Delhi High Court
Union Bank Of India vs Gopal Dal Mills on 16 July, 1997
Equivalent citations: 70(1997)DLT22, 1998 A I H C 3673, (1997) 70 DLT 22
JUDGMENT C.M. Nayar, J.
(1) The plaintiff has filed this suit for recovery of Rs. 2,66,677.60 with costs and interest thereon. The plaintiff is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at 66 / 80, at Samachar Marg, Fort, Bombay and Branch Office at various places in India including one at 3581, Chawri Bazar, Delhi 6. Shri Kamal Kumar Gupta who has instituted the suit and signed and verified the plaint was the Branch Manager of the plaintiff-Bank and has been authorised to institute proceedings on behalf of the plaintiff by virtue of Power of Attorney executed in his favour. He is duly conversant with the facts of the case and able to be deposed the same.
(2) Defendant No. 1 is a partnership concern carrying on business of manufacture and supply of all kinds of pulses and defendant 2 and Hari Prashad, since deceased, were the partners of defendant No. 1. Defendants 4 and 5 guaranteed the due repayment of the facilities forming the subject matter of die suit and, as such, are liable to pay the amount as claimed in the suit jointly and severally.
(3) The brief facts are that on May 4, 1973 the first defendant opened an account with the plaintiff-bank to be operated upon by the second defendant alone. The account was introduced to the plaintiff by defendant No. 4 allegedly wrongly showing himself to be partner of M/s. Rashtriya Steel and Metal Products an allied concern of defendant No. 1. The plaintiff-bank granted certain facilities in the nature of documentary bills purchase limits to the said defendant after defendants 2 and 3 and Shri Hari Prashad had on May 4,1973, executed various documents. The said facilities were utilised by the defendants from time to time.
(4) The following facts as enumerated in the plaint in paragraphs 5,6,7 and 8 may be reproduced as under:
"5.During the period 4th May, 1973 to 8th September, 1973 defendant No. I requested the plaintiff to purchase various documentary bills in terms of the facilities granted and the plaintiff accordingly during the said period, purchased documentary bills aggregating in value to Rs. 2,61,064.00 (Rupees Two Lacs Sixty one Thousand Sixty Four only). Out of these bills, six were accompanied by Railway receipts and the 7th Bill on the value of Rs. 54,000.00 (Rupees Fifty Four Thousand only) was accompanied by a Motor Lorry Receipt which the plaintiff presented for payment but the same was received back unpaid. The plaintiff thereupon contacted the 1st defendant and at the said defendant's request agreed to adjust the said bill of Rs. 54,000.00 (Rupees Fifty Four Thousand only) by purchasing 3 fresh bills aggregating in value of Rs. l,62,000.00 (Rs. One Lac Sixty Two Thousand only). Since the previous bill had not been honoured on presentation, before adjusting the same and purchasing three further bills, the plaintiff required defendants 1 to 3 to arrange for the facilities to be guaranteed. Accordingly at the request of the defendants 2 and 3 and Shri Hari Prashad, defendant Nos. 4 and 5 attended the plaintiff-Bank on the 3rd October, 1973 and executed the necessary guarantee deeds, guaranteeing the due repayment of the facilities. Thereafter as agreed, the plaintiff adjusted the bill of Rs. 54,000.00 (Rs. Fifty Four Thousands only) on the 4th October, 1973 by purchasing a fresh bill aggregating in value to Rs. l,62,000.00 (Rs. One Lac Sixty Two Thousand only) accompanied by its corresponding Motor Lorry Receipts. As of the 4th October, 1973, the Documentary Bills Purchase Account of Defendant No. 1 with the plaintiff showed a debit balance of Rs. l,62,000.00 (Rs. One Lac Sixty Two Thousand only).
6.On 8th October, 1973, the defendant No. 1 again presented a bill for Rs. 37,212 .00 (Rs. Thirty Seven Thousand Two Hundred and Twelve only) which the plaintiff discounted and presented for payment and duly received the amount on 28th November, 1973. Defendant No. 1 again on 10th October, 1973 presented three more Bills aggregating in value to Rs. 1,01,025.50 (-Rs. On Lac One Thousand Twenty Five and Paise Fifty only) which the plaintiff discounted and presented for payment. Two of the said bills amounting to Rs. 73,825.50 (Rs. Seventy Three Thousand Eight Hundred Twenty Five and Paise Fifty only) was paid by the drawees on 21st November, 1973 but the third bill for the balance amount of Rs. 27,200.00 (Rs. Twenty Seven Thousand and Two Hundred only) remained outstanding. On the 21st October, 1973 the 3 bills of the value of Rs. l,62,000.00 (Rs. One Lac Sixty Two Thousand only) purchased by the plaintiff on 4th 0ctober,1973 were also received back unpaid to the plaintiff who in turn informed the 1st defendant of the same and the advance against the three bills was again adjusted by the plaintiff purchasing 3 fresh bills on 23rd October, 1973 aggregating in value to Rs. 2,10,000.00 (Rs. Two Lacs and Ten Thousand only) with the usual margin in the party's account of Rs. 48,000.00 (Rs. Forty Eight Thousand only).
