Delhi District Court
United Bank Of India vs Manju Shree Tibrewal & Ors on 24 July, 2012
IN THE COURT OF MS. RUCHI AGGARWAL,
CIVIL JUDGE (CENTRAL ): DELHI
SUIT NO. 512/02
UNITED BANK OF INDIA,
At Lajpat Nagar Branch,
At office-cum-shopping complex,
C-40, Defence Colony,
New Delhi-110024. ....PLAINTIFF
Versus
1. MANJU SHREE TIBREWAL & Ors.
W/o Late Sh. Sashi Kumar Tiberwal
2. Sh. Udit Tibrewal,
S/o Late Sh. Sashi Kumar Tiberwal
3. Ms. Shardha Tibrewal
D/o Late Sh. Sashi Kumar Tiberwal
4. Ms. Srishti Tiberwal
D/o Late Sh. Sashi Kumar Tiberwal
All R/o W-90, Anupam Garden,
Saidulajab, IGNOU Road,
New Delhi-110030.
5. Sh. Mayank Poddar
6. Sh. Keshav Pandey
Both R/o 24, Park Street,
Calcutta-700016. ....DEFENDANT
Date of Institution: 07.11.1998
Date of Reserving for Judgment: 19.07.2012
Date of Judgment: 24.07.2012
Suit No. 512/2002 Page 1 of 15
JUDGEMENT
The present suit is filed by the plaintiff against the defendants for the recovery of Rs.2,72,438/-.
Plaintiff's version:-
2 It is a case of the plaintiff that Late Sh. Shashi Kumar Tibrewal had been banking with the plaintiff bank and enjoying a cash credit limit of Rs.3,75,000/- which was subsequently enhanced to Rs.94,000/- on 01.07.1981 and again enhanced to Rs.1,20,000/- on 11.02.1982 and finally to Rs.4,00,000/- on 21.05.1984. The plaintiff has stated that when the cash credit limit of Rs.4,00,000/- was granted, Late Sh.
Shashi Kumar Tibrewal signed and executed a Demand Promissory Note for Rs.4,00,000/- dated 21.05.1985, a Letter of Continuity dated 21.5.1985 in regard to the aforesaid Demand Promissory Note of Rs.4,00,000/-, a Deed of Hypothecation of Debt and Movable Assets dated 21.05.1985 and Hypothecation of the goods dated 21.5.1985. The defendant Nos. 1, 5 & 6 had signed and executed Letter of Guarantee all dated 21.5.1985.
3 The plaintiff has further stated that Late Sh. Shashi Kumar Tibrewal, on shifting his place of business, also shifted Suit No. 512/2002 Page 2 of 15 the cash credit limit to the Lajpat Nagar Branch of the Bank wherein fresh loaning documents were signed and executed by Late Sh. Shashi Kumar Tibrewal on 20.01.1986 for the cash credit limit of Rs.4,00,000/-. It is the case of the plaintiff that along with other documents executed by Late Sh. Shashi Kumar Tibrewal, Letter of Guarantee dated 20.1.1986 was also executed by Defendant No.1 and Defendant No.5. The plaintiff further states that the cash credit limit of Rs.4,00,000/- was reduced to 1,50,000/- and fresh loaning documents were executed by Late Sh. Shashi Kumar Tibrewal that includes a Demand Promissory Note for Rs.1,50,000/- dated 03.11.1988, a Letter of Continuity dated 03.11.1988 in regard to the aforesaid Demand Promissory Note, Deed of Hypothecation of Debt and Movable Assets dated 03.11.1988 and a Letter of Lien dated 03.11.1988.
4 It is also the case of the plaintiff that Late Sh. Shashi Kumar Tibrewal became highly regular in maintaining its accounts and neglected to maintain financial discipline and regularity in payment. He signed and executed a Demand Promissory Note on 29.11.1989 of Rs.4,45,933.03, a Letter of Continuity dated 29.11.1989 in respect of the aforesaid Demand Promissory Note and Revival Letter dated 29.11.1989 wherein he confirmed having executed a Demand Promissory Note and a Letter of Continuity in favour of the plaintiff. That Suit No. 512/2002 Page 3 of 15 Late Sh. Shashi Kumar Tibrewal again signed and executed loaning documents on 23.11.1992 and again on 08.11.1985 i.e. Demand Promissory Note for Rs.1,50,000/-, Letter of Continuity in respect of aforesaid Demand Promissory Note, Deed of Hypothecation of Debts and Movable Assets, Letter of Lien and a Deed of Hypothecation of Goods. It is also the case of the Plaintiff Bank that Late Sh. Shashi Kumar Tibrewal had signed and executed balance confirmation letters dated 23.11.1992 confirming therein that on 23.11.1992, Rs.1,09,520.64, besides interest, was due and payable and a balance confirmation letter dated 17.11.1995 confirming therein that on 17.11.1995 a sum of Rs.53,520.64 was due and payable by him to the plaintiff bank.
