Bangalore District Court
Canara Bank vs M/S Sri Raghavendra Enterprises on 15 December, 2016
IN THE COURT OF XVII ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE, BENGALURU (C.C.H.16)
Present: Sri. Ravindra Hegde,
M.A., LL.M.
XVII Addl. City Civil & Sessions Judge.
Dated this 15th Day of December, 2016
O.S.No. 8033/2012
Plaintiff/s : Canara Bank
A body Corporate incorporated
Under the Banking Companies
[Acquisition & Transfer of
Undertaking] Act, 1970
Having one of its branches at
Kempegowda Nagar Branch,
Bengaluru
Rep. by its Manager.
[By Sri.P.H.Raghupathi - Adv.]
-Vs-
Defendant/s : 1. M/s Sri Raghavendra Enterprises
No.10, 1st Floor, Roopa Complex,
3rd Main Road, Chamrajpet,
Bengaluru - 560 018,
Rep. by its Managing Partner
Sri. G.T.Jayaprakash
2. Sri. G.T. Jayaprakash
S/o G.Tippu Rao
Aged about __ years,
Managing Partner of
M/s Sri Raghavendra Enterprises
No.140, S.L.N. Krupa
5th Phase, 2nd Main, 1st Stage,
West of Chord Road,
Bengaluru - 560 044
3. Sri. K.Vijaya Kumar Rao
S/o K.Vasudeva Rao
Partner of
M/s Sri Raghavendra Enterprises
Sri. Gururakshe, 2nd Cross,
1st Stage, Vinobha Nagar
Shimoga - 577 201
2 OS.No.8033/2012
4. Mr. Vasudeva Rao
Partner of
M/s Sri Raghavendra Enterprises
No.140, S.L.N. Krupa
5th Phase, 2nd Main, 1st Stage,
West of Chord Road,
Bengaluru - 560 044
[D1, 2 & 4 - Exparte]
[D3 by Sri. K.S.J., Adv.]
Date of institution of the suit 13.11.2012
Nature of the suit Money suit
Date of commencement of 06.2.2014
recording the evidence
Date on which the judgment 15.12.2016
was pronounced
Total duration Years Months Days
04 01 02
(Ravindra Hegde),
XVII Addl. City Civil & Sessions Judge.
*********
JUDGMENT
This suit is filed by the plaintiff for recovery of Rs.6,56,835/- [Rupees Six Lakhs Fifty Six thousand Eight Hundred Thirty Five only] from the defendants along with interest @ 17.25% p.a. compounded monthly from the date of suit till realization of the entire amount along with costs.
2. The case of the plaintiff in brief is that, the plaintiff is a banking company having its branch at Kempegowda Nagar, Bengaluru and is represented by its 3 OS.No.8033/2012 Manager. The 1st defendant is a partnership firm to which the defendants 2 to 4 are the partners. 2nd defendant is the Managing Partner of the firm. During the course of their business, defendants 2 and 3 applied to plaintiff bank for opening the current account in the name of 1st defendant on 29.6.2000 and accordingly, they have opened a current account in the name of 1st defendant. While opening the current account, both the partners had agreed for operating the current account severally. The defendants requested for TOD to the said account for the limit of Rs.1,00,000/-. Plaintiff bank has allowed the said facility. The defendants have agreed to repay the said over drawal amount with interest. The defendants have submitted a cheque issued in favour of the defendant firm and sought for discounting. The said cheque dated 30.12.2006 drawn on Corporation Bank issued by Vasundara J.P. in favour of 1st defendant was dishonoured for insufficient funds. For this loan on TOD on Cheque, the defendants were due in a sum of Rs.1,08,842.77 as on 18.7.2007. Despite promise to discharge the liability, the defendants have not discharged the same. They have executed letter of revival dated 11.11.2009. As on 31.10.2012, the defendants were liable to pay Rs.2,94,907.77 in this TOD loan account which is shown as 'A' account in 4 OS.No.8033/2012 the plaint. During the course of their business, the defendants have also applied for O.D. facility for working capital of defendant No.1 to the tune of Rs.9,00,000/- and submitted an application dated 30.5.2004. The 1st defendant represented by defendants 2 and 3 had executed 3 letters for loan against terms deposits on 3 dates and on demand promissory notes were also given by them. Despite promise to discharge their liability, the defendants have not cleared the loan amount which is shown as 'B' account in the plaint. The defendants have neglected to pay the amount, but they have executed the letters of revival on 3.5.2007 and 11.11.2009. In this loan account, there is due of Rs.3,59,975.99 as on the date of the suit. For the dues in both the loan accounts, defendants are liable to pay interest @ 17.25% p.a. compounded quarterly and also liable to pay 2% penal interest. The defendants in spite of notice, have not made the payment. In respect of both loan 'A' account and 'B' Account, total of Rs.6,56,835/- is due from the defendants and said amount is claimed with interest.