7.Thereafter it was discovered that the defendants had been lodging the consignor's copy of the various bills instead of the consignee's copy and in view of this, the bills purchased in 23rd October, 1973 were not despatched to the collecting branches. In view of the above the plaintiff informed the defendants of the above and reversed the entry being the margin of Rs. 48,000.00 (Rs. Forty Eight Thousand only) in the defendant's account leaving a debit account of Rs. l,62,000.00 (Rs.OneLacand Sixty Two Thousand only). Besides this, one bill of the 10th October amounting to Rs. 27,200.00 (Rs Twenty Seven Thousand and Two Hundred only) due and payable by the defendant to the plaintiff. The defendants however by their letter of the 3rd November, undertook to adjust the amount of Rs. l,62.000.00 (Rs. One Lac and Sixty Two Thousand only) pertaining to the above positively by 7th November, 1973.
8.On 5th November, 1973, the defendant No. 1 again gave 3 bills comprising of 5 RRs, of the aggregate value of Rs. 1,35,850.00 (Rs. One Lac Thirty Five Thousand Eight Hundred and Fifty only) with a request to adjust the amount in the outstanding dues. All the 5 RRs were purchased from Punjab Trading Company, Rohtak for which defendant No. 1 signed a cheque in favour of the said Punjab Trading Company, Rohtak for which defendant No. I signed a cheque in favour of the said Punjab Trading Co. which was returned unpaid. All the RRs evidenced despatch of Grams Dall from Rohtak to Howrah and were made out in the name of self (Punjab Trading Co.) and endorsed to defendant No. 1. However, Punjab Trading Co. got delivery of the said goods at Howrah from the Railway Authority against an indemnity Bond. Since the plaintiff is the holder of the Railway Receipt for valuable consideration and the said goods not being made available to the plaintiff by the Railway Authorities, a suit was filed by the plaintiff in the High Court of Calcutta which is pending disposal. In the meanwhile M/s. Punjab Trading Co., Rohtak filed a suit against the plaintiff and the defendant for the recovery of Rs. 4,000.00 (Rs. Four Thousand only) and for the return of the aforesaid 5 Railway Receipts."
(5) The plaintiff repeatedly called upon defendant No. 1 to adjust the account and on January 14, 1974 the said defendant executed in favour of the plaintiff an agreement to pledge various goods to secure the advances. "Die declared value of the goods was Rs. 52,120.00 and the defendants authorised the plaintiff to take delivery of the items from the factory premises. However, when on January 18,1974 the representative of the plaintiff-bank attended the factory premises to collect the pledged material and sell the same, they were surprised to be informed by the Police Authorities that the payment of the goods charged to the plaintiff had not been made by the defendants and the sellers of the same had claimed an unpaid seller's lien over the same and filed a complaint under Sections 406/506 and Section 420, Ipc against defendant No. 2 the plaintiff-bank approached the Trial Magistrate in this regard and subsequently the goods were delivered to the plaintiff and sold under the supervision of the Commissioner for a sum of Rs. 41,944.45. The amounts, however, remained outstanding and the plaintiff addressed letter to defendants calling upon them to repay the balance amount Rs. 1,44,200.00 which was due after adjustment of sum of Rs. 45,000.00 . As no response was forthcoming, the plaintiff caused a notice to be sent to the defendants on March 6,1974 which was du ly served. In response to this notice, defendant No. 1 by its letter dated March 29,1974 while admitting its liability undertook to repay the amount in instalments of Rs. 7,000.00 per month but despite the said assurance, the defendant failed and neglected to pay any amount. The defendants had hypothecated the plant, machinery and structure worth Rs. 1,25,000 .00 . The amount which was ultimately held due and payable by the defendants as on March 25, 1975 is Rs. l,71,987.60 inclusive of interest at the rate of 18 per cent and the suit was filed in respect of the amount in this Court.
(6) Summons in the suit were issued and on September 10, 1975 defendants 3 and 5 were directed to be proceeded against ex-parte. Subsequently, ex-parte order against defendant No. 5 was set aside and he was permitted to continue with the proceedings. However, vide order dated May 6, 1994 the said defendant and defendantNo.6wereonceagain proceeded against ex-parte as they failed to appear in Court. Similarly, defendants 1 to 3 were also. directed to be proceeded against ex-parte.
