Jharkhand High Court
Union Bank Of India vs Annapurna Udyog And Ors. on 13 July, 2007
Equivalent citations: AIR2007JHAR97, 2007(2)BLJR2889, [2007(4)JCR41(JHR)], AIR 2007 JHARKHAND 97, 2008 A I H C (NOC) 24 (JHAR), (2007) 59 ALLINDCAS 703 (JHA), 2007 (59) ALLINDCAS 703, (2008) 3 BANKCAS 292, (2007) 4 JCR 41 (JHA), (2007) 3 JLJR 672
Author: D.G.R. Patnaik
Bench: D.G.R. Patnaik
JUDGMENT D.G.R. Patnaik, J.
Page 2890
1. This appeal filed by the plaintiff appellant is directed against the judgment and corresponding decree dated 26.3.1997 and 9.4.1998 passed in Title (Mortgage) Suit No. 30 of 1983, whereby the suit filed by the plaintiff appellant against the defendant respondents for decree for a sum of Rs. 5,71,915/- along with interest thereon as well as for preliminary mortgage decree in respect of properties mentioned in Schedule to the plaint, against the defendants No. 4 and 5 for recovery and realization of the aforesaid amount and for other reliefs, was dismissed.
2. The case of the plaintiff is that the defendant No. 1 being a partnership firm represented by defendants No. 2 and 3 was extended a term loan facility to the extent of Rs. 1.83 lakh by the plaintiff Bank for the purpose of setting up their business. The term loan was sanctioned by the bank vide letter dated 26.3.1974. The defendant had further applied for a cash credit facility to the tune of Rs. 30,000/- (rupees thirty thousand) and by way of security, an equitable mortgage in respect of the landed property on which the factory is situated, was created in favour of the plaintiff bank by depositing title deeds. The defendants had availed maximum limit of term loan of Rs. 1.83 lakh and further sum of Rs. 30,000/- (rupees thirty thousand) under the cash credit facility and against which the defendants No. 2 and 3 had executed promissory notes on 29.3.1974 for Rs. 2.53 lakhs besides executing letter of hypothecation of the stock and goods on 29.3.1974 for Rs. 2.13 lakhs. A letter of continuing guarantee dated 29.3.1974 was also executed by them assuring that the demand promissory notes executed for Rs. 2.53 lakhs would be continuing security and would be enforceable for all money dues from the defendants under the term loan and cash credit facility. Further more, letters of guarantee was executed by defendants 4 and 5 on 29.3.1974 by which they stood guarantors for repayment of the loan and by way of security, both of them had executed equitable mortgage in respect of their properties appertaining to their house situated within Giridih Municipality. Further case of the plaintiff is that the defendants had executed a fresh demand promissory note on 10.3.1977 and had also pledged their fixed deposits by way of security and when further enhancement of cash credit facility of Rs. One lakh was extended by the bank to them, the defendants again executed a fresh demand promissory notes on several dates i.e. on 1.5.1978, 20.3.1980 and 17.8.1991, besides accepting, acknowledging and confirming the correctness of the balance of dues of the bank on various dates. Further case of the plaintiff is that the defendants became irregular in paying the monthly instalments towards repayment of the loan and consequently, a demand notice was issued by the bank to the defendants on 21.4.1982, followed by another notice dated 18.1.1983 demanding payment of the total sum of Rs. 5,71,915/- which included principal amount and the interest accrued thereon and since the money was not paid, cause of action accrued to the plaintiff to file the suit.