3. The defendants 1, 2 and 4 have remained exparte. The 3rd defendant has filed the written statement denying various averments of the plaint. He has admitted that 1st 5 OS.No.8033/2012 defendant is a partnership firm and on 29.6.2000, defendants 2 and 3 applied to the plaintiff for opening Current account in the plaintiff bank in the name of 1st defendant. The other averments have been denied. The defendant has denied availing of any loan from the plaintiff bank for the business by the 1st defendant as stated. The liability of the 3rd defendant to pay any amount to the plaintiff with interest as stated has been denied and disputed. The 3rd defendant has stated that the plaintiff issued a notice under RPAD to the defendant on 9.3.2009 which was suitably replied on 20.3.2009. Thereafter, the plaintiff got issued another notice on 8.6.2012 and that was also suitably replied by the defendant on 18.6.2012. It is stated that no cause of action has arisen to file the suit against the 3rd defendant. It is stated that the plaintiff ought to have instituted the suit within 3 years from 9.3.2009 and this suit is instituted on 13.11.2012 after the lapse of 3 years, is barred by limitation. It is stated that the defendant No.2 and 3 are the only 2 partners at the inception of the 1st defendant and it was unregistered. It is stated that barely six months after the formation of 1st defendant, the 3rd defendant has come out from the 1st defendant and when 4th defendant has become the partner of the 1st defendant firm is not within 6 OS.No.8033/2012 his knowledge and he has not seen any reconstituted deed. He has stated that except for opening of the current account on 29.6.2000 in the name of 1st defendant, he has not signed on any papers seeking either for financial facility or O.D. facility including but not limited to account opening forms, loan application forms, on demand promissory notes etc. It is stated that the 3rd defendant is not liable to pay any amount to the plaintiff and plaintiff is not entitled for any of the reliefs from the defendant. For these reasons, he has prayed to dismiss the suit with costs.
4. On these pleadings, my learned predecessor has framed the following Issues and additional issues: -
1) Whether the plaintiff bank proves that defendants have obtained TOD facility on their Current Account to the limit of Rs.1,00,000/-?
2) Whether the plaintiff proves that they have given the discount to the cheque and the said cheque issued by defendant No.4 was dishonoured?
3) Whether the plaintiff bank proves that defendants have executed revival letter on 11.11.2009?
4) Whether the plaintiff bank proves that defendants have obtained Over Drawal Facility to the tune of Rs.9,00,000/- and they have executed letters for loans/advances against term deposits and On-demand Promissory Note on 30.05.2004, 19.06.2004?7 OS.No.8033/2012
5) Whether the defendants prove that without understanding the contents of the documents they have signed on the bank documents and as such, they are not liable to pay the suit claim?
6) Whether the plaintiff bank proves that the defendants are liable to pay Rs.2,96, 859/- towards TOD as on the date of the suit?
7) Whether the plaintiff bank proves that the defendants are liable to pay Rs.3,59,975/- towards Over Drawal Facility as on the date of the suit?
8) Whether the plaintiff bank proves that the defendants are liable to pay the future interest? If so, what would be the future rate of interest?
9) What order or decree?