(7) On the pleadings of the parties, the following issues were framed on December 7,1976: (1) Whether the plaint has been signed and verified and the suit instituted by a duly authorised person ? Opp (2) Whether the suit is maintainable in the present form inspite of Hari Prashad, defendant No. 4 having died before its institution ? Opp (3) Whether the suit is bad on account of non-joinder of parties ? Opp (4) Whether the suit is bad due to misjoinder of causes of action ? OPU. (5) Whether the claim of the plaintiff in respect of the bills for Rs 2,61,064.00 , Rs. l,62,000.00 . Rs. l,35,850.00 . Rs. 54,000.00 and Rs. 27.200.00 is not covered by the guarantee provided by defendant No 6 and he is not, therefore, liable for their amounts ? Opd (6) Whether the guarantee relied upon by the plaintiff was obtained through fraud and suppression of material facts and if so, what is its effect ? . Opd (7) Whether the suit is premature for the reasons stated in paras 6 and of the-preliminary objections raised in the written statement ? Opd (8) Whether the suit is liable to be stayed for the reason given in parliamentary objection No. 11 in the written statement ? Opd (9) To what amount, if any, the plaintiff if entitled and from whom ? Opp (8) Following additional issues were framed vide order dated January 2. 1978: (1) Whether defendant No. 5 executed the bank guarantee dated 3.10.1970 as alleged in para 5 of the plaint ? (Onus on the plaintiff). 26 (2) Whether the bank guarantee referred to in the foregoing issue was forged as alleged by the defendant No. 5 in para 5 of the written statement ? (Onus on defendant No. 5).
(9) The plaint was subsequently amended in terms of order dated May 6,1994 as some additional amount had to be incorporated in the plaint which earlier had been credited to the defendants as the same was recovered in subsequent legal proceedings from the plaintiff-bank. The amended plaint is on record.
(10) Defendant No. 4 had died prior to the filing of the suit and, therefore, his name was permitted to be deleted by the Court on 6th May, 1994.
(11) The plaintiff was directed to file evidence by way of affidavits. The same has been filed and forms part of the record. The averments made in the amended plaint are reiterated.
(12) The plaintiff-bank has filed the documents which are marked as Exhibits Pw 1 to Public Witness Public Witness 21. Exhibit Public Witness Public Witness 2/1 is the Current Account Opening Form dated May 4,1973. The letter of Guarantee is Ex. Public Witness Public Witness 4 which is duly signed by defendant No. 5 and is dated 4th October, 1973. Ex. Public Witness Public Witness 6 is the letter of hypothecation which bears the signatures of defendants 2 and 3 and Shri Hari Prashad and Ex. Public Witness Public Witness 7 is the Hypothecation (Goods) Agreement thereby hypothecating to the plaintiff all plant and machinery. The legal notice sent to the defendants alongwith the Ad Cards are marked and exhibited as Exhibits Public Witness Public Witness 10 to Public Witness Public Witness 16. The letter dated March 29,1974 addressed by defendant No. 1 by which he undertook to repay the amount in instalments of Rs. 7,000.00 per month is Exhibit Public Witness Public Witness 17. Exhibit Public Witness Public Witness 18 is the copy of the power of attorney in favour of Shri K..K. Gupta, the then Branch Manager and constituted attorney 'of the plaintiff-bank authorising him to fill the present suit. Exhibit Public Witness PW19 is the copy of the Power of Attorney dated December 18,1981 infavour of Shri R. B. Jain by which he was authorising to file the amended suit.The Statement of Account of the Inland Documentary Bills Purchase (Railway Receipts) Account from October 8,1973 to November 28,1973 showing a debit balance of Rs. 27,200/ - and a Statement of Account in the Inland Documentary Bills Purchase Account (Motor Lorry Receipt) from September 19,1973 to January 23,1974 showing a debit balance of Rs. 1,16,700.00 are Exhibits P20 and P21. The other relevant documents, as referred in the plaint are duly exhibited and filed.
(13) I have heard learned Counsel for the plaintiff and also perused the documents on record. The defendants have neither appeared in Court nor put forward their defense to repudiate the claim of the plaintiff. The plaintiff has proved the claim and the same is supported by evidence which has been filed by affidavit and is corroborated by the documents or record.
(14) Accordingly, I pass a decree is the sum of Rs. 2,66,667.60 in favour of the plaintiff and against the defendants with cost. The plaintiff shall also be entitled to pendente lite and future interest at the rate of 12 per cent per annum till realisation.