exports Ltd., wherein the lordship has held that certificate is required for account extract. But as per Ex.P15 there was no certificate, but same has been corrected by producing Ex.P48, which is the certified account extract. Hence, defendants' argument is not acceptable.
15. He has also relied upon the decision reported in Manupatra/AP/1062/2003, in between Indian Bank v. V.R.Venkataraman and others. In all these decisions the 18 O.S.No.2712/2009 lordships have given guidelines in respect of obtaining the certified copy of the account extract from the original kept in the bank. The sum and substance of the argument is that, the account extract first should bear the certificate. The certificate is not there and the mistake of the bank in producing the certified copy of the account extract has been rectified by producing Ex.P48 and also by examining PW-2. Hence, the defendants' argument that the account extract is not acceptable does not holds good.
16. PW-1 is the Manager of the bank and he states in respect of Cash Credit Facility and Term Loan sanctioned to defendant No.1. The Term Loan sanctioned to defendant No.1 has been repaid by defendant No.1. The Cash Credit Facility is sanctioned to defendant No.1. In this regard, there is due amount. The defendants have taken up the contention that, employee of defendant No.1 has misused the cheques by forging signatures of defendant No.1. In this regard, PW-1 is cross-examined at length. It is elicited that the Specimen Signature Card is not produced by the bank. Further, it is elicited that all the cheques shown in the account extract have not produced by the bank. PW-1 19 O.S.No.2712/2009 admits this aspect. But it is not necessary that all the cheques shown in the account extract are to be produced by the bank. The account extract is the transaction made by defendant No.1 with plaintiff bank. On the basis of the said transaction, the plaintiff bank has filed the suit. Hence, nothing is cross-examined in respect of authenticity of the account extract to PW-1. Hence, in the absence of any such cross-examination or in the absence of anything elicited in the cross-examination of PW-1, the contention of the defendants that the account extract is not tallying with the original is not acceptable. In what way the account extract is wrong is not elicited by the defendants. Anyhow, the account extract is kept by the plaintiff in their regular course of business. As per the Banker's Books Evidence Act the certified copy of the account extract is admissible in evidence. Under such circumstances, on the basis of the transactions effected in the account extract, the plaintiff bank has filed the suit and in this regard PW-1 has given evidence.
17. Further it is cross-examined to PW-1 that the signatures on the cheques are not the signatures of 20 O.S.No.2712/2009 defendant No.1. In this regard, expert opinion is also produced. But, anyhow, the court has to consider whether there is liability of the defendants or not. The defendants have obtained the Cash Credit Facility from the plaintiff bank and on the basis of the cheques issued by defendant No.1, the bank has released the amount and as such, there is proof in respect of withdrawal of the amount by the defendants. The defendants have not filed any objection to the bank stating that the cheques of defendant No.1 have been lost or they have been misused by the employee. No doubt, complaint has been filed against one Sri.Aswath as contended by the defendants in the written statement in respect of forgery of the cheques. That itself goes to show that the amount from the bank has been withdrawn. The excess amount has been taken by the defendants and the account extract clearly discloses this aspect. It establishes the liability of the defendants. Hence, these aspects are stated by PW-1 in the cross-examination.
18. Further, to prove the account extract which is certified by the bank, PW-2 is examined. In the evidence of PW-2, he states that he has certified the account extract at 21 O.S.No.2712/2009 Ex.P48 and produced it before the court. In the cross- examination of PW-2, it is elicited that the forged cheques as stated by the defendants also depict in the account extract. But it is not specifically cross-examined, which are the forged cheques and which are the genuine cheques. Hence, in the absence of such specific evidence, the contention of the defendants that the account extract does not disclose the true picture is not acceptable.