Addl. Issues:
1) Whether the plaintiff bank proves that defendant No.1 is a partnership firm and defendant No.3 is the partner of defendant No.1 firm?
5. In support of the plaintiff's case, PW.1 and 2 are examined. Ex.P1 to P22 are marked. For defendants, 3rd defendant has been examined as DW.1.
6. Heard the arguments.
7. My answer to the above issues are as under:- 8 OS.No.8033/2012
Issue No.1: In the Affirmative as against defendants 1 and 2 Issue No.2: In the Affirmative as against defendants 1 and 2 Issue No.3: In the Affirmative as against defendants 1 and 2 Issue No.4: In the Affirmative as against defendants 1 and 2 Issue No.5: Does not arise Issue No.6: In the Affirmative as against defendants 1 and 2 Issue No.7: In the Affirmative as against defendants 1 and 2 Issue No.8: In the Affirmative as against defendants 1 and 2 Addl. Issue No.1: Partly in the Affirmative Issue No.9: As per final order, for the following:
REASONS
8. Additional Issue No.1 :- The plaintiff has stated that 1st defendant is a partnership firm and defendants 2 to 4 are the partners of 1st defendant firm. The 3rd defendant in his written statement has contended that he was partner of the 1st defendant only at the inception and only defendants 2 and 3 were the two partners and it was unregistered firm and after 6 months, the 3rd defendant has come out of the partnership firm and when 4th defendant has become the partner, is not within his knowledge.
9. The Managers of the plaintiff Bank have given evidence as P.W.1 and 2. P.W.2 was the Manager at the 9 OS.No.8033/2012 relevant period from 1.6.2003 to 31.5.2005. In the cross- examination, he admitted that except the signature on Ex.P1, the 3rd defendant has not signed any documents pertaining to loan transaction. He has admitted that usually the liability and role of each partner and power of the managing partner is mentioned in the partnership deed and admitted that the 1st defendant has deposited Rs.10,00,000/- and borrowed Rs.9,00,000/- as loan and has stated that he has not produced any documents to show that 3rd defendant was partner of the firm as on the date of borrowing the loan and as on the date of filing the suit.
10. P.W.1 who is the present Manager in his chief- examination, has stated his case. In his cross-examination, he has stated that they will take partnership deed at the time of opening partnership account and he does not whether partnership deed was taken at the time of opening the account of 1st defendant. He has stated that he can produce the partnership deed before the court. He has admitted that the 3rd defendant has not signed any documents except Ex.P1. He has admitted that as per Ex.P17, 3rd defendant has informed that he is not partner of the firm. He has admitted 10 OS.No.8033/2012 that they have not produced any documents to show that defendant No.3 is the partner of the 1st defendant firm.
11. Ex.P1 is account opening form, in which the signatures of both defendants 2 and 3 as partners of 1st defendant are appearing. The plaintiff has produced the original cheque, cheque return memo, letter of revival, request for OD facility etc., as Ex.P2 to P14. But in these documents, admittedly there is no signature of 3rd defendant. Ex.P15 is the legal notice which was given to the defendants 2 and 3 on 8.6.2012 and the reply is marked as Ex.P16. This is given by 3rd defendant, wherein the 3rd defendant has specifically stated that, he has no liability. The letter dated 20.3.2009 given by 3rd defendant to the plaintiff bank as reply to the letter of the plaintiff bank dated 9.3.2009 is produced as Ex.P17.
12. The 3rd defendant in his evidence given as DW1, has stated that though he was a partner of the firm initially, he has come out of the firm long back. He has admitted his signature in Ex.P1. He has admitted that he was partner of the firm earlier. He has admitted that Ex.P16 and P17 are the replies given by him. He has admitted that before giving 11 OS.No.8033/2012 Ex.P16 and P17, he has not informed the plaintiff bank that he has not continued as partner of the firm.
