Delhi District Court
Brij Bhushan vs Anju Panwar on 31 August, 2023
CS SCJ 91/21
BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
IN THE COURT OF MS. KANIKA AGARWAL, CIVIL
JUDGE-01 (SOUTH) SAKET COURT, NEW DELHI
Civil Suit No :- 91/21
CNR No :- DLST03-000006-2021
SH. BRIJ BHUSHAN
S/o Sh. Jagbir Singh
R/o 13, Chirag Delhi
New Delhi-110017 ......PLAINTIFF
VERSUS
1. SMT. ANJU PANWAR
W/o Late Sh. Rakesh Panwar
R/o 220-A, Village Shahpur Jat,
New Delhi-110049 ......DEFENDANT NO.1
2. MASTER YUGANT PANWAR (Through his mother/
natural Guardian Smt. Anju Panwar)
S/o Late Sh. Rakesh Panwar
R/o 220-A, Village Shahpur Jat,
New Delhi-110049 ......DEFENDANT NO.2
3. MASTER GARBHIT PANWAR (Through his mother/
natural Guardian Smt. Anju Panwar)
S/o Late Sh. Rakesh Panwar
R/o 220-A, Village Shahpur Jat,
New Delhi-110049 ......DEFENDANT NO.3
SUIT FOR RECOVERY OF RS. 1,38,000/-
JUDGMENT:
Page no. 1 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
1. This is a civil suit filed for recovery of Rs. 1,38,000/- along with interest @ 24% p.a. from the date of its actual deduction till the date of realization. It is pertinent to mention that the plaintiff has filed four civil recovery suits arising out of the same transaction against the defendants. Further, vide order dated 26.03.2022 passed by Ld. Predecessor, the four civil suits bearing no. CS SCJ 279/18, CS SCJ 198/19, CS SCJ 623/20 and CS SCJ 91/21 (captioned suit) were consolidated into main suit bearing no. CS SCJ 279/18. However, perusal of the case files pertaining to above mentioned four suits reflects that documents placed reliance upon in each suits are several and distinct from each other and even the issues were framed separately in all the above mentioned civil suits, therefore, in order to avoid any confusion and for sake of convenience of all the stake holders, the, court deems fit to pass separate judgments in the four civil suits bearing no. CS SCJ 279/18, CS SCJ 198/19, CS SCJ 623/20 and CS SCJ 91/21 (captioned suit).
AVERMENTS OF THE PLAINT: -
2. Briefly, it is averred in the plaint that plaintiff is employed with Delhi State Cooperative Bank limited, Chirag Delhi and that the late husband of the defendant no. 1 and father of defendant no. 2 and 3 namely Mr. Rakesh Panwar was the colleague of the plaintiff in the said bank. It is stated that plaintiff and the husband of defendant no. 1 and father of defendant no. 2 and 3 had family relations for past 15 years and in January 2016, on inducement of Defendant no. 1 and her late husband, plaintiff Page no. 2 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
stood as a surety to the late husband of defendant no. 1 in loan taken by him in the form of Cash Credit Limit (hereinafter referred to as "CCL") to the tune of Rs.7,00,000/- under the Employee's Credit Card Scheme (hereinafter referred to as"ECC") from the bank.
3. Pursuant thereto, an application for ECC bearing no. 14510 having ECC A/c No.820 was filed and signed by the late husband of defendant no. 1 as an applicant and plaintiff as the surety. Apart from the application form, other documents such as undertaking/bond dated 04.02.2016 and 02.02.2016 were executed by Late Sh. Rakesh Panwer and the plaintiff respectively in respect of the CCL. Further, it is averred that the Cash Credit Limit under the ECC Scheme was duly sanctioned by the bank vide sanction letter bearing no. 325 dated 03.02.2016 for an amount of Rs. 7,00,000/- and an Employee's Credit card was handed over by the bank to the late husband of defendant no. 1. Plaintiff further averred that to the best of his knowledge, late husband of defendant no. 1 was regularly utilizing the funds from the employee's credit card and was also paying the requisite amount to the bank monthly. It is stated that after the demise of Sh. Rakesh Panwar on 31.10.2016, defendant no. 1 to 3 were left behind as legal heirs/successors to movable and immovable properties of Late. Sh. Rakesh Panwar.
