Delhi District Court
Canara Bank vs M/S Stallion Airlines Pvt. Ltd on 8 February, 2010
1 IN THE COURT OF SH. BHUPESH KUMAR : ADDL. DISTRICT JUDGE - 06 : WEST DISTRICT : DELHI. In matter of : Suit no. 713/04/03 Canara Bank, A Body Corporate constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 with its Head Office a 112, J.C. Road, Bangalore and having its branch offices through out India including the one At 74, Janpath, New Delhi. .......... Plaintiff versus 1. M/s Stallion Airlines Pvt. Ltd. B-126, Ground Floor, Freedom Fighter Colony, Neb Sarai, New Delhi-68 2. Mr. O.P. Malhotra B-126, Ground Floor, Freedom Fighter Colony, Neb Sarai, New Delhi-68 3. Mrs. Mohini Malhotra B-126, Ground Floor, Freedom Fighter Colony, Neb Sarai, New Delhi-68 ......... Defendants Contd... 2 Date of Institution : 7.11.03 Date of Arguments: 5.2.10 Date of Judgment : 8.2.10 JUDGMENT
1. The plaintiff has filed the present suit for recovery of Rs. 5,42,556/- through Sh. S. Sankar, Manager/principal officer/constituted attorney of plaintiff bank from the defendants. Defendant no. 1 is private limited company incorporated under the Companies Act, 1956 and defendant no. 2 & 3 are the Directors of the defendant no. 1 company.
The brief facts of the suit as emerged from the plaint are that the defendant no. 1 approached the plaintiff bank for financial assistance with a view to start airways in private sector. Defendant no. 2 and 3 were appointed by defendant no. 1 to operate all bank accounts including accounts where borrowing Contd...
3arrangement were made by the company such as overdraft, cash credit or any other account etc. from the plaintiff bank vide its resolution dt. 1.9.1997. At the request of defendant no. 1 the plaintiff bank allowed overdraft/loan facility to the defendant no. 1 against the cheques signed/issued by the defendant no. 2 on behalf of defendant no.1. Defendant no. 1 appoached the plaintiff for grant of financial assistance by way of temporary overdraft in current account no. 22251 to meet its urgent business requirements and as such defendant no. 1 issued cheque bearing no. 780751 dt. 6.2.99 for Rs. 1,50,000/- favoring self, cheque no. 780752 dt. 11.2.99 for Rs.50,000/- favoring 'self' and cheque no. 780754 dt. 18.2.2000 favoring self for Rs. 30,000/-. As per the settlement the defendant company was required to clear the said overdrawing within 15 days alongwith interest prevailing at the relevant time.
Contd...
4But the defendant company failed to keep its assurance and did not deposit the sufficient amount in its current account and has not cleared outstanding liability inspite of various requests. Ultimately on 30.1.2000 a legal notice was issued by the plaintiff to the defendant to clear outstanding liability but the defendants failed to comply with the said legal notice. The account of the defendant company became sticky and the same was treated as non performing asset and as per prudent norms of accounting laid by R.B.I., the plaintiff bank has not debited the interest from 1.1.2000 and though the plaintiff bank is legally entitled and has right to recover the same from defendant no. 1 as unapplied interest and accordingly the interest from 1.1.2000 till filing of the present suit is included in the claim of the plaintiff bank. Therefore, the plaintiff is entitled for a sum of Rs.
Contd...
5542556/- due outstanding alongwith interest @ 16.50% p.a. compounded quarterly against the defendants jointly and severally as per statement of account maintained by the plaintiff bank in the ordinary course of bank business.
The cause of action arose to the plaintiff on various dates; on 31.1.00 when the legal notice was issued and also on 11.12.01 when defendant no. 1 acknowledged the outstanding liability in favor of the plaintiff and ultimately on 31.1.02 when the legal notice was issued. On the basis of these submissions prayer was made to pass a decree of 5,42,556/- in favor of the plaintiff alongwith interest, pendentelite and future interest @ 16.50% per annum compounded quarterly till its realization.