13. There is no dispute that 1st defendant is partnership firm and 2nd defendant is its managing partner. 3rd defendant, though admitted that he was partner of this firm earlier, he contended that he was partner only for 6 months and the suit transactions are not done when he was partner and therefore he is not liable for the suit claim amount. To show that the 1st defendant is firm and defendants 2 to 4 are its partners, the plaintiff has produced the account opening form at Ex.P1. By Ex.P1, account has been opened in the name of 1st defendant firm to which the defendants 2 and 3 have signed as partners. This account opening was done on 29.6.2000. Except this account opening form, the plaintiff has not produced any other documents to show that the 1st defendant firm consists of defendants 2 to 4 as its partners. Name of the 4th defendant is not appearing in any of the documents produced by the plaintiff. Absolutely there are no materials to show that defendant No.4 was a partner of the 1st defendant firm at any time. Even the notice given by the plaintiff as per Ex.P15 is not to defendant No.4. Therefore, there are no materials to show that 4th defendant 12 OS.No.8033/2012 is a partner of 1st defendant firm. In Ex.P1, it is mentioned that a partnership letter executed by all the partners has been given by the plaintiff bank. But no such partnership letter given by defendants 1 to 3 is produced by the plaintiff. Both the loan accounts stated by plaintiff are of the year 2004 and 2006. According to the 3rd defendant, he was not partner of the said firm during this period.
14. As stated above, Ex.P1 is the only document which show that the 3rd defendant is also partner of the firm. For obtaining the loan on the basis of the cheque given by Vasundara J.P. as per Ex.P2, the 3rd defendant is not a signatory. Even the letter of revival at Ex.P4 in respect of this loan, does not contain the signature of defendant No.3. Even in respect of O.D. facility obtained by 1st defendant firm, 3rd defendant has not signed. But interestingly, along with the signature of 2nd defendant, there is signature of another partner, which, on bare reading appears to be that of person named Vasundara. Admittedly there is no signature of 3rd defendant. Therefore, at the time of Ex.P5 OD facility obtained by the 1st defendant from the plaintiff bank, the 3rd defendant has not signed the request for OD facility. But along with 2nd defendant, some other partner has signed the 13 OS.No.8033/2012 said request for OD facility. Who is that partner is not stated by plaintiff. When the plaintiff sanctioned the OD facility on this application Ex.P5, plaintiff should be aware that who is the said partner who signed the said application. In Ex.P1, there is signatures of only defendants 2 and 3, but in Ex.P5 there is signature of another partner and there is no signature of 3rd defendant. Therefore, it is clear that there is some other partner to the firm. Though such other partner has not signed Ex.P.1, the plaintiff has sanctioned OD facility by taking her signature and without insisting for signature of 3rd defendant. Defendant No.3 has clearly stated that 1st defendant is an unregistered partnership firm. P.W.1 has stated that at the time of giving loan, they will obtain partnership deed. No such document is produced. If defendants 2 and 3 were the only two partners of the 1st defendant and they continued to be partners of the firm even now, then definitely the plaintiff would have insisted for signature of the 3rd defendant in Ex.P5. Even otherwise, when there is signature of another partner other than defendants 2 and 3 in Ex.P5, the plaintiff would have definitely enquired as to who is the said partner and on what basis he has signed the said request for OD facility.
14 OS.No.8033/2012
15. Naturally, if 3rd defendant continued as partner of the 1st defendant firm even in 2004, when Ex.P.5 was given, the plaintiff bank would have insisted for signature of 3rd defendant or would have enquired as to who is the other partner who has signed Ex.P5. The person who has signed as partner of the 1st defendant firm and obtained the OD facility of Rs.9,00,000/-, which is the loan 'B' account of the present suit, is not party in the present suit. The said person who has signed Ex.P5 has not signed Ex.P1. If somebody else have taken the loan by stating that he is the partner of the 1st defendant firm, how the 3rd defendant will be liable, is to be explained by the plaintiff. Plaintiff is a banking institution and admittedly they receive the required documents at the time of sanctioning the loan. It is mentioned in Ex.P1 that partnership letter has been given to the plaintiff bank. Such partnership letter is not produced. In Ex.P1 it is stated that they will obtain partnership deed, such partnership deed is not produced. This partnership account was opened in the year 2000 and the loan of OD facility as per Ex.P5 was given in 2004. For this alleged OD facility, the 3rd defendant has not signed and some other person has signed along with 2nd defendant as partner and that some other person who has signed Ex.P5 may be the partner of the firm, but he is not 15 OS.No.8033/2012 included in the present suit and there is nothing mentioned in the plaint. When his signature is taken as a partner of the firm in Ex.P5 and on that basis loan OD facility is also given, there should be some documents showing the said signatory as a partner of the firm. No such documents are produced by the plaintiff.