19. On the contrary, the defendants have examined 2 witnesses. The defendant No.1 is examined before the court, wherein she has reiterated the averments of the defence taken by her in her written statement. She is cross-examined at length, wherein it is elicited that she is doing business. Further, it is elicited that her husband was also doing business. She admits that she used to entrust the work to withdraw the amount to Sri.Aswath. But she denied that the cheques are not forged documents. The learned counsel for the plaintiff tried to elicit from the mouth of this witness that she signed the cheques at Ex.P27 to P32, but she denied. She admits her signature on the last cheque. Anyhow, she admits the seal upon the cheques 22 O.S.No.2712/2009 belongs to her company. It is elicited that she used to keep the cheque leaves in safe locker and nowhere she states that the cheques kept by her have been lost. Hence, in the absence of such evidence, the contention of defendant No.1 that her cheques have been lost and she has not signed 13 cheques is not acceptable. Anyhow, she has given the letter to the plaintiff and prior to that already the transactions were taken place. Anyhow, in respect of forgery of the cheques complaint has been filed by DW-1 against Sri.Aswath.
20. The defendants have also examined DW-2. DW-2 is the handwriting expert, but he is not the person, who examined the cheques personally. One Sri.K.Lakshminarayana has examined the alleged forged cheques. The said Sri.K.Lakshminarayana is dead. Hence, the defendants have examined DW-2. DW-2 states that as per the report he is stating that the signatures on the cheques are not the signatures on the admitted documents. He is not having any interest in the matter. He states that sometime there will be natural variation when a person 23 O.S.No.2712/2009 signs his signature by sitting or standing and there may be variation in the signatures on several occasions.
21. On perusal of the evidence of the defendants, the defendants have taken up the defence that they have not taken the Cash Credit Facility from the plaintiff bank. The plaintiff bank has produced the documents in respect of the application filed by the defendants along with documents, wherein the Cash Credit Facility has been given defendant No.1. The defendant No.2 stood as Guarantor. These aspects are proved by the documentary evidence. The contention of the defendants is regarding forgery in their business establishment. The cheques have been forged by Sri.Aswath, who is an employee of defendant No.1. Hence, on this contention, the defendants have contested the matter. The plaintiffs have produced 6 cheques, which have alleged to have been forged. But in the evidence of PW-1 he states that those cheques have been debited in the account. Hence, with these grounds the defendants challenged the genuinuity of the account extract. The act of forgery or other things are the subsequent events. They are come to the light on the basis of the complaint filed by 24 O.S.No.2712/2009 defendant No.1. But the complaint and other progress of criminal cases are not before the court. This court is concerned regarding credit facility given to defendant No.1. The defendants are permitted to withdraw the amount more than the balance standing in their account. It is the process of Cash Credit Facility. It is the contention of the defendants that they have not given any direction to Sri.Aswath or bank to withdraw the amount. But this contention is only the oral say of the defendants. There is every chance that the defendants are entitled to speak this fact to escape from the liability. No doubt, the defendants have also claimed counter claim in this case stating that said Sri.Aswath has withdrawn the cash by forging the cheques. If at all, the defendants have aggrieved by the acts of said Sri.Aswath, they are entitled to proceed against said Sri.Aswath. The bank is expected to consider the credit facility given to the customer and to recover the same. The Cash Credit Facility has been given to defendant No.1 and account of defendant No.1 has been debited whenever amount has been withdrawn on the basis of the cheques. The learned counsel for the defendants vehemently argued 25 O.S.No.2712/2009 that the banks are keeping Specimen Signature Card and after verifying, they are honouring the cheques. There are nearly 13 cheques have been forged. But all the cheques have been honoured by the bank and in this process the bank has not doubted a single cheque. Hence, this aspect is having support of the bank officials. Without the help of the bank officials, said Sri.Aswath is not expected to use the forged cheques. Hence, the bank is not entitled for recovery of the amount. But this argument is not acceptable. Because Sri.Aswath is not a stranger, he is an employee of defendant No.1 and as per say of defendant No.1, said Sri.Aswath is used to visit the bank and withdrawn the amount. No doubt, in the cross-examination defendant No.1 does not admit this fact. She states that she herself used to go to the bank personally and deal with the withdrawals. But it is only an oral say of the defendants. Generally defendant No.1 used to take assistance of the employee to deal with the bank transactions. But, anyhow, to avoid the same, there are chances of deposing falsely. Considering these aspects, from the documents produced by the plaintiff, there is proof 26 O.S.No.2712/2009 in respect of Cash Credit Facility given by the bank to defendant No.1. The defendant No.2 stood as Guarantor for the said Cash Credit Facility and the amount has been withdrawn by defendant No.1 regularly. The account is the running account and in this process, defendant No.1 has withdrawn the amount more than the debit in their account and as on the date of filing the suit, the debit shown in the account extract discloses the liability of the defendants i.e., to be paid to the plaintiff by the defendants. These aspects have been established by the plaintiff bank. The transaction is well within time. There are Letter of Revival and Letter of Renewal, which save the limitation. Considering these aspects, the bank is able to prove that defendant No.1 has obtained the Cash Credit Facility and defendant No.2 is the Guarantor for the same.