3. The defendants by their written statement had denied and disputed the entire claim of the plaintiff. Giving parawise reply to the averments in the plaint, the Page 2891 defendants pleaded that they had never executed demand promissory note for sum of Rs. 2.53 lakhs nor did they execute any letter of guarantee in favour of the plaintiff Bank on the dates as alleged in the plaint. The defendants had, however, admitted that they had applied for loan of Rs. 1.83 lakhs and for further cash credit facility and against which total amount sanctioned by the bank was Rs. 2.13 lakhs only and have questioned the claim of the bank as to the basis for executing any demand promissory note for a sum of Rs. 2.53 lakhs when the loan sanctioned was only Rs. 2.13 lakhs. The defendants have further pleaded that at the time when the loan was sanctioned to them on 26.3.1974, there was no demand by the bank for furnishing guarantors for the loan and as such, defendants 4 and 5 were never required to stand guarantors personally for the loan advanced to defendant No. 1 or to create any equitable mortgage of immovable properties by way of additional security. Denying the plaintiff's claim, the defendants have pleaded that even otherwise, the alleged correspondence between the plaintiff bank and defendants, delivery letter of deposit of title deeds even if constitute mortgage in writing of any immovable property, it is liable to be compulsorily registered and in absence of any registered deed of mortgage, the plaintiff has no right to make defendants No. 4 and 5 liable personally. Further pleadings of the defendants is that on the initial date, when the loan for a limited amount was sanctioned by the bank on 26.3.1974 several blank printed forms signed by the defendants were obtained by the then Manager of the bank without allowing the defendants to read the same or to put dates on the papers and these documents were later on conveniently converted into documents of purported hypothecation and guarantee executed on imaginary dates by the Bank for illegal gain from the defendants. The defendants have likewise denied to have accepted or acknowledged or confirmed the correctness of any balance confirmation sheet of the Bank to the extent of liability of Rs. 5,21,915/- and have specifically denied to have borrowed any money beyond the sanctioned amount of Rs. 2.13 lakhs and have claimed that they had paid off the entire dues by way of monthly instalments. The defendants have further denied the correctness of the balance sheet and the ledger account claimed by the Bank. The defendants have further pleaded that the suit is not maintainable for non-joinder of necessary parties as because the plaintiff bank had got its claim against the defendants insured from the Reserve Bank of India and deducted monthly premium from the defendants' Account and under such circumstances, the defendants were entitled to the benefit of insurance and for the amount of dues claimed against the defendants. The plaintiff bank has already preferred its claim against Reserve Bank of India and until such claim is rejected by the Reserve Bank of India, the suit against the defendants for the same amount is not maintainable and therefore, the Reserve Bank of India ought to have been impleaded as a necessary party. The defendants have also pleaded that the suit is barred by law of limitation.
Thus, while denying the entire claim of the plaintiff, the defendants have made a qualified partial admission that they had applied for and obtained a term loan of Rs. 1.83 lakhs and further amount of Rs. 30,000/- (rupees thirty thousand) only by way of cash credit facility in the month of March, 1974, but add that the entire amount has been repaid by them by way of monthly instalments and as such, they do not owe any money whatsoever to the Bank.
Page 2892
4. At the trial, no evidence was adduced on behalf of the plaintiff. Instead, the provisions of Order 12 Rule 6 of the Code of Civil Procedure was sought to be invoked by the plaintiff on the ground that since the defendants had admitted to have borrowed the loan amount and since the documents including the demand promissory notes, letter of hypothecation and letters of acknowledgement of the debt were signed and executed by the defendants, the original of which were filed along with the plaint in the suit, the plaintiff is entitled for a decree in its favour on the basis of such admission for the reliefs claimed.
5. Learned court below on considering the pleadings of the defendants as contained in the written statement has observed that the defendants have not specifically admitted the claim of the plaintiff and as such, in absence of proof of claim advanced by the plaintiff, the suit cannot be decreed in favour of the plaintiff and further, by accepting the defendants' plea that the suit is barred by limitation and also bad for non-joinder of necessary parties and non-registration of the mortgage deeds, the learned court below dismissed the suit.