16. Ex.P 1 and 5 clearly show that though the account was opened by defendants 2 and 3 as partners of the 1st defendant firm, subsequently, some other partner has come to the firm and 3rd defendant has not continued as partner of the firm and it is even within the knowledge of the plaintiff, as it has not insisted for his signature in Ex.P5. Except in Ex.P1, in none of the documents, there is signature of 3rd defendant. Apart from this, 3rd defendant has sent a letter to the plaintiff bank on 20.3.2009 as per Ex.P17. In Ex.P.17, 3rd defendant has clearly stated that 1st defendant Raghavendra Enterprises is an unregistered firm of which he was a partner and other partner was Jayaprakash and the firm had only two partners and he has never borrowed any loan and nor authorized any other person to do so and if any loan is advanced to the firm and allowed the other partner to take OD facility without his knowledge, it is at the risk of the 16 OS.No.8033/2012 bank. He has also stated that he has never obtained any OD facility from the plaintiff bank either in his individual capacity or as partner of Raghavendra Enterprises. He has also stated that he has no financial transactions with the plaintiff bank and he is not liable to pay any amount. Therefore, in this letter of the year 2009, the 3rd defendant has made it clear by denying his liability to make any payment to the plaintiff bank.
17. Though the 3rd defendant has denied his liability to pay any amount in Ex.P17 letter and also denied the availing of any loan for the partnership firm, the suit is not filed within 3 years and the present suit is filed on 13.11.2012 i.e., after 3 years. Even after denial of the liability by 3rd defendant, the plaintiff bank has not filed the suit within 3 years and has relied on the alleged loan revival letter given by the 2nd defendant on 11.11.2009. When on 20.3.2009, the 3rd defendant has denied his liability by sending a letter as per Ex.P17, the plaintiff ought to have taken action for recovery as against defendant No.3.
18. Only because there is an account opening form in which 3rd defendant has signed, it cannot be said that he is liable for loan 'A' and 'B' accounts as stated by the plaintiff. 17 OS.No.8033/2012 The plaintiff who has approached the court have to prove that 3rd defendant has continued as partner of the firm. Ex.P5 show that in 2005 somebody else was partner of the firm. Plaintiff except producing Ex.P1, has not produced any other documents to link the transaction to the 3rd defendant. In the presence of Ex.P5, it would be clear that 3rd defendant has not continued as partner of the firm and it is within the knowledge of the plaintiff. Otherwise, the plaintiff would have refused to sanction OD facility to the 1st defendant firm, when other partner of the defendant firm has not signed and some other person has signed the document, who is not the partner of the firm. Hence, evidence before the court would clearly show that though 3rd defendant was partner of the firm at the time of account opening of 1st defendant firm, he has not continued as partner of the firm.
19. The learned counsel for the plaintiff has drawn my attention to the decision reported in AIR 1964 S.C. 581 - Gajendra Narain Singh Vs. Johrimal Pralhad Rai, in which by considering Order 30 Rule 6 of C.P.C., the Hon'ble Supreme Court has held that :-
"Where a person is served with summons as a partner of the defendant firm and he files an appearance without protest, his appearance must be deemed to be on behalf 18 OS.No.8033/2012 of the firm. And unless the Court permits him to withdraw the appearance initially filed, it continues to be an appearance under Rule 6 of Order 30 on behalf of the firm."