5 It is further stated by the plaintiff bank that Late Sh. Shashi Kumar Tibrewal continued to remain irregular and despite several reminders, did not clear his dues. The plaintiff further avers that Late Sh. Shashi Kumar Tibrewal expired and on his demise Defendant No.1 as his wife, Defendant No.2 as his son, Defendant Nos. 3 & 4 as his daughter became jointly and severally liable to answer the claim of the plaintiff bank. The plaintiff bank also states that the Defendant Nos. 1, 5 and 6 had given personal guarantee and as such are liable to answer the claim of the plaintiff bank. The bank had served the legal notice dated 21.10.98 calling upon the defendants to repay the Suit No. 512/2002 Page 4 of 15 sum of Rs.33,520.64/-. It is the case of the plaintiff bank that as on the date of filing the suit a sum of Rs.2,72,438/- inclusive of interest @16.5% per annum up to 06.11.1998 is due and payable.
Defendants' version:-
6 None had appeared on behalf of Defendant Nos. 1 to 6 on 21.02.2000 and they were proceeded ex-parte on 12.7.2001. The order by which Defendants were proceeded ex- parte was set-aside but only in respect of defendant nos. 5 and 6. Therefore, Defendant nos. 1 to 4 remained ex-parte.
7 Defendant Nos. 5 & 6 filed their written statement. In their written statement, Defendant Nos.5 & 6 contended the suit of the plaintiff on the ground that they had not executed any Letter of Guarantee at any point of time. It has been further alleged by the Defendant Nos. 5 & 6 that even if any such document was signed and executed by them, they cannot be held liable as the guarantee had become infructuous by reasons of subsequent enhancement and reduction of cash credit limit which was without the consent and knowledge of the answering defendants. They have also stated that the Letter of Guarantee is extinguished by reasons of death of Late Suit No. 512/2002 Page 5 of 15 Sh. Shashi Kumar Tibrewal and in any case barred under the law of limitation.
8 From the pleadings of the parties, vide order dated 19.07.2012, Ld. Predecessor of this court had framed the following issues:-
1 Whether the plaintiff has no cause of action to file the present suit? OPD.
2 Whether the suit of the plaintiff is barred under the law of
limitation? OPD.
3 Whether the plaintiff is entitled to a decree for a sum of
Rs. 2,72,438/-, as prayed for? OPP.
4 Whether the plaintiff is also entitled to pendentelite and
future interest @ 16.5 % per annum, as prayed for? OPP.
5 Relief.
9 During the course of trial, the plaintiff examined Smt. Upasana Sharma, Bank Manager, UBI, Lajpat Nagar Branch, New Delhi as PW1 who deposed that she has not placed any power of attorney on record authorising her to appear as a witness. Thus, her testimony cannot be read in evidence.
10 The plaintiff also examined Sh. V. K. Bansal, Manager, UBI, Service Branch, Connaught Place, New Dehi as Suit No. 512/2002 Page 6 of 15 PW2 who reiterated the facts mentioned in the plaint and placed on record the following documents:-
1. The Power of Attorney dated. 22.1.1992 exhibited as PW2/1.
2. The Demand Promissory Note dated 21.5.1985 exhibited as PW2/2.
3. Letter of Continuity dated 21.5.1985 exhibited as PW2/3.
4. Agreement for Hypothecation of Debts and Movable Assets exhibited as Ex.PW2/4.
5. Agreement for Hypothecation of Goods dated 21.5.1985 exhibited as PW2/5.
6. Letter of Guarantee executed by defendant No. 6 dated 21.05.1985 exhibited as Ex.PW2/6.
7. D.P. Note dated exhibited as Ex.PW2/7.
8. Letter of continuity dated 20.1.1986 exhibited as Ex.PW2/8.
9. Agreement for Hypothecation of goods dated 20.1.1986 exhibited as Ex.PW2/9.
10. Letter of Lien dated 20.1.1986 exhibited as Ex.PW2/10.
11. Agreement for Hypothecation of Debts and Movable Assets exhibited as Ex.PW2/11.
12. Letter of Guarantee dated 20.1.1986 executed by defendant no.
1 dated 20.01.1986 exhibited as Ex.PW2/12.
13. Letter of Guarantee dated 1.3.1986 executed by defendant no.
5 dated 01.03.1986 exhibited as Ex.PW2/13.