22. From the oral evidence of the plaintiff there is proof in respect of Cash Credit Facility taken by defendant No.1 on the guarantee of defendant No.2. The plaintiff bank has also produced the documents. The defendants have disputed the ledger extract, but same has been rectified by producing Statement of Account at Ex.P48. It 27 O.S.No.2712/2009 discloses in respect of amount drawn by defendant No.1. The plaintiff bank has produced some of the cheques in respect of transaction regarding withdrawal of the amount. Hence, these documents disclose in respect of Cash Credit Facility obtained by defendant No.1.
23. The defendants have taken up the contention in respect of 13 cheques that there is forgery. But it is only the contention taken in the written statement. This aspect is to be established by the defendants by producing cogent materials. The defendants have produced the opinion of the handwriting expert. It is in respect of 44 cheques. The said cheques are in respect of firm of defendant No.2. There was separate transaction between defendant No.2 and the plaintiff bank and in that respect the DRT has proceeded to pass the orders. But that transaction will not come in the way of the plaintiff to claim the suit claim. Even the defendants have not produced the said 13 cheques. They have not produced any complaint filed against Sri.Aswath. As per their contention, Sri.Aswath was an employee of defendant No.1 and he has misused the cheques. But in respect of this contention, the defendants have not 28 O.S.No.2712/2009 produced neither the cheques nor the forgery committed by Sri.Aswath. Hence, the plaintiff bank is able to prove the loan transaction and there is also proof in respect of due amount by the defendants as claimed in the suit.
24. The plaintiff has claimed future interest at the rate of 17.5% p.a. and it is the agreed rate of interest and future rate of interest would be 17.5% p.a. The defendant No.2 is the Guarantor and his legal heirs have been brought on record. The liability of the legal heirs of defendant No.2 is limited to an extent of properties inherited by them from defendant No.2.
25. The defendants have to prove in respect of counter claim. If the plaintiff is not able to prove its case, then the burden is on the defendants to show regarding liability of the plaintiff bank to defendant No.1. It is the contention of defendant No.1 that Sri.Aswath has misused 13 cheques and he has withdrawn the amount of the said 13 cheques. Hence, the burden is on the defendants to establish this aspect. But the defendants have not produced any documents and they have not proved that 29 O.S.No.2712/2009 said Sri.Aswath has forged the cheques. In the absence of such evidence and proof, the contention of the defendants remained without proof.
26. The learned counsel for the defendants has relied upon the decisions reported in:-
1. AIR 1956 Mysore 9, in between K.Malaiah v.
State of Mysore.
2. AIR 1999 Gujarat 108 in between Ashok Kumar Uttamchand Shah v. Patel Mohammed Asmal Chanchad and
3. AIR 1987 Supreme Court 1603 in between Canara Bank v. Canara Sales Corporation and others.
In all these decisions, the lordships have given guidelines that the court can compare the disputed and admitted signatures and find out regarding forgery. In the present case, the bank has produced several cheques at Ex.P27 to P32 and it is contended by the defendants that the signatures on these documents are forged one. But the defendants have not made any efforts to prove this contention. Hence, the dictum laid down by the lordships in the aforesaid rulings is not applicable to the present facts of 30 O.S.No.2712/2009 the case. The defendants have contended in respect of 13 cheques, but those cheques are not produced before the court. Hence, in the absence of said cheques, forgery cannot be ascertained. Considering these aspects, the defendants have failed to prove their defence. On the contrary, the plaintiff is able to prove its case. Hence, the suit is liable to be decreed by rejecting the counter claim of the defendants. Accordingly, I answer Issue No.1 to 3, 6 in the affirmative, Issue No.4, 5 and additional issue No.1 to 3 in the negative.