2. The defendants contested the suit and filed written statement taking preliminary objection Contd...
6that the suit has not been properly verified or signed by proper authorized person and it was submitted that Sh. S. Sankar is not authorized person to file the present suit. It was further submitted that the suit is time barred.
On merits, it was submitted that no power of attorney or letter of authority etc. in favor of Sh. S. Sankar has been filed by the plaintiff. It was not denied that the defendant no. 1 approached the plaintiff for overdraft limit and maintain current account in the name of plaintiff bank. However, it was submitted that after availing the O.D. limit of Rs. 2,92,325/- the defendants paid the part and parcel amount and could not regularized the account further due to freezing of the account by Crime branch. It was further submitted that defendant no. 2 and 3 were asked to deposit Rs. 12 lacs with Hon'ble High Court as condition for the bail. It was Contd...
7denied that the defendants ever approached the plaintiff for grant of temporary overdraft facility in the current account by passing cheques dt. 6.2.1999, 11.2.99 and 18.2.2000. It was submitted that defendant after availing the overdraft facility of Rs. three lacs deposited Rs. two lacs on 4.2.99 and Rs. 1,30,000/- on 8.2.99. The bank officials without informing the defendants adjusted the amount deposited by the defendants in account and wrongly showed in the statement of account the temporary overdraft. It was denied that defendant company has not deposited the sufficient amount in its current account no. 22251 to clear the outstanding liability inspite of various request and reminders from the plaintiff back. It was submitted that due to freezing of account by Crime Branch the defendants could not regularize the account due to financial constrain. It was further submitted that plaintiff Contd...
8bank never intimated the defendants regarding declaration of N.P.A. of account for which the plaintiff bank was bound to inform the account holder. It was denied that the plaintiff is entitled for a sum of Rs. 5,42,556/- alongwith interest @ 16.50% p.a.. Inter alia, on the basis of these submissions prayer was made to dismiss the plaint.
3. Replication to written statement was filed by the plaintiff wherein the averments made in the written statement were generally denied and those made in the plaint have been reiterated and reaffirmed.
4. On the basis of pleadings of parties following issues were framed by my Ld. Predecessor Court on 9.11.04 :-
1. Whether the present suit has been signed, Contd...9
verified and instituted by the duly authorized person? OPP
2. Whether the suit is barred by limitation? OPD
3. Whether the plaintiff is entitled to suit amount? OPP
4. Whether the plaintiff is entitled to any interest? if yes, for what rate and for what period? OPP
5. Relief.
5. The plaintiff has examined Sh. S. Shankar, Manager of the plaintiff bank as PW1. He has brought on record GPA Ex. PW1/1 executed by Chief Manager of the plaintiff bank in favor of this witness to deal with and to proceed with the present matter. Statement of account of defendant no.1 Ex. PW1/2, statement of current account as Ex. PW1/3. The witness was cross Contd...
10examined at length by Ld. counsel for the defendant.
6. PW2 is Sh. Baljit Kapoor, officer of the plaintiff bank. He has brought on record the account opening form of defendant no. 1 as Ex. PW2/1, letter dt. 1.9.97 of defendant no. 1 is Ex. PW2/2, letter of aviation department Ex. PW2/3, letter of incorporation of defendant company as Ex. PW2/4, resolution of defendant no. 1 Ex. PW2/5, cheque dt. 18.2.00, 11.2.99 and 6.2.99 as Ex. PW2/6 to Ex. PW2/8, acknowledgment of debt dt. 11.12.01 Ex. PW2/9, notice dt. 31.1.02 Ex. PW2/10, postal receipt and AD cards Ex. PW2/11 to Ex. PW2/14. PE was closed.
7. The defendants have examined Sh. O.P. Malhotra, Managing Director of defendant company as DW1. He was partly cross examined Contd...
11on 21.4.06 and his further cross examination was deferred at the request of Ld. counsel for plaintiff. Thereafter this witness never turned up though number of opportunities obtained by defendants and vide order dt. 4.7.09 of my ld. predecessor court, DE was closed. In these circumstances the evidence of DW1 can not be read in evidence in view of principle of natural justice as plaintiff got no opportunity to cross examine the witness.