On going through the decision, the facts are different from the present case and it is not helpful to the plaintiff. In the present suit, 3rd defendant has appeared on summons and he has filed the written statement denying his liability. His contention is not that he was not the partner of the firm, but he has come out the partnership firm. Even the document produced by the plaintiff itself show that somebody else is a partner of the firm other than defendant No.3 and though he was partner at the time of opening the account, by 2004 when OD facility was obtained, he was not the partner of the firm and plaintiff who has approached the court has not produced any documents to prima facie show that 3rd defendant is the partner of the firm. In another decision reported in AIR 1976 S.C. 1703 - Mohatta Brothers Vs. The Bharat Suryodaya Mills Co. Ltd., Ahmedabad, under Order 30 Rule 2 of C.P.C., the Hon'ble Supreme Court has held that:-
"In a suit for recovery of money against the partnership firm, it would be open to the plaintiff to prove that a person is a partner of the defendant firm despite the 19 OS.No.8033/2012 denial of that fact by that person as well as the other partners of the defendant firm."
In the present case, though the plaintiff bank is entitled to prove that the 3rd defendant is the partner of the firm even though he has denied the same, plaintiff has not made any efforts to prove that 3rd defendant is the partner of the firm. Therefore, this decision also does not help the plaintiff. In another decision reported in AIR 1996 Madhya Pradesh 37
- Harikishan Shivhare S/o Shri Ram Gwalior Vs. State of Madhya Pradesh, the Hon'ble High Court has held that :-
"Liability created against firm while it was carrying on business as firm, then all the partners would be liable to discharge the liability."
In the present case, admittedly the person who has signed as a partner is not party to the present suit. Therefore, the decision does not help the plaintiff. In AIR 2005 S.C. 3434 - Ashutosh Vs. State of Rajasthan and others, the Hon'ble Supreme Court has considered another decision of the Hon'ble Supreme Court in which it has been held that :-
"Every partner is liable for all the acts of the firm done while he is a partner jointly along with other partners and also severally. Therefore, it cannot be held that the said liability ceases merely because a partner has ceased to be partner subsequent to the said period."20 OS.No.8033/2012
In the present case, there is absolutely no materials placed by the plaintiff to show that these transactions stated by the plaintiff are done by the 1st defendant firm when 3rd defendant was partner of the firm. Therefore, the decision does not help the plaintiff. On going through all these decisions and on considering the facts of the present case, the plaintiff has not discharged the initial burden on him to prove that 3rd defendant is the partner of the firm. Though 3rd defendant has admitted that initially he was partner of the 1st defendant firm and then he has come out of the partnership firm, the plaintiff has not produced any documents to show that in the year 2004, when suit 'B' loan was sanctioned and in 2006, when 'A' loan was given, 3rd defendant was partner of the firm. Some other partner who has signed Ex.P5 is not made as party to the suit. Therefore, the plaintiff though proved that the 1st defendant is a partnership firm, it has failed to prove that 3rd defendant is the partner of the 1st defendant firm. Accordingly, the issue No.1 is answered partly in the affirmative.
20. Issue No.1 to 3 & 6:- All these issues are interlinked with each other and are taken together for discussion.
21 OS.No.8033/2012
21. The plaintiff has stated that Defendants 2 and 3 applied to the plaintiff bank for opening current account on 29.6.2000 in the name of 1st defendant and accordingly, current account was opened and in the said account TOD facility was obtained and cheque issued by Vasundara J.P. was presented on 30.12.2006, which was drawn on Corporation Bank and on the basis of the said cheque, defendants have availed Rs.1,00,000/- and this amount was agreed to be repaid by the defendants with interest. The said cheque presented has been dishonoured and thereafter, the defendants have not made the payment and executed revival letter etc.
