Delhi District Court
Bank Of Baroda vs Canary Travel Private Limited on 1 July, 2010
IN THE COURT OF Ms. SANGITA DHINGRA SEHGAL,
ADDITIONAL DISTRICT JUDGE, CENTRAL11,
TIS HAZARI COURT, DELHI
Suit No : 651/08/04
Unique Identification No. : 02401C5067552004
Bank of Baroda
(A Body corporate having its
Head Office at Mandvi, Baroda),
And inter alia a branch called
Pusa Road Branch, at Vikram Tower,
1st Floor, Rajendra Place,
New Delhi110008. ......... Plaintiff
Vs.
1. Canary Travel Private Limited
D53, Greater Kailash EnclaveII,
New Delhi110048.
2. Ms. Sarika Jajodia, Director,
M/s. Canary Travels Pvt. Ltd.
3. Ms. Sanchna Jasrasaria, Director,
M/s. Canary Travels Pvt. Ltd. ........... Defendants
Date of filing of suit : 17.04.2004
Date of reserve judgment : 20.05.2010
Date of order pronounced : 01.07.2010
Suit No. 651/08/04 1/13
SUIT FOR RECOVERY OF Rs.4,484,000/
JUDGMENT
Plaintiff is a body corporate constituted and functioning under the Banking Companies (Acquisition & Transfer of Undertaking) Act, 1980; that defendant No. 1 is in the business of travel and defendant No. 2 & 3 are the directors of the defendant No. 1; that defendant No. 2 & 3 opened a Current Account No. 1490 with the plaintiff bank on behalf of and in the name of the defendant No. 1; that defendant No. 2 & 3 applied for Temporary Overdraft (TOD) from plaintiff bank on 18.04.2001; that the defendant No. 2 & 3 were throughout irregular in making the deposits against the amount of Temporary Overdraft and stopped depositing any amount in their Current Account maintained with plaintiff bank after 25.05.2001; that the plaintiff bank sent the defendants repeated reminders through letter dated 18.06.2002 requesting them to deposit the outstanding balance of Rs.5,40,768/ as on 30.03.2002; that a statement of account of the defendant pertaining to the said temporary overdraft certified under Banker's Books of Evidence Act shows that the defendant is liable to pay a sum of Rs.5,40,768/ as on 30.03.2002; that the Suit No. 651/08/04 2/13 defendants through their letter dated 11.07.2002 admitted their liability towards plaintiff bank; that vide letter dated 17.07.2002, the plaintiff bank again requested the defendant to deposit the temporary overdraft amount of Rs.5,40,768/; that a legal notice dated 09.03.2004 was sent to the defendants to settle the outstanding balance within 7 days, but till date neither defendants replied the said legal notice nor deposited any payment towards settling the Temporary Overdraft amount.
Defendants filed their written statement and took up a plea that some documents pertaining to the affairs of the defendants were seized by the C.B.I. which are still in their custody. It is further submitted by the defendants that the suit is bad for misjoinder of the parties and also time barred as the same has been filed beyond a period of three years from the date of cause of action.
Plaintiff filed replication and reiterated the contents of the plaint.
On the pleadings of the parties, following issues were framed.
1. Whether the suit of the plaintiff is bad for misjoinder of parties? OPD
2. Whether the suit of the plaintiff is barred by law of Suit No. 651/08/04 3/13 limitation? OPD
3. Whether the suit has been signed, verified and instituted by the duly constituted attorney of the plaintiff? OPP
4. Whether the plaintiff is entitled for the recovery of Rs.7,44,244/ as claimed? OPP
5. Whether the plaintiff is entitled for the interest on the said amount pendentelite & future, if so, at what rate? OPP
6. Relief.
During the course of evidence, plaintiff examined Shri G. K. Chawla as PW1, Shri Sanjeev Kumar Chopra as PW2, Shri Sundar Singh as PW3. On the other hand, defendant examined Shri Santosh Kumar as DW1.
ISSUE No.1 Whether the suit of the plaintiff is bad for misjoinder of parties? OPD The onus of proving this issue was on the defendants. The plea of the defendants is that defendant No. 1 is a corporate body incorporated under the provisions of the Companies Act, 1956, which can sue and be sued in its own name and defendant No. 2 & 3 being Directors of the defendant No.1 have limited liability to the extent as laid down under the provisions of Companies Act and defendants no. 2 & 3 are not necessary parties to the suit.