4. It is stated that in March, 2017, plaintiff received a letter dated 15.03.2017 bearing DC No. 490 from the bank which was addressed to defendant no. 1 and copy of the same was Page no. 3 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
forwarded to the plaintiff also and through that letter, plaintiff came to know that after the death of Sh. Rakesh Panwar, defendant no. 1 to 3 have not made any payment of arrears/outstanding dues towards the CCL to the bank since the death of the applicant/Rakesh Panwar and as on 28.02.2017 a sum of Rs. 7,00,000/- towards principal and Rs. 35,362/- towards interest is due to the bank.
5. It is stated that Defendant no.1 had falsely assured the plaintiff that she will clear the entire amount. However, since the plaintiff stood as a surety to the late husband of defendant no. 1, bank started deducting a sum of Rs. 20,000/- from the salary account of the plaintiff bearing no. 031005000110 from 28.02.2017 onwards without prior intimation and till July, 2020 a sum of Rs. 8,48,000/- has already been deducted from the salary of the plaintiff.
6. It is further stated that an amount of Rs 2,20,000/- was deducted from the salary of the plaintiff for the period February, 2017 to December, 2017 and with respect to those deductions, the plaintiff had filed a civil suit bearing no 279/18 before this court only. Further, an amount of Rs 2,40,000/- was deducted from the salary of the plaintiff for the period January, 2018 to December, 2018 and with respect to those deductions, the plaintiff had filed another civil suit bearing no 198/19 which vide order dated 08.03.2019 passed by Ld. Principal District & Session Judge got transferred before this court. Further, an amount of Rs 2,50,000/- was deducted from the salary of the plaintiff for the period Page no. 4 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
January, 2019 to December, 2019 and with respect to those deductions, the plaintiff had filed another civil suit bearing no 623/19 which vide order dated 04.11.2020 passed by Ld. Principal District & Session Judge, South District got transferred before this court.
7. It is further averred that repeated requests and assurances, the defendants neither cleared the dues of the bank for the period January, 2020 to July, 2020 nor are paying to the plaintiff. Hence, legal notice dated 02.12.2020 was served by the plaintiff on the defendants for recovery of amount of Rs 1,38,000/-. It is stated that the defendants being the sole surviving legal heirs of Late Sh. Rakesh Panwar are jointly and severally liable to re-pay the amount paid by the plaintiff in discharge of its liability as surety. Hence, the present suit seeking recovery of amount of Rs 1,38,000/- paid by the plaintiff to the Delhi state cooperative society bank as surety is filed against the defendants. AVERMENTS OF THE WRITTEN STATEMENT: -
8. Per contra, defendants in their joint written statement have denied all the allegations and averments made by the plaintiff. It is stated that plaintiff as well as husband of defendant no. 1 were involved in illegal habit of gambling such as placing bets on IPL and other cricket matches since past many years and for that they used to borrow money from many people and were always in debt. It is further stated that plaintiff has not approached the court with true facts. It is stated that defendant no. 1 was never aware about the betting addiction of her husband and got to know Page no. 5 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
about it, from the friends and persons known to her husband after he committed suicide. Further, it is stated that since the plaintiff had stood as surety for her deceased husband and also executed an undertaking to repay the loan in case of failure by the principal borrower to repay, therefore, it is the liability of the plaintiff to discharge the said loan and no liability can be attributed to the defendant no.1 for the said purpose. In light of aforesaid averments, it is prayed that the present suit is liable to be dismissed.
REPLICATION: -
9. In replication, averments of the plaint have been reiterated and contents of the written statement have been denied. ISSUES: -
10. From the pleadings of the parties, following issues were framed by the Ld. Predecessor of this court vide order dated 16.10.2021.
Issue no. 1 Whether the defendants have illegally not made the payment towards CCL extended by DSC Bank under ECC Scheme vide sanction letter dated 03.02.16 for Rs. 7 lacs to the husband of D1 and father of D2 & D3 namely Rakesh Panwar? OPP Issue no. 2 Whether the plaintiff is entitled to recovery of Rs. 1.38 lacs on account of his capacity as surety to Rakesh Panwar from the defendants for the period 01.01.2020 till 31.07.2020? OPP Page no. 6 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
Issue no. 3 Whether the plaintiff is entitled to pendente lite and future interest? If yes, at what rate? OPP Issue no. 4 Relief.