14. Demand Promissory Note dated 3.11.1988 exhibited as Suit No. 512/2002 Page 7 of 15 Ex.PW2/14.
15. Letter of Continuity dated 3.11.1988 exhibited as Ex.PW2/15.
16. Agreement of Hypothecation of Goods exhibited as Ex.PW2/16.
17. Letter of Lien dated 3.11.1988 exhibited as Ex.PW2/17.
18. Agreement for Hypothecation of Debts and Movable Assets exhibited as Ex.PW2/18.
19. Demand Promissory Note dated 29.11.1989 exhibited as Ex.PW2/19.
20. Letter of Continuity dated 29.11.1989 exhibited as Ex.PW2/20.
21. Revival Letter dated 29.11.1989 exhibited as Ex.PW2/21.
22. Demand Promissory Note dated 23.11.1992 exhibited as Ex.PW2/22.
23. Letter of Continuity dated 23.11.1992 exhibited as Ex.PW2/23.
24. Agreement for Hypothecation of debts and Movable Assets exhibited as Ex.PW2/24.
25. Letter of Lien dated 23.11.1992 exhibited as Ex.PW2/25.
26. Agreement for Hypothecation of Goods exhibited as Ex.PW2/26.
27. Demand Promissory Note dated 08.11.1995 exhibited as Ex.PW2/27.
28. Letter of Continuity dated 08.11.1995 exhibited as Ex.PW2/28.
Suit No. 512/2002 Page 8 of 15
29. Letter of Lien dated 08.11.1995 exhibited as Ex.PW2/29.
30. Agreement for Hypothecation of Debts and Movable Assets exhibited as Ex.PW2/30.
31. Agreement for hypothecation of Goods exhibited as Ex.PW2/31.
32. Balance confirmation Letter dated 23.11.1995 exhibited as Ex.PW2/32.
33. Balance confirmation Letter dated 17.11.1995 exhibited as Ex.PW2/33.
34. Legal demand notice dated 21.10.1998 exhibited as Ex.PW2/34.
35. Regd. / AD receipts are exhibited as Ex.PW2/35.
36. UPC receipts exhibited as Ex.PW2/36.
37. Four returned envelopes are exhibited as Ex.PW2/37 to ExPW2/40.
38. Statement of Account of the Plaintiff Bank duly certified under the Bankers Books of Evidence Act exhibited as Ex.PW2/41. 11 After conclusion of trial, final arguments were addressed by Ld. Counsel for the plaintiff. Despite various opportunities, none had appeared on behalf of defendant nos. 5 & 6 and thus, it was deemed appropriate to decide the case on the basis of material available on record. 12 I have carefully perused the record and given my Suit No. 512/2002 Page 9 of 15 considered thoughts to the arguments addressed by the Ld. Counsel for the plaintiff and my findings on various issues are, as under:-
ISSUE NO. 1.
Whether the plaintiff has no cause of action to file the present suit? OPD.
13 Onus to prove this issue was upon the defendants.
However, the defendants have not led any evidence or placed on record any document to show that the plaintiff has no cause of action to file the present suit. Therefore, this issue is decided against the defendants.
ISSUE NO. 2.
Whether the suit of the plaintiff is barred under the law of limitation? OPD.
14 Onus to prove this issue was upon the defendants. However, the defendants have not led any evidence or placed on record any document to show that the suit of the plaintiff is barred under the law of limitation.
15 Perusal of record reveals that the present suit was filed on 07.11.1998 and the Balance Confirmation Letter which is Ex. PW-2/33 was executed on behalf of M/s Archna on Suit No. 512/2002 Page 10 of 15 17.11.1995, thereby giving rise to a fresh cause of action and therefore, the suit has clearly been filed within the limitation period of three years. Accordingly, this issue is decided against the defendants.
ISSUE NO. 3.
Whether the plaintiff is entitled to a decree for a sum of Rs. 2,72,438/-, as prayed for? OPP.
16 Onus to prove this issue was upon the plaintiff. PW-2 in his evidence has proved that Sh. Sashi Kumar Tibrewal was the proprietor of M/s Archana who was advanced a loan of Rs. 37,000/- which was enhanced and reduced from time to time. Every time, the loan amount was enhanced or reduced fresh loan documents were executed. He has also deposed that the assets of Sh. Sashi Kumar Tibrewal have devolved upon defendant nos. 1 to 4 and therefore, they are liable to pay the due amount to the plaintiff bank. The plaintiff bank has also placed on record the statement of account Ex. PW-2/41 that shows a balance of Rs.2,72,430/- due and outstanding upon the defendants as on 06.11.1998.