Suit No. 651/08/04 4/13
"Order I Rule X CPC confers vide discretion with court in matter of addition or striking out parties even at lead stage or even at the appellant stage, but it lays down a test to determine who is a necessary party. For determining the question, who is a necessary party, there are two tests (i) There must be a right to some relief against such party in respect of the matter involved in the proceeding in question & (ii) Should not pass an effective decree in the absence of such party. Thus, necessary parties are those who ought to be joined and without whom no Order can be passed effectively as their presence is necessary for the constitution of the suit itself. In other words, without whom, no effective decree can be passed".
During the course of arguments, the counsel for the plaintiff admitted that defendant no. 2 & 3 being the Directors of defendant no. 1 had a limited liability. At the same time, a letter dated 11.7.2002 signed by Ms. Sanchana Jasrasaria, one of the authorized signatories of the defendant company has been filed on record, which has been proved as Ex.PW1/5 by the plaintiff. The defendants have not led any evidence to disprove the documents. The issue is decided against the defendants.
Suit No. 651/08/04 5/13 ISSUE No. 2 Whether the suit of the plaintiff is barred by law of limitation? OPD The onus of proving this issue was on the defendants. Defendants took up an objection that the suit of the plaintiff was barred by time as it had been filed beyond the period of 3 years from the date of cause of action.
Perusal of the record shows that the suit was filed on 17.04.2004, the temporary overdraft facility was given to the defendants by the plaintiff bank on 18.04.2001 and the defendants finally stopped making payment after 25.05.2001.
The plaintiff in para 9 of the plaint stated that the defendants admitted their liability towards the plaintiff bank for an outstanding balance of Rs.5,40,768/ on 11.7.2002 and the plaintiff bank sent a letter dated 17.7.2002 calling upon the defendants to deposit temporary overdraft amount at the earliest.
The plaintiff proved Ex. PW1/5 a letter written on behalf of the defendants and signed by Ms. Sanchana Jasrasaria, one of the directors. The defendants admitted their liability on 11.7.2002 and the period of limitation would be computed from this date as per the law of limitation. The plaintiff bank has filed the suit within the period of Suit No. 651/08/04 6/13 limitation and the issue is decided against the defendants and in favour of the plaintiff.
ISSUE No. 3 Whether the suit has been signed, verified and instituted by the duly constituted attorney of the plaintiff? OPP The onus of proving this issue was on the plaintiff who deposed that Shri Naresh Gupta is a constituted attorney of the plaintiff bank and authorized to institute the suit and verify the pleadings. In support of the same, the plaintiff bank placed on record the Power of Attorney Ex. PW3/1 executed by the Deputy General Manager Shri Bhushan Lal Bhatia in favour of Shri Naresh Gupta, Senior Manager who has filed and instituted the present suit. Shri Sundar Singh Official from plaintiff bank was also examined as PW3 who identified the signatures of Shri Naresh Gupta, the Attorney of the plaintiff bank, though he admitted in the cross examination, the same was not signed in his presence, but he could identify the signature of Sh. Naresh Gupta, attorney of the plaintiff bank as he has see him writing and signing in the normal course of business.
In view of the above, I am of the considered opinion, that the suit in hand has been signed, verified and filed by a constituted attorney of the plaintiff bank. Even otherwise, defendant has not led Suit No. 651/08/04 7/13 any evidence to the contrary. The issue is decided in favour of the plaintiff and against the defendant.
ISSUE No. 4 Whether the plaintiff is entitled for the recovery of Rs.7,44,244/ as claimed? OPP The onus of proving this issue was on the plaintiff. Shri G. K. Chawla, Senior Manager examined by the bank as PW1, deposed that the defendant opened a Current Account with the plaintiff bank in the name of the defendant No. 1 i.e. M/s. Canary Travel Pvt. Limited and defendant No. 2 & 3 had signed the account opening form, The account opening form has been proved as Ex. PW1/1. PW1 further deposed that on 20.07.2000, defendant No. 2 & 3 signed a declaration, Ex. PW1/2 and furnished the copies of Memorandum of Association of Defendant No. 1 proved Ex. PW1/3. PW1 deposed that the documents of account opening were executed in his presence and defendants furnished Form32 under the Companies Act Ex. PW1/4. This witness deposed that Shri V. K. Kataria, who was working as Branch Manager at the relevant time granted the temporary overdraft facility to defendants on their oral request in accordance with the formal banking practice. PW1 further deposed that defendants were irregular in making payments and were Suit No. 651/08/04 8/13 reminded from time to time to regularize the account and finally in a letter dated 11.07.2002 Ex. PW1/5, signed by Ms. Sanchana Jasrasaria one of the Directors of the company admitted their liability to pay the outstanding amount. This witness was put to cross examine, but the defendants failed to elicit anything fruitful in their favour.