PLAINTIFF EVIDENCE: -
11. To prove his case, the plaintiff himself stepped into the witness box as PW1 and tendered his affidavit as Ex.PW1/A. He placed reliance upon the following documents:
(i) Mark A i.e. The copy of application ECC bearing no. 14510 A/c no. 820 (subsequently changed to Ex. PW3/1 (colly) on 04.06.2022;
(ii) Mark B i.e. The copy of bond dated 04.02.2016 submitted by Rakesh Panwar (subsequently changed to Ex. PW3/1 (colly) on 04.06.2022);
(iii) Mark C i.e. The copy of bond dated 04.02.2016 submitted by plaintiff (subsequently changed to Ex. PW3/1 (colly) on 04.06.2022);
(iv) Mark D i.e. Copy of undertaking from the employer applicant dated 02.02.2016 submitted by Rakesh Panwar (subsequently changed to Ex. PW3/1 (colly) on 04.06.2022);
(v) Mark E i.e. Copy of undertaking from the employer applicant dated 02.02.2016 submitted by plaintiff (subsequently changed to Ex. PW3/1 (colly) on 04.06.2022);
(vi) Mark F i.e. The copy of letter dated 15.03.2017 bearing DC no. 490 issued by Delhi State Cooperative Bank Ltd. (subsequently changed to Ex. PW3/1 (colly) on 04.06.2022); Page no. 7 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
(vii) Ex. PW1/1 (Colly) i.e. The original statement of account issued by Delhi State Cooperative Bank a/c no. 031129000820 for the period of 01.01.2020 to 31.07.2020 and 01.01.2020 to 18.08.2020;
(viii) Ex.PW1/2 i.e. The salary slips of the plaintiff for the month of January, 2020;
(ix) Ex. PW1/3 i.e. The salary slips of the plaintiff for the month of February, 2020;
(x) Ex. PW1/4 i.e. The salary slips of the plaintiff for the month of March, 2020;
(xi) Ex.PW1/5 i.e. The salary slips of the plaintiff for the month of April, 2020;
(xii) Ex.PW1/6 i.e. The salary slips of the plaintiff for the month of May, 2020;
(xiii) Ex.PW1/7 i.e. The salary slips of the plaintiff for the month of June, 2020;
(xiv) Ex.PW1/8 i.e. The salary slips of the plaintiff for the month of July, 2020;
(xv) Ex.PW1/9 (Colly) i.e. The copy of plaint, affidavit filed in support and list of documents filed in CS no. 279/18 titled as Brij Bhushan Vs. Anju Panwar & Ors which is pending before this Hon'ble Court;
(xvi) Ex.PW1/10(Colly) i.e. The copy of plaint, affidavit filed in support and list of documents filed in CS no. 198/2019 titled as Brij Bhushan Vs. Anju Panwar & Ors which is pending before this Hon'ble Court;
Page no. 8 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
(xvii) Ex.PW1/11 (Colly) i.e. The copy of plaint, affidavit filed in support and list of documents filed in CS no. 623/2020 titled as Brij Bhushan Vs. Anju Panwar & Ors which is pending before this Hon'ble Court;
(xviii) Ex.PW1/12 i.e. Office copy of legal notice dated 02.12.2020;
(xix) Ex. PW1/13 to Ex. PW1/15 i.e. Three original speed postal receipts all dated 02.12.2020;
(xx) Ex. PW 1/16 to Ex. PW1/18 i.e. The three tracking reports of Speed post obtained by the plaintiff through internet with respect to the service of legal notice dated 02.12.2020; (xxi) Ex. PW1/19 (OSR) i.e. The copy of police complaint dated 10.02.2018;
(xxii) Ex.PW1/20 i.e. Original certificate for deduction of salary dated 31.07.2020 issued by the Delhi State Cooperative Bank Ltd from 01.01.2020 till 31.07.2020; (xxiii) Ex.PW1/21 i.e. Original no dues certificate issued on 03.11.2020; and (xxiv) Ex. PW1/22 i.e. Certificate under Section 65 B IEA.
12. Initially, the cross-examination of PW1/ Plaintiff stood deferred on 01.02.2020 at request of Ld. counsel for defendant. Eventually, the defendants had stopped appearing before the Court and accordingly, they were proceeded against ex- parte for non-appearance and their defence was struck off by Ld. Predecessor vide order dated 03.09.2022.
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13. The plaintiff had examined total six witnesses in support of his suit. PW3 Sh. Vivek Panwar Assistant Manager in Delhi State Cooperative Branch, Chirag Delhi was summoned to bring the complete record pertaining to loan account no. 031129000820 of Sh. Rakesh maintained with the bank by Late Rakesh Panwar. The witness had brought the original record of the said account and same was exhibited as Ex. PW3/1(Colly) and also brought statement of account of aforesaid account of Rakesh Panwar for the period of 04.02.2016 to 24.05.2022 which was exhibited as Ex. PW3/2 (colly).