22. For plaintiff, present Manager and the previous Manager have given evidence as P.W.1 and 2 and have stated their respective case in their chief-examination. In the cross- examination, among all the questions are asked on behalf of defendant No.3 only with regard to liability of the 3rd defendant to pay the amount. Presenting of the cheque of Vasundara for discounting by the defendant No.2 in the account of the 1st defendant in the plaintiff bank, is not denied or disputed in the cross-examination of P.W.1 and 2. The defendants 1 and 2 are exparte in this case. As regards 22 OS.No.8033/2012 liability of the 3rd defendant to pay any amount to the plaintiff bank, it is already held that the 3rd defendant is not the partner of the firm and plaintiff has failed to prove that the defendants 2 and 3 have jointly obtained the loan as stated by the plaintiff. As regard this loan given on the basis of the cheque to the defendants 1 and 2, the plaintiff has produced relevant documents like cheque as Ex.P2, endorsement as Ex.P3 and letter of revival signed by defendant No.2 on behalf of 1st defendant on 11.11.2009 as Ex.P4. These defendants prima facie show that a cheque signed by Vasundara J.P. given to the 1st defendant has been presented by the 2nd defendant to the plaintiff bank for cheque discounting and the plaintiff has paid the amount of Rs.1,00,000/- as TOD facility, but the cheque given by Vasundara J.P. was dishonoured for insufficient funds and thereafter, the amount which was received by 1st defendant was required to be repaid and for this repayment, the 2nd defendant has sought time and has also executed the revival letter on 11.11.2009 as per the statement of account produced by the plaintiff marked at Ex.P21. Inspite of legal notice, the defendants 1 and 2 have not cleared the said loan which is shown as account 'A' in the plaint. The defendants 1 and 2 have not contested the matter.
23 OS.No.8033/2012
23. As discussed above, the plaintiff has failed to show that the defendants 3 and 4 are the partners of 1st defendant and also liable to pay the claim amount made in the suit. As regards defendants 1 and 2, as they are exparte, there is no denial of liability of these defendants. The documents at Ex.P2 to 4 show that on the basis of the cheque, loan was given to the 1st defendant by the plaintiff bank and thereafter cheque was dishonoured and thereafter no payment has been made and revival letter was also executed, thereby extending the limitation and within the time the suit has been filed. As regards, 4th defendant, there are absolutely no documents produced to show that he is the partner of the firm. The learned counsel for the plaintiff in the course of arguments has stated that the name of 4th defendant is inserted by mistake. On looking to all these aspects, the liability of the defendants 3 and 4 in respect of loan account 'A' mentioned in the plaint is not established. As regards the defendants 1 and 2, statement of account, loan revival letter, cheque etc., produced by the plaintiff show that the cheque given in the name of the firm has been presented to the plaintiff bank and amount has been received and cheque has been dishonoured. Thereafter, the plaintiff demanded the defendants to pay the amount, but the 24 OS.No.8033/2012 defendant No.2 has not repaid the loan and has even executed revival letter. As such the defendants 1 and 2 are jointly and severally liable to pay the claim amount in respect of first loan account which is shown as 'A' account. Though issue No.3 is framed stating that cheque was issued by defendant No.4, subsequently, the plaintiff got amended the plaint and stated that cheque was issued by Vasundara J.P. Therefore, it can be held that the plaintiff has proved that it has given the discount to the cheque which was issued by Vasundara J.P. and it was dishonoured. Accordingly, issue No.1 to 3 and 6 are answered in the affirmative as against defendants 1 and 2 only.
24. Issue Nos.4 and 7 :- It is also the case of the plaintiff bank that the defendants 1 and 2 have even availed another loan of Rs.9,00,000/- by submitting the request for O.D. facilities as per Ex.P5 and they have executed necessary documents like letter of loans, pronote etc., and this loan amount is also not repaid by the defendants. The letter of revival alleged to have been given by the 2nd defendant as Managing Partner of the 1st defendant firm on 3.5.2007 and 11.11.2009 are also produced as Ex.P13 and 14 and based on the loan revival letters, the present suit has been filed in 25 OS.No.8033/2012 respect of this send loan. Availing of the loan as O.D. facility by the defendants 1 and 2 and by another partner who is not party to the present suit is evidenced by Ex.P5. Execution of letter of revival by the 2nd defendant is also seen from the records produced. According to the plaintiff, this loan of Rs.9,00,000/- is also not cleared and as per the statement of account, there is due of Rs.3,59,975.99. In respect of second loan shown as 'B' account, defendants 1 and 2 have not disputed their liability by appearing in this case. Both these defendants have remained exparte. With regard to this loan availed by the 1st defendant as O.D. facility and non-payment of the same has been established through evidence of P.W.1 and 2 and by producing the documents. As stated above, the liability of the defendants 3 and 4 for these loans is not established in this case. Defendants 1 and 2 have not disputed the claim of the plaintiff. Moreover, the claim of the plaintiff as against the defendants 1 and 2 is established by producing necessary documents. Therefore, the plaintiff is successful in proving that the defendants 1 and 2 have obtained O.D. facility to the tune of Rs.9,00,000/- by executing necessary documents and they are liable to pay Rs.3,59,975.99 as on the date of the suit towards this loan 26 OS.No.8033/2012 account. Accordingly, these issues are also answered in the affirmative as against defendants 1 and 2 only.