Shri Sundar Singh, Official of the plaintiff bank examined as PW3, deposed on the lines of the plaint and proved the statement of account Ex.PW3/2 pertaining to the temporary overdraft certificate and an amount of Rs.5,40,768/ is due as on 30.03.2002. This witness also deposed that a legal notice dated 09.03.2004 was given to the defendants calling upon to settle the outstanding balance amount and interest @ 18% p.a. In the cross examination, this witness admitted that the interest entries were reversed on 31.03.2004 and the closing balance reflected on 16.04.2004 is shown as Rs.5,40,768/ due from the defendants.
Defendant examined Shri Santosh Kumar as DW1, this witness deposed that he is the Executive (Liaison) of the defendant company and has been working in this company since 2000 and procure business for defendant company. He further deposed that in the year 2002 on the complaint of the plaintiff bank, CBI conducted Suit No. 651/08/04 9/13 raid in the premises and all the documents were seized and hence defendant company is unable to substantiate its defence. This witness admitted that he had never dealt with financial affairs of the defendant company and not aware that the defendant company had applied for TOD facility with the plaintiff bank.
The plaintiff bank has proved beyond doubt that temporary overdraft facility was granted by the bank to the defendant on request. The evidence of the plaintiff bank has remained unrebutted and uncontended on record as the defendant produced only one witness who deposed that he was only procuring business for defendant company.
At the same time, PW3 has admitted in his cross examination that the interest entries were reversed on 31.03.2004 and the closing balance on 16.04.2004 reflects an amount of Rs.5,40,768/ is due from the defendants.
Resultantly, plaintiff is entitled to the decree of Rs.5,40,768/ only.
ISSUE No. 5 Whether the plaintiff is entitled for the interest on the said amount pendentelite & future, if so, at what rate? OPP The onus of proving this issue was on the plaintiff. Shri Suit No. 651/08/04 10/13 G. K. Chawla, Sr. Manager on behalf of the plaintiff bank deposed that an amount of Rs.5,40,768/ and interest @ 18% p.a. from 30.03.2002 to till the date of filing the present suit amount to Rs.7,44,244/, which was admitted by the defendants. PW1 Shri G. K. Chawla has deposed that in accordance with the policy of the bank interest @ 18% p.a. is chargeable on temporary overdraft and same has been also shown in the outstanding balance of current account as per statement of account of the defendants.
Plaintiff has claimed an amount of Rs.7,44,244/ along with interest pendente lite and future @ 18% compounded quarterly from the date of institution of the suit till realization of the amount. However, from the statement of account it is revealed that the interest entries were reversed on 31.3.2004 and the closing balance of Rs.5,40,768/ is reflected due from the defendants on 16.4.2004.
In view of the above, plaintiff is thus entitled to the pendente lite and future interest @ 18% on the amount of Rs.5,40,768/ from the date of filing of the suit till realization. Relief:
The suit of the plaintiff is decreed for a sum of Rs.5,40,768/ alongwith pendentelite and future interest @ 18% Suit No. 651/08/04 11/13 compounded quarterly from the date of filing of the suit till realization. No order as to cost. Decree sheet be prepared accordingly. File be consigned to record room.
Announced in the open SANGITA DHINGRA SEHGAL Court today. i.e. 01.07.2010 ADDL. DISTRICT JUDGE:DELHI Suit No. 651/08/04 12/13 Suit no. 651/08 Bank of Baroda vs. Canary Travels & Ors.
1.7.2010 Present: Proxy counsel for parties.
Vide separate detailed order, suit of the plaintiff is decreed for a sum of Rs.5,40,768/ alongwith pendentelite and future interest @ 18% compounded quarterly from the date of filing of the suit till realization. No order as to cost. Decree sheet be prepared accordingly. File be consigned to record room.
ADJ/Delhi/1.7.2010 Suit No. 651/08/04 13/13