27. Issue No.7:- In view of my above discussion, I proceed to pass the following:
ORDER Suit of the plaintiff is decreed with costs. The defendants No.1, 2(a) and (b) are jointly and severally liable to pay a sum of Rs.5,86,820/- (Rupees five lakh eighty six thousand eight hundred and twenty only) with future interest at the rate of 17.5% per annum from the date of suit till realisation.31 O.S.No.2712/2009
The liability of the defendants 2(a) and 2(b) is limited to the extent of properties inherited by them from defendant No.2.
Counter claim of the defendants for recovery of Rs.11,57,200/- is dismissed without costs.
Draw decree accordingly.
(Dictated to the Judgment Writer, typed by her, the transcript thereof corrected and then pronounced by me, in open Court, this the 30th day of September 2015).
(LEKKADAPPA JAMBIGI) ND 42 ADDL. CITY CIVIL & SESSIONS JUDGE, BANGALORE.
ANNEXURE I. List of witnesses examined on behalf of:
(a) Plaintiff's side:
PW.1 - Sri.S.C.Nag PW.2 - Sri.K.V.Prabhu
(b) Defendants' side:
DW.1 - Smt.Vimala G Pai DW.2 - Syed Asgar Imam 32 O.S.No.2712/2009 II. List of documents exhibited on behalf of:
(a) Plaintiff's side:
Ex.P1 Request for over draft facilities Ex.P2 Cash Credit Agreement Ex.P3 Pronote Ex.P4 Deed of Hypothecation Ex.P5 Agreement Re:Collateral Security Ex.P6 Particulars of machinery etc., hypothecated Ex.P7 Letter of Undertaking Ex.P8 Guarantee Covering Letter Ex.P9 Guarantee Agreement Ex.P10 Letter of Renewal Ex.P11 Letter from the Guarantor Ex.P12 Letter of defendant No.1 Ex.P13 Letter of Revival Ex.P14 Letter of the plaintiff Ex.P15 Statement of Account Ex.P16 Application for Credit Facilities Ex.P17 Letter of Proprietorship Ex.P18 Application for Credit Facilities Ex.P19 to 22 Letters of defendant No.1 Ex.P23 Letter to Police Station Ex.P24 & 25 Letters of defendant No.1 Ex.P26 Letter of the plaintiff Ex.P27 to 32 Original cheques Ex.P33 to 47 Cheques Ex.P48 Statement of Account
(b) Defendants' side:
Ex.D1 List of 13 forged cheques
Ex.D2 Details of interest calculated by DW-1
Ex.D3 Copy of Legal Notice
Ex.D4 to 6 Postal Receipts
Ex.D7 UCP
Ex.D8 to 10 Postal Acknowledgements
33 O.S.No.2712/2009
Ex.D11 Letter
42nd ADDL. CITY CIVIL & SESSIONS
JUDGE, BANGALORE.
34 O.S.No.2712/2009
(Judgement pronounced in the open
Court and order portion of the same
is extracted as under)
ORDER
Suit of the plaintiff is decreed with costs.
The defendants No.1, 2(a) and (b) are jointly and severally liable to pay a sum of Rs.5,86,820/- (Rupees five lakh eighty six thousand eight hundred and twenty only) with future interest at the rate of 17.5% per annum from the date of suit till realisation.
The liability of the defendants 2(a) and 2(b) is limited to the extent of properties inherited by them from defendant No.2.
Counter claim of the defendants for recovery of Rs.11,57,200/- is dismissed without costs.
Draw decree accordingly.
(LEKKADAPPA JAMBIGI) nd 42 Addl.CC& SJ, Bangalore.