14. PW3 Ms. Neha Shokeen Assistant Manager, from Delhi State Cooperative Branch, Chirag Delhi was also summoned with respect to gratuity account and leave encashment details. It is mentioned that two witnesses namely Vivek Panwar and Neha Shokken have been numbered same as PW3 , hence to avoid any confusion the serial number of the witness is not changed and reference to witness in the judgment shall be made through their respective names. The witness had brought the following documents:
(i) Ex. PW3/A (colly) i.e. being the attested copy of claim form for ground leave encashment scheme;
(ii) Mark PW3/B i.e. being the account statement of the Delhi State Cooperative Bank Limited for period 01.11.2016 to 17.01.2017;
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(iii) Mark PW3/C i.e. being the receipt from LIC regarding death claim under master policy no. 103000736 in the name of Rakesh Panwar along with one excel sheet;
(iv) Ex. PW3/D i.e. approval letter prepared in the case of death of Rakesh Panwar;
(v) Ex. PW3/E i.e. being the intimation letter sent to the LR of deceased Rakesh Panwar namely Anju Panwar regarding adjustment of claim of Rakesh Panwar in the CCL account of Anju Panwar bearing no. 031056000015; and
(vi) Ex. PW3/F (colly) i.e. being the complete record of gratuity which was forwarded to LIC in case of death of Sh. Rakesh Panwar.
15. PW4 Sh. Jainendra Kumar From Employee Provident Fund Organization was summoned to bring the record pertaining to the provident fund account and pension account of the Rakesh Panwar with Employee Provident Fund Organization. The witness had brought following documents: -
(i) Ex. PW4/A i.e. authority letter dated 02.01.2023 issued in his favour by Sh. Satender Kumar Antil, Assistant PF Commissioner (CPM-II), Delhi;
(ii) Ex. PW4/B i.e. KYC inquiry form containing the details of Sh. Rakesh Panwar (his UAN number etc.);
(iii) Ex. PW4/C (colly) i.e. ledger account of deceased Rakesh Panwar bearing ID no. 1834/340 showing the amount credited in the PF account of Sh. Rakesh Panwer;
Page no. 11 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
(iv) Ex. PW4/D (colly) i.e. worksheets maintained by EPFO with regard to the PF account of Rakesh Panwar; and
(v) Ex. PW4/E (colly) i.e. details of pension account of Rakesh Panwar.
16. PW5 Sh. Vinesh Makhija from Life Insurance Corporation, 11N, Mehrauli Branch was summoned with respect to details of LIC policies in the name of Rakesh Panwar. The witness had brought the following documents:
(i) Ex. PW5/A i.e. authority letter dated 03.01.2023 issued in his favour by Sh. Sita Ram Sahu, Admin, Officer, LIC, 11N, Mehrauli Branch, New Delhi;
(ii) Ex. PW5/B i.e. the status report of LIC policy no.
111732440 issued in favour of Sh. Rakesh Panwar r/o 220A, Shahpurjat, New Delhi-110049 for sum assured of Rs. 1 lac in which the registered nominee is wife of policy holder namely Anju Panwar;
(iii) Ex. PW5/C i.e. the status report of LIC policy no. 117152709 issued in favour of Sh. Rakesh Panwar r/o 220A, Shahpurjat, New Delhi-110049 for sum assured of Rs. 2.50 lacs in which the registered nominee is wife of policy holder namely Anju Panwar; and
(iv) Ex. PW5/D i.e. the certificate dated 24.11.2022 issued by Smt. Kiran Sikka, Admin. Officer, LIC 11N, Mehrauli Branch, New Delhi.
17. PW6 Sh. Suresh Chandra from Life Insurance Corporation, Branch no. 116, 1st Floor, Laxmi Insurance Building, Page no. 12 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
Asaf Ali Road, Delhi-110002 was summoned with respect to LIC policies of Late. Rakesh Panwar. The witness had brought the following document:
(i) Ex. PW6/A (colly) i.e. authority letter dated 24.02.2023 issued in my favour by Chief Manager, LIC 116, 1 st Floor, Laxmi Insurance Building, Asaf Ali Road;
(ii) Ex. PW6/B i.e. the status report of LIC policy no.