6. The appellant has assailed the impugned judgment and decree of the learned court below on the ground that the learned court below has committed error of record in holding that the suit suffered from inherent defects in view of the failure on the part of the plaintiff to adduce oral or documentary evidence in spite of sufficient opportunities given to them, whereas the fact is that the entire documents on the basis of which the plaintiff has relied for its claim, were already filed along with the plaint. The further ground is that the learned court below ought to have considered that in para 10 of the written statement of the defendants, a categorical admission of the claim of the plaintiff has been made by them and therefore in the light of such admission, the learned court below ought to have decreed the suit in favour of the plaintiff under the provision of Order XII Rule 6 of the Code of Civil Procedure. Further ground of the appellant is that the learned court below has erroneously held the suit as being barred by limitation merely on the basis of the statement made by the defendants in their written statement, without considering the fact that since the claim of the plaintiff is based upon equitable mortgage, the period of limitation would be 12 years as applied under Article 62 of the Limitation Act and as such, the suit could not be barred under the Law of Limitation. It is further argued that the learned court below has wrongly held that equitable mortgage is hit under the provisions of the Indian Registration Act and is not enforceable for non registration whereas under the law, no registration is required in case of equitable mortgage created merely by deposit of the title deed. Further fault sought to be pointed out by the appellant in the impugned judgment is in its acceptance of the claim of the defendants that the person who had filed the suit on behalf of the bank was never authorized or had any power of attorney to file the suit on behalf of the plaintiff bank. Learned Counsel for the appellant submits that by acknowledging the fact of taking the loan and of executing corresponding documents which in essence are demand promissory notes, hypothecation deeds and mortgage deeds, the defendants have virtually admitted the plaintiff's claim and yet the defendants want to dispute the plaintiff's right to enforce its claim on grounds which are wholly untenable.
7. The respondents have denied and disputed the entire grounds advanced by the appellant stating that the grounds are misconceived and not maintainable. The respondents would argue that the defendants have never admitted the claim of the Page 2893 plaintiff at all, and each of the averments in the plaint has been specifically denied by the defendants. Learned Counsel for the respondents explains that the plaintiff had filed its petition dated 11.3.1997 under Order 12 Rule 6 of the Code of Civil Procedure for disposal of the suit on the basis of purported admission of its claim by the defendants against which the defendants had filed rejoinder on 19.3.1997 wherein they had reiterated their denial of the plaintiff's entire claim. Learned Counsel would explain that even if the defendants had acknowledged to have obtained term loan of Rs. 1,83,000/- (rupees one lakh and eighty three thousand) and a further loan of Rs. 30,000/- under cash credit facility, but they have also claimed to have refunded the entire loan amount by way of monthly instalments and as such, it cannot be said that the defendants had accepted the claim of the plaintiff in respect of the alleged dues. The defendants have also denied and disputed the correctness and genuineness of the balance sheet and ledger account pertaining to the bank account of the defendants and have also denied to have executed any deed of hypothecation of goods or property as security for repayment of the loan amount. They have also challenged the plaintiff's act of clubbing the term loan account and the cash credit account and the interest calculated at a higher rate on the total amount as being illegal and contrary to the original terms leading to an inflated and imaginary amount of purported dues.
8. The question which arises for determination is as to whether the learned court below was wrong in refusing to dispose of the suit in favour of the plaintiff under Order XII Rule 6 of the Code of Civil Procedure.
Order XII Rule 6 of the Code of Civil Procedure reads as follows:
Judgment on admissions :- (1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions.
(2) Whenever a judgment is pronounced under Sub-rule (1) a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced.
9. The object of the Rule, as is obvious, is to enable the party to obtain speedy judgment at least to the extent of the relief to which, according to the admission of the defendants, the plaintiff is entitled and the provision of the Rule would be applicable where a claim is admitted enabling the court within its jurisdiction to enter judgment for plaintiff and pass decree on the admitted claim. However, the admission as taken in the written statement must be taken as a whole and, not in part, and the admission must be of such nature as to acknowledge claim of the plaintiff even if such acknowledgement refers to part of the claim. The pre-requisites for passing a decree on admission is existence of unconditional, unambiguous and clear admission. The pleadings have to be read and construed as a whole to see its effect. A line or two cannot be taken out of context and used as an admission of a party entitling the other for passing of a judgment upon admission. The admission, if any, should be unequivocal and a clear positive admission. The Rule contemplates that there must be a claim as laid down in the plaint which is admitted for the grounds stated therein and not simply an admission of cause of action.