8. I have heard the arguments of Ms. Seema Gupta, Ld. counsel for plaintiff besides going through the material available on record. No arguments were advanced on behalf of the defendants though number of opportunities were granted.
9. My issue wise findings are as under :
ISSUE NO. 1 : Whether the present suit has been Contd...12
signed, verified and instituted by the duly authorized person? OPP The onus to prove this issue was upon the plaintiff. Ld. counsel for plaintiff submitted that the present suit was signed, verified and instituted by duly authorized person Sh. S. Sankar, Manager/principal officer/constituted attorney of the plaintiff bank. The GPA in favor of Sh. S. Sankar executed by Chief Manager of the plaintiff bank was brought on record as Ex. PW1/1 vide which Sh. S. Sankar was authorized to appear on behalf of the plaintiff bank and to sign and verify etc. on behalf of the plaintiff bank. This witness was cross examined at length. But during cross examination no suggestion was put to this witness that he is not competent to file the suit or verify the plaint etc. In these circumstances, issue is accordingly decided in favor of the plaintiff and against the defendants.
Contd...13
10. ISSUE NO.2 : Whether the suit is barred by limitation? OPD The burden to prove this issue was upon the defendants. As stated above, the defendants have not lead any evidence nor arguments advanced on behalf of defendants. However, the material perused. The plaintiff has filed the present suit on the basis of three cheques dt. 6.2.99, 11.2.99 and 18.2.2000. As per the contentions of the plaintiff, the defendants were required to repay the overdraft amount within 15 days after availing this facility. Ex. PW2/9 dt. 11.12.01 is written acknowledgment of liability of defendant towards the plaintiff. As per Law, fresh period of limitation start running from the day of acknowledgment. Hence, the period of limitation to file present suit start from 11.12.01 and the suit was filed on 7.11.03 i.e. within the period of Contd...
14limitation. Accordingly, this issue is also decided in favor of the plaintiff and against the defendants.
11. ISSUE NO. 3 : Whether the plaintiff is entitled to suit amount? OPP The onus to prove this issue was upon the plaintiff. On this score, it is found that the plaintiff has brought on record the statement of account of defendant Ex. PW1/2 which reveals that as on date the outstanding for a sum of Rs. 2,83,529 was due on the defendants. Ex. PW1/3 is statement of account of unpaid interest w.e.f. 1.1.00 to 4.11.03 for a sum of Rs. 5,42,556/- and this fact has not been controverted during the cross examination of PW1. There is nothing in the evidence of PW1 to doubt his testimony that as per Ex. PW1/3 the defendant was liable to pay Rs. 5,42,556/-. Therefore, the plaintiff is entitled for Contd...
15recovery of Rs. 5,42,556/- from the defendants.
12. ISSUE NO. 4 : Whether the plaintiff is entitled to any interest? if yes, for what rate and for what period? OPP The plaintiff has claimed the interest @ 16.50% p.a. compounded quarterly. Considering the facts and circumstances the interest is found to be on higher side and the compounded interest is not found to be justified. Accordingly, 10% p.a. simple interest from the date of filing of the suit till its realiztion would be sufficient to meet the ends of justice.
13. Relief.
In view of the above discussions, the suit of the plaintiff is decreed for a sum of Rs. 5,42,556/- with simple interest @ 10% p.a. from the date of filing of the suit till its realization with Contd...
16cost of the suit. Decree sheet be prepared accordingly. File be consigned to record room.
(Bhupesh Kumar) ADJ-06/West/Delhi 8.2.10 (Announced in open court) Contd...
17 Suit no. 713/04 8.2.10 Pr : None
None appeared on behalf of defendant to advance arguments.
Vide separate judgment dictated to Steno in the Court today, suit of the plaintiff stands decreed with cost of the suit. Decree sheet be prepared accordingly. File be consigned to record room.
(Bhupesh Kumar) ADJ-06/West/Delhi 8.2.10 Contd...