121484171 issued in favour of Sh. Rakesh Panwar r/o 220A, Shahpurjat, New Delhi-110049 for sum assured of Rs. 2,20,000/- in which the registered nominee is Yugant Panwar i.e. defendant no.2;
(iii) Ex. PW6/C i.e. the status report of LIC policy no. 124534739 issued in favour of Sh. Rakesh Panwar r/o 220A, Shahpurjat, New Delhi-110049 for sum assured of Rs. 5 lacs in which the registered nominee is Anju Panwar;
(iv) Ex. PW6/D i.e. the status report of LIC policy no. 124546206 issued in favour of Sh. Rakesh Panwar r/o 220A, Shahpurjat, New Delhi-110049 for sum assured of Rs. 4,87,500/- in which the registered nominee is Anju Panwar;
(v) Ex. PW6/E i.e. attested copy of NEFT details with respect to policy no. 121484171 according to which, a sum of Rs. 2,38,646/- towards the death claim of policy holder Rakesh Panwar has been processed from in favour of Ms. Anju Panwar; and
(vi) Ex. PW6/F i.e. attested copy of NEFT details with respect to policy no. 124534739 according to which, a sum of Rs. Page no. 13 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
6,94,000/- towards the death claim of policy holder Rakesh Panwar has been processed in favour of nominee/ Anju Panwar.
18. Despite giving opportunity for cross-examination of PW1 to PW6, the same was not availed as the defendants remained ex-parte. Thereafter, vide separate statement of the plaintiff, PE stood closed on 25.02.2023. Subsequently, ex-parte final argument was heard on behalf of the Ld. Counsel for plaintiff on 12.07.2023.
19. Heard the Ld. Counsel for the plaintiff and perused the case file. My issue-wise findings are as follows:-
ISSUE NO. 1Whether the defendants have illegally not made the payment towards CCL extended by DSC Bank under ECC Scheme vide sanction letter dated 03.02.16 for Rs. 7 lacs to the husband of D1 and father of D2 & D3 namely Rakesh Panwar? OPP
20. The burden to prove is upon the plaintiff that the defendants have illegally not made any payment towards the Cash Credit Limit extended by DSC Bank under ECC Scheme vide sanction letter dated 03.02.2016 for Rs 7,00,000/- in favour of late husband of defendant no. 1 and father of defendant no. 2 and 3.
21. On combined reading of documentary and oral evidence, it is indisputable that the husband of defendant no. 1 and father of defendant no. 2 and 3 had obtained a loan in the form of cash credit limit of Rs 7,00,000/- from Delhi State Cooperative Bank sanctioned on 03.02.2016.
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22. Application form Ex. PW3/1 (colly) and undertakings of Rakesh Panwar Ex. PW3/1 (colly) and the plaintiff as surety Ex. PW3/1 (colly) are on record and have been duly proved by witness PW3 Sh. Vivek Panwar, Assistant Manager, Delhi State Cooperative Branch. Undertaking/ Bond Ex. PW3/1 (colly) duly filled and signed by the husband of defendant no. 1 shows that he had acknowledged that he received Rs 7,00,000/- on 04.02.2016 from the bank and undertook to repay the said amount with interest @ 10% per annum within three years from date of sanction. Next, is the Bond executed by plaintiff as surety Ex. PW3/1 (colly) whereby he has undertaken that if the principal debtor does not pay the Cash Credit Limit and the interest as and when due, the employer bank is authorized to deduct the amount due from his salary. Further, as per clause 3 of the bond Ex. PW3/1 (colly), the plaintiff/surety had authorized the employer bank to liquidate the balance of loan and interest from his salary in event of death, resignation or dismissal of the principal debtor. Thus, it is evident from above-referred document that it was principally the liability of the surety to repay the debt after the death of the principal debtor. Further, the creditor namely Delhi State Cooperative Bank had also demanded the repayment of loan amount from the surety/ plaintiff only as he had undertaken to discharge the loan amount as per his own undertaking Ex. PW3/1 (colly). Further, as per Section 128 of the Contract Act, 1872, the liability of the surety is co- extensive with that of principal debtor, unless it is otherwise proved. Hence, it cannot be said that the defendant have illegally Page no. 15 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
not paid anything towards the CCL as the prime liability was of the surety to repay/ discharge the debt advanced by the creditor i.e. Delhi State Cooperative Bank. Hence, this issue is decided against the plaintiff and in favour of the defendant.
ISSUE NO. 2Whether the plaintiff is entitled to recovery of Rs. 1,38,000/- on account of his capacity as surety to Rakesh Panwar from the defendants for the period 01.01.2020 till 31.07.2020? OPP
23. The burden to prove this issue is also upon the plaintiff. Now, the moot question is whether the plaintiff is entitled to recover the amount paid to employer bank as surety from the principal debtor and from the legal heirs after the death of the principal debtor. In this regard, it is apposite to refer to section 140 and 145 of the Indian Contract Act, 1872.