Page 2894 Furthermore, as would be evident from the provisions of the Rule itself, judgment on admission is not a matter or right. Rather, it is a matter of discretion of the court. Where the defendant raises objection, which will go to the root of the case, it would not be appropriate on the part of the court to exercise the discretion. In cases involving questions to be decided upon regular trial and the purported admissions are not clear and specific, it may not be appropriate to take recourse to this provision.
10. In the case of Razia Begum v. Anwar Begum , it was held that Order XII Rule 6 has to be read along with the proviso to Rule 6 of Order VIII, that is to say, notwithstanding the admission made by the defendant in his pleadings, the court may still require the plaintiff to prove the facts pleaded by him in the plaint.
Same principle of law has been reiterated by the Supreme Court in the case of Balraj Taneja v. Sunil Madan and relied upon by the Division bench of the Delhi High Court more recently in the case if Vijay Gupta v. Ashok Kumar Gupta .
11. In the instant case, from the pleadings of the defendants as contained in their written statement, it would transpire that the defendants have not acknowledged the claim of the plaintiff in to to. The defendants have denied their liability to pay any amount whatsoever to the plaintiff. The defendants have also denied and dispute the genuineness of the documents relied upon by the plaintiff in support of the claim for money. Even if the defendants admit to have obtained loan for Rs. 2.13 lakh, but have also claimed to have repaid the money by way of monthly instalments. Mere acknowledgement on the part of the defendants that they had taken loan of Rs. 2.13 lakhs while adding at the same time that the amount of aforesaid loan has been repaid to the bank, cannot be considered as an admission of claim of the plaintiff for the purpose of adjudicating the claim of the plaintiff and to decree the suit in favour of the plaintiff.
12. The defendants have further raised serious dispute relating to the genuineness of the documents claimed by the plaintiff pointing out that even according to the statements contained in the plaint, the term loan was sanctioned for Rs. 1.83 lakhs and the loan under the cash credit facility was Rs. 30,000/- (rupees thirty thousand) and even if both the amounts are taken together, the total amount would be Rs. 2.13 lakhs only and there could be no occasion whatsoever for any of the defendants to execute any demand promissory note for the amount of Rs. 2.53 lakhs. This, and other similar questions on fact as raised by the defendants could not possibly be determined without evidence. It cannot therefore be said to be a case of an unequivocal and clear positive admission on the part of defendants. The questions raised would involve issues, which could be decided only after the parties had led evidence.
13. From the impugned judgment, it transpires that amongst the several grounds assigned as reasons for dismissing the suit, the learned trial court has also considered that the suit is based on documents and in absence of documentary evidence, no decree can be passed. It has also observed that it is not clear as to what part of the dues was satisfied and what part of the dues was not satisfied by the defendants as per the pleadings in paragraph 8 of the plaint. The learned court below has rightly held that the facts and circumstances of the case and denial of the plaintiff's claim by the defendants, the discretion under Order XII Rule 6 of the Code of Civil procedure cannot be exercised in favour of the plaintiff. As rightly held by the learned court Page 2895 below, it was incumbent upon the plaintiff to adduce evidence by way of proof in respect of its claim against the defendants in the light of the denial of the claim made by the defendants of the entire claim of the plaintiff.
14. For the reasons aforesaid, I do not find any illegality in the impugned judgment and decree passed by the learned trial court in the Title (Mortgage) Suit No. 30 of 1983. The appeal is without any merit and is therefore dismissed.