17 The testimony of PW-2 and the documents placed on record have remained uncontroverted, unrebutted and unchallenged as against the defendant nos. 1 to 4 and Suit No. 512/2002 Page 11 of 15 therefore, the plaintiff bank has been able to discharge its onus and prove that defendant nos. 1 to 4 are liable to pay the due amount as legal representative of Sh.Sashi Kumar Tibrewal to the plaintiff bank.
18 PW-2 has further deposed that defendant nos. 5 and 6 are liable as guarantors as they had given their personal guarantee for the said loan. Defendant nos. 5 and 6 have contended in their written statement that they are not liable since they had not signed any letter of guarantee.
19 Perusal of record shows that a Letter of Continuing Guarantee was signed by Defendant No. 1 on 20.01.1986, by Defendant No.5 on 01.03.1986 and by Defendant No.6 on 21.5.1985. Therefore, Defendant Nos.5 & 6 cannot evade their liability on the ground that no Letter of Guarantee was executed by them.
20 However, they have further contended that even if they had signed the Letter of Guarantee, it cannot be said to be valid since there was a lot of variance in the terms of guarantee. Ld. Counsel for the Plaintiff bank submitted that the guarantee was a continuing guarantee and hence, it extended to subsequent transactions.
Suit No. 512/2002 Page 12 of 1521 It is clearly laid down in Section 133 of the Indian Contract Act, 1872 "that any variance made without the surety's consent in the terms of the contract between the principal debtor and the creditor, discharges the surety as to transaction subsequent to the variance".
22 In the present case the cash credit limit of the plaintiff was varied in 1988 when no new Letter of Guarantee was executed by either of the guarantors. PW-2 in his cross- examination has deposed that "no letter of guarantee was executed by defendant nos. 5 & 6 in 1992 when loan documents were signed." He has further deposed that "no letter of guarantee was executed by defendant nos. 5 & 6 in 1995 when loan documents were signed."
23 It is clear from the cross-examination of PW-2 that no guarantee documents were executed by defendant nos. 5 & 6 when other loan documents were executed. It is beyond the imagination of this court, as to why, the bank will get the loan documents executed and not the Letter of Guarantee. Moreover, applying the law laid down in Section 133 of the Indian Contract Act, to the facts of the present case, it can be held without any hesitation that Defendant No.1, in the capacity of a guarantor, and Defendant Nos. 5 & 6 cannot be held liable to pay the due sum.
Suit No. 512/2002 Page 13 of 1524 Therefore, defendant Nos. 1 to 4 are liable to pay the outstanding amount and accordingly, this issue is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 4.
Whether the plaintiff is also entitled to pendentelite and future interest @ 16.5 % per annum, as prayed for? OPP.
25 Onus to prove this issue was also upon the plaintiff. In view of my findings on issue no. 3, the plaintiff is also entitled to pendentelite and future interest. However, plaintiff has claimed interest @16.5% p.a. but, to my mind, such an exorbitant interest cannot be awarded. Therefore, pendentilite and future interest @8% p.a. w.e.f. 07.11.1998 i.e. the date of institution of the suit till its realisation is awarded in favour of Plaintiff and against the Defendant nos. 1 to 4.
Relief.
26 In view of my findings on various issues, as discussed above, the suit of the plaintiff is decreed in his favour and against the defendant nos. 1 to 4 for a sum of Rs.2,72,438/- alongwith pendentilite and future interest @ 8% p.a. w.e.f. 07.11.1998 i.e. the date of institution of the suit till its realisation. Costs of the suit are also awarded in favour of the Suit No. 512/2002 Page 14 of 15 Plaintiff and against the Defendant no. 1 to 4. The defendant nos. 1 to 4 are jointly or severally liable to pay the said amount. Decree sheet be prepared accordingly.
File be consigned to Record Room after due compliance.
Announced in the open court today on this 24th day of July, 2012.
(RUCHI AGGARWAL) CIVIL JUDGE, CENTRAL-02, TIS HAZARI COURTS,DELHI.
Suit No. 512/2002 Page 15 of 15 Suit No. 512/200224.07.2012.
Present: None.
Vide separate judgment of even date, the suit of the plaintiff has been decreed in his favour and against the defendant nos. 1 to 4 for a sum of Rs.2,72,438/- alongwith pendentilite and future interest @ 8% p.a. w.e.f. 07.11.1998 i.e. the date of institution of the suit till its realisation. Costs of the suit are also awarded in favour of the Plaintiff and against the Defendant no. 1 to 4. The defendant nos. 1 to 4 are jointly or severally liable to pay the said amount. Decree sheet be prepared accordingly.
File be consigned to Record Room after due compliance.
(RUCHI AGGARWAL) CIVIL JUDGE, CENTRAL-02, DELHI/24.07.2012 Suit No. 512/2002 Page 16 of 15