"140. Rights of surety on payment or performance. --Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety, upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor. --Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety, upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor.
145. Implied promise to indemnify surety. -- In every contract of guarantee there is an Page no. 16 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
implied promise by the principal debtor to indemnify the surety, and the surety is entitled to recover from the principal debtor whatever sum he has rightfully paid under the guarantee, but no sums which he has paid wrongfully. --In every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety, and the surety is entitled to recover from the principal debtor whatever sum he has rightfully paid under the guarantee, but no sums which he has paid wrongfully."
Illustrations
(a) B is indebted to C, and A is surety for the debt. C demands payment from A, and on his refusal sues him for the amount. A defends the suit, having reasonable grounds for doing so, but he is compelled to pay the amount of debt with costs. He can recover from B the amount paid by him for costs, as well as the principal debt. (a) B is indebted to C, and A is surety for the debt. C demands payment from A, and on his refusal sues him for the amount. A defends the suit, having reasonable grounds for doing so, but he is compelled to pay the amount of debt with costs. He can recover from B the amount paid by him for costs, as well as the principal debt."
24. Section 141 of the Contract Act encapsulates the principle of subrogation which entitles the surety to recover the amount paid on account of guaranteed debt from the principal debtor. Thus, on applicability of law of subrogation, the surety steps into the shoes of the original creditor and assumes all the rights of the creditors to seek discharge of the loan advanced. Page no. 17 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
25. There is no gainsaying that the late husband of the defendant no.1 and the bank had entered into a contract whereby the loan of Rs 7,00,000/- was advanced to him. Further, in light of salary slips Ex PW1/2 to Ex PW1/8 and certificate for deduction of salary Ex PW1/20, it is evident that amount of Rs. 1,38,000/- has been deducted from the salary of the plaintiff between the period January 2020 to July 2020. Further, the factum of deduction of salary from the account of the plaintiff against the loan account bearing no. 031129000820 in the name of Late Sh. Rakesh Panwar has been proved by PW3. Thus, as per section 141 of the Contract Act, 1872, the plaintiff is entitled to claim the same from the borrower. However, in the instant case, since the principal borrower has expired, therefore it is to be seen whether the same is recoverable from the legal heirs of the principal debtor or not.
26. In this regard, court deems fit to refer to the judgment of Hon'ble High Court of Delhi in Kamal Gupta Vs Bank of India AIR 2008 Delhi 51 wherein it has been observed as follows:
"The relationship between the borrower and the bank or the financial institution is created by a contract under the Indian Contract Act, 1872. Promise made by the promisor is binding on his representatives in case of his/her death, unless a contrary intention appears from the contract. Promise to perform an obligation under contract is not personal to the contracting party but is also binding on his representatives. Legal representatives under law is liable for the debts of their predecessor to the extent of any Page no. 18 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
property inherited by them from their predecessor in interest. Legal representatives are not personally liable for the liability but the liability is to the extent of the estate of the deceased inherited by them. Section 37 of the Contract Act, 1872 reads:
37. Obligation of parties to contracts: The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or ex-cused under the provisions of this Act, or of any other law.
Promises bind the representatives of the promisor in case of the death of such promisors before performance, unless a contrary intention appears from the contract."
27. It has been emphasised in the judgment referred above that relationship between debtors and creditors are governed by Contract Act. The contractual relationship between the late husband of the defendant no.1 and of the bank needless to say is also governed as per Indian Contract Act, 1872. Further, as per section 37 of the Contract Act, the promise by the promisor binds the legal representatives also. As a necessary corollary, if the promisor fails to discharge his promise, the other party can proceed against the Legal representative to seek fulfilment of the promise made by the promisor. Section 37 entitles the creditor to seek recovery from the legal representatives in event of death of the borrower.
28. Therefore, in the opinion of the court, section 141 entitles the surety to step into the shoes of the creditor once the Page no. 19 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
loan amount has been repaid. On stepping into the shoes of the creditor, the plaintiff becomes entitles by virtue of section 37 of Indian contract act, to recover the debt amount from the legal heirs. The plaintiff has duly proved that he has already paid total loan amount of Rs. 7,00,000/- by way of no dues certificate exhibited as Ex. PW1/21 wherein it is clearly mentioned that no dues against the loan account bearing no. 031129000820 of Sh. Rakesh Panwar are outstanding. Therefore, by virtue of section 141and section 37 of the Contract Act, the plaintiff is entitled to recover the amount from the estate of the deceased Rakesh Panwar.