25. Issue No.5 :- This issue is on defendants to prove that without understating the contents of the documents they have signed the bank documents and as such they are not liable to pay the suit claim. But, there is no such pleading in the written statement of the 3rd defendant. He has denied the total liability and contended that he is not partner of the firm at the time of advancing the loan stated in the plaint. It is not the case of the 3rd defendant that without understanding the bank documents, he has signed documents etc. Therefore, this issue does not arise. Accordingly, this issue is answered.
26. Issue No.8 :- As discussed above, the claim as against defendants 1 and its Managing Partner 2nd defendant has been proved in this case. These defendants 1 and 2 have not disputed the claim of the plaintiff by producing the relevant documents. The plaintiff has proved the amount received by the defendants 1 and 2 by cheque discounting and also by O.D. facility. In respect of first transaction shown as 'A' account in the plaint, there is due of Rs.2,96,859/- as on the date of suit and towards second loan, there is due of Rs.3,59,975.99, totally Rs.6,56,835/- is due from defendants 27 OS.No.8033/2012 1 and 2. The plaintiff has prayed future interest @ 17.25% p.a. compounded monthly. On looking to the interest prevailing in the business, it would be proper to award interest @ 12% p.a. on the entire amount from the date of suit till realization of the entire amount. Accordingly, the plaintiff is entitled for recovery of Rs.6,56,835/- along with interest @ 12% p.a. from the date of suit till realization of the entire amount from the defendants 1 and 2 only. Accordingly, this issue is answered in the affirmative.
27. Issue No.9:- For the discussion made on the above issues, following order is passed :-
ORDER The suit of the plaintiff is decreed as against defendants 1 and 2 with costs.
The defendants 1 and 2 are jointly and
severally liable and are directed to pay
Rs.6,56,835/- [Rupees Six Lakhs Fifty Six
thousand Eight Hundred Thirty Five only] along with interest @ 12% p.a. from the date of suit till realization of the entire amount along with costs.
Suit against defendant No.3 and 4 is
dismissed.
Draw decree accordingly.
(Dictated to the judgment writer, transcribed by him, corrected and then pronounced by me in the open court, on this the 15th day of December, 2016).
(Ravindra Hegde), XVII Addl. City Civil & Sessions [ Judge, Bengaluru.28 OS.No.8033/2012
ANNEXURE List of witnesses examined for plaintiff:
P.W.1 K.Sarvesha P.W.2 T.N.Bhat
List of documents exhibited for plaintiff:
Ex.P1 Account opening form Ex.P2 Original cheque Ex.P3 Cheque return memo Ex.P4 Letter of revival Ex.P5 Request for O.D. facility Ex.P6 to 8 Applicants for loans Ex.P9 to 11 Pro-notes Ex.P12 Take delivery letter to DPN Ex.P13 & 14 Letter of revival Ex.P15 Copy of legal notice Ex.P16 Reply notice Ex.P17 Letter Ex.P18 to 20 Returned postal covers Ex.P21 & 22 Statement of account
List of witnesses examined for defendants:
DW.1 K.Vijay Kumar List of documents exhibited for defendants:
Nil XVII Addl. City Civil & Sessions Judge, Bengaluru. ***