29. Now the second question arises whether the plaintiff has been able to show that defendant no. 1, 2 and 3 have succeeded to the estate of Late Sh. Rakesh Panwar or not. It is trite that Legal representatives under law is liable for the debts of their predecessor to the extent of any property inherited by them from their predecessor in interest. Legal representatives are not personally liable for the liability but the liability is to the extent of the estate of the deceased inherited by them.
30. In this context, court deems fit to refer the judgment of Hon'ble High Court of Karnataka in Smt. Sharadamma vs Sri. Keshavashetty RSA 1822/18 decided on 12 August, 2022 wherein it has been observed as follows:-
"It is a trite law that in regard to liability of heir of the deceased Hindu to pay debts of the deceased, the legal heirs are only liable to the extent of assets inherited by them from Page no. 20 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
the deceased. Though the legal heirs are not personally liable to pay the debts of the deceased, if they have succeeded to the estate of the deceased, then inheritance to the estate is subject to liability. Therefore, the legal heirs cannot conveniently disown the liability while assets are inherited in the estate of the deceased."
31. In order to prove that the defendants have succeeded to the estate of the Principal debtor/ Late Rakesh Panwar, the plaintiff had summoned PW3 i.e. Ms. Neha Shokeen Assistant Manager, of Delhi State Cooperative Bank, PW4 Jainendra Kumar, EPFO, PW5 Vinesh Makhija, Administrative officer, LIC and PW6 Suresh Chandra, Assistant Administrative officer, LIC.
32. PW3 Ms. Neha Shokeen had stated that gratuity amount of Rs. 9,77,427/- and leave encashment amount of Rs. 2,46,334/- had been withdrawn and adjusted in to the another CCL account no 031056000015 of defendant no.1. It was brought to the fore by the PW3 that even defendant no.1 had taken a loan of Rs. 30,00,000/- from the bank and amount of gratuity and leave encashment has been adjusted towards the personal loan of defendant no.1. Though, Rs. 12,78,431/- had devolved upon the defendant no. 1, however same have already been disposed off, therefore, recovery of claim amount cannot be made against this amount.
33. Moving on, PW4 Sh. Jainendra Kumar had brought record of provident fund of the deceased Rakesh Panwar. PW4 had Page no. 21 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
stated that Rs. 9,85,149/- towards the claim of Employee Provident Fund has been credited into the account of defendant no.1
34. Further, PW5 Vinesh Makhija, Administrative Officer, LIC, had stated that deceased Sh. Rakesh Panwar had availed two policy namely policy bearing no 111732440 for an amount of Rs 1,00,000/- and 117152709 for an amount of Rs. 2,50,000/-. It has been stated that an amount of Rs 21,443/- and Rs. 2,96,000/- has been credited into the account of the defendant no.1 towards the above-mentioned policies. Thus, total amount of Rs. 3,17,443/- been credited into the bank account of defendant. On contrary, defendants have led no evidence to prove that the amount of Rs. 3,17,443/- have already been disposed off or utilized by them before filing of the suit.
35. Further, PW6 Sh. Suresh Chandra, Assistant Administrative Office, LIC, had stated that deceased Rakesh Panwar had availed three LIC policies namely LIC policy bearing no 121484171 for Rs 2,20,000/-, second LIC policy bearing no 124534739 for Rs. 5,00,000/- and third LIC policy bearing no 124546206 Rs. 4,87,500/- It has been stated by the witness that an amount of Rs. 2,38,646/- against the policy no. 121484171, Rs 6,94,000/- against the policy no.124534739 and Rs, 6,25,092 against the policy no. 124546206 have been credited into the account of the defendant no. 1. Thus, total amount of Rs 12,07,500/- has been credited into the account of the defendant no.
1. Again, the defendants have led no evidence to show that the Page no. 22 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
amount of Rs. 12,07,500/- have already been disposed off by them before or after filing of the present suit.
36. Thus, the plaintiff has been able to show that the defendants have succeeded to the estate of the deceased to the tune of Rs 38,00,000/- approximately from the various sources as discussed above. The defendants despite appearing in the present case has failed to lead evidence to rebut the case of the plaintiff. The plaintiff has successfully showed that the defendants have inherited to the estate of the deceased Rakesh Panwar.
37. Further, it is important to mention that though issue regarding limitation has not been framed, however this court during final arguments had inquired from the plaintiff if the present suit was filed prematurely in terms of Article 42 of the Limitation Act, 1963. As per Article 42 of the Act, the right to sue accrues when the surety has paid off the entire debt. The counsel for plaintiff during final arguments argued that even if the suit is filed prematurely, the court has power to adjudicate the suit upon merits if the right to sue matures during the pendency of the suit. It was argued that since the plaintiff had repaid the entire guaranteed debt of Rs. 7,00,000/- which is evident from no due certificate dated 03.11.2020 exhibited as Ex. PW1/21, therefore, the right to sue had already matured in favour of the plaintiff. Further, the plaintiff placed reliance upon judgment of Hon'ble Supreme Court of India in Vithal Bhai Pvt. Ltd. Vs. Union Bank of India Civil Appeal no. 2390/2002 wherein it was observed as follows:
Page no. 23 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
"Where the right to sue has not matured on the date of the institution of the suit an ob- jection in that regard must be promptly taken by the defendant. The Court may re- ject the plaint if it does not disclose the cause of action. It may dismiss the suit with liberty to the plaintiff to file a fresh suit on its maturity. The plaintiff may himself with- draw the suit at that stage and such with- drawal would not come in the way of the plaintiff in filing the suit on its maturity. In either case, the plaintiff would not be preju- diced. On the other hand, if the defendant by his inaction amounting to acquiescence or waiver allows the suit to proceed ahead then he cannot be permitted to belatedly urge such a plea as that would cause hard- ship, may be irreparable prejudice, to the plaintiff because of lapse of time. If the suit proceeds ahead and at a much later stage the Court is called upon to decide the plea as to non-maintainability of the suit on ac- count of its being premature, then the Court shall not necessarily dismiss the suit. The Court would examine if any prejudice has been caused to the defendant or any manifest injustice would result to the defen- dant if the suit is to be decreed. The Court would also examine if in the facts and cir- cumstances of the case it is necessary to drive the plaintiff to the need of filing a fresh suit or grant a decree in the same suit inasmuch as it would not make any real dif- ference at that stage if the suit would have to be filed again on its having matured for filing."
Page no. 24 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
38. It is clear from the evidence led by the plaintiff that the right to sue has matured during the pendency of the suit. Fur- ther, no prejudice can said to be caused to the defendants as they had willingly stopped appearing before the court to defend the suit despite being aware of the court proceedings. Hence, court deems fit to decree the present suit.
39. In light of the aforesaid observation, the court is of the opinion that the plaintiff is entitled for recovery of an amount of Rs. 1,38,000/- against the defendants. Hence, this issue is de- cided in favour of the plaintiff and against the defendants.
ISSUE NO. 3Whether the plaintiff is entitled to pendente lite and future inter-
est?If yes, at what rate? OPP
40. As regards interest, plaintiff has claimed pendente lite and future interest @ 24% per annum. Considering that the plaintiff has failed to place on record any document which could suggest that the interest as claimed by the plaintiff was the agreed rate of interest between the plaintiff and the principal debtor and in absence of there being any justification as to why such exorbitant rate of interest is being claimed by the plaintiff, the court deems fit to award pendente lite and future interest @ 6% from date of filing of the suit till its actual realization.
41. Accordingly, in view of the above facts, the present suit stands decreed for a sum of Rs. 1,38,000/- along with pendente lite and future interest @ 6% per annum from the date of filing of the suit till till its actual realization. Page no. 25 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi CS SCJ 91/21 BRIJ BHUSHAN Vs. ANJU PANWAR AND ORS.
42. Costs of the suit shall be paid by defendant to the plaintiff as per the rules.
43. Let decree sheet be drawn up accordingly.
44. File be consigned to record room after due compli- ance.
Digitally signedPronounced in open court: KANIKA by KANIKA AGARWAL Dated: 31.08.2023 AGARWAL Date: 2023.08.31 16:17:11 +0530 (Kanika Agarwal)
CJ-01(South)Saket/New Delhi/31.08.2023 Note:- This Judgment contains twenty six pages and all the pages have been checked and signed by me.
Digitally signed by KANIKAKANIKA AGARWAL AGARWAL Date:
2023.08.31 16:17:17 +0530 (Kanika Agarwal) CJ-01(South)Saket/New Delhi/31.08.2023 Page no. 26 of 26 (Kanika Agarwal) CJ-01/(South) Saket Court/New Delhi