Delhi District Court
Punjab & Sind Bank vs M/S Neha Enterprises on 28 July, 2010
IN THE COURT OF SH. RAKESH KUMAR : ADJ03 (C): DELHI Suit No.1148/08 Unique ID no.02401C5764432004 Punjab & Sind Bank A body Corporate constituted under the Banking Companies Act of 1980, having its head office at: "Bank House", Rajendra Place, New Delhi. And having branches amongst others at Babarpur, Delhi. Through Sh. S. S. Bhatia, Sr. Manager, and Sh. H. S. Bhui, Manager. .....Plaintiff. VERSUS 1. M/s Neha Enterprises, Khasra No.299, Village Gokulpur, Shahdra, Delhi. 2. Smt. Manorma Tyagi, Proprietor of M/s Neha Enterprises, 6/221, Yamuna Vihar, Delhi - 53. 3. Sh. P.K. Tyagi, 6/221, Yamuna Vihar, Delhi - 53. 4. Sh. Bhawani Singh, S/o Sh. Sultan Singh, R/o 9/4132, Dharampura, Ajeet Nagar, Delhi - 31. 5. Sh. Jagdev Singh, S/o Sh. Sultan Singh, R/o 9/4132, Dharampura, Ajeet Nagar, Delhi - 31. .....Defendants. Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 1 of pages 38 Date of institution of Suit : 04.10.2004. Date in which case fixed for orders : 16.07.2010. Date of pronouncement of Judgment : 28.07.2010. J U D G M E N T
1. The present suit for recovery has been filed by the aforesaid plaintiff against the aforementioned defendants interalia seeking the following reliefs:
(i).to pass a decree for a sum of Rs.9,63,078/ (Rs. Nine Lakh Sixty Three Thousand Seventy Eight Only) in favour of the plaintiff bank and against the defendants alongwith pendentelite and future interest @ 13% per annum with monthly rest on the suit amount from the date of the institution of the suit tills realization.
(ii).the hypothecated machinery and stock owned by the defendant may also be attached and may be auctioned in the public and the amount so recovered shall be ordered to be deposited in the loan amount of the defendant.
(iii).Cost of the suit is also demanded.
2. As per plaint, the plaintiff a bank {constituted and function under the Banking Companies Act (Acquisition and transfer of undertaking) at no.5 of 1980 through Sh. H. S. Bhui, Manager and Sh. S. S. Bhatia, Senior Manager of the plaintiff bank being the principal officers and authorized persons of the plaintiff bank has instituted the instant suit for recovery against the aforesaid defendants. The defendant no.2 being the Proprietor of defendant no.1 approached the plaintiff bank for financial assistance in the shape of C.C. Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 2 of pages 38 (Hyp.) Limit to the tune of Rs. Three Lakhs, a term loan to the tune of Rs.1.50 Lakhs and Bill Discount Limit to the tune of Rs. One Lakhs against the hypothecation of stock of PCC wire, rawmaterial semifinished, finished goods, machinery etc. The defendant no.2 had also offered to secure that loan by equitable mortgage of immovable property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi 31, which was owned by one Sh. Mangal Das and the defendant assured the bank that he would stood as guarantor alongwith defendant no.3 against the said facilities and Sh. Mangal Das also mortgaged his aforesaid property to secure the loan facilities. The plaintiff bank acceded the request of the defendant no.1 & 2 and granted the aforesaid facilities to the defendant no.1 & 2 vide sanctioned letter dated 01.06.1996 and against the said facility, the defendant no.3 stood as guarantor alongwith one Sh. Mangal Das, who also mortgaged his property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi while depositing the original title deeds with the plaintiff bank i.e. original sale deed dated 27.02.1963, which is duly registered under documents no. 2521 AB No.I, Vol. No.904 on pages 2425 entered on 08.03.1963. The defendant no.2 being the proprietor of defendant no.1 had executed the following loan documents on 17.06.1996 in respect of term loan to the tune of Rs.1.50 Lakhs and duly availed the said loan facilities:
(i).Form No.14, Demand Promissory Note.
(ii).Form No.126, Letter of recall.
(iii).Form No.291, Agreement to pay penal interest.
(iv).Form No.103, Agreement to pay installment.
(v).Form No.106, Letter of waiver.
Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 3 of pages 38
(vi).Form No.216, Not entitled for agriculture benefit.
(vii).Form No.192, Agreement of hypothecation.
The said documents were got revalidated from time to time and the defendant no.3 alongwith the alleged Mangal Das executed the guarantee bond in favour of the plaintiff bank and the said Mangal Das also executed the Form No.84AA and deposited the original title deed in respect of his property no.IX/4132, Ajit Nagar, Gandhi Nagar, Delhi and thus created a valid equitable mortgage with the bank. Before granting the said loan to the defendant the value of the property was duly assessed by the valuer. The defendant no.2 being the proprietor of defendant no.1 had executed and delivered the following loan documents on 26.06.1996 in respect of CC (Hyp.) Limit of Rs. Three Lakhs:
(i).Form No.14, Demand Promissory Note.
(ii).Form No.126, Letter of recall.
(iii).Form No.291, Agreement to pay penal interest.
(iv).Form No.159, Letter of continuity.
(v).Form No.106, Letter of waiver.
(vi).Form No.216, Not entitled for agriculture benefit.
(vii).Form No.192, Agreement of hypothecation.
The defendant no.2 being the proprietor of defendant no.1 had executed and delivered the following loan documents on 07.08.1996 in respect of another Term Lona Limit of Rs. One Lakh:
(i). Form No.14, Demand Promissory Note.
(ii).Form No.291, Agreement to pay penal interest.
(iii).Form No.106, Letter of waiver.
(iv).Form No.216, Not entitled for agriculture benefit.
(v).Form No.192, Agreement of hypothecation.
Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 4 of pages 38 Thereafter, on the request of defendant no.1 to 3 and their representation for enhancement of the said facility, the plaintiff bank had acceded to their request and enhanced the CC (Hyp.) Limit from Rs. Three Lakhs to Rs. Five Lakhs on 19.06.1998 and the other facilities remained the same. The defendant no.2 being the proprietor of defendant no.1 had executed and signed the following loan documents in respect of the aforesaid facilities on 19.06.1998:
(i). Form No.14, Demand Promissory Note.
(ii). Form No.412, Letter to use the loan for specific purpose.
(iii).Form No.291, Agreement to pay penal interest.
(iv).Form No.159, Letter of continuity.
(v).Form No.106, Letter of waiver.
(vi).Form No.216, Not entitled for agriculture benefit.
(vii).Form No.192, Agreement of hypothecation.
The defendant no.3 alongwith the alleged Mangal Das executed and signed the guarantee bond to secure the said facilities and the alleged Mangal Das had also revalidated the mortgage deed in favour of the plaintiff bank to secure the dues of defendant no.1 & 2 in respect of his property bearing no.IX/4132, Ajit Nagar, Gandhi Nagar, Delhi - 31. Since, there was no change in other facilities and as such the bank had not taken the fresh documents in respect of other facilities. Thereafter, on 16.04.1999 the CC (Hyp.) Limit was further enhanced from Rs. Five Lakhs to Rs. Six Lakhs and as such bank had taken the following loan documents on 16.04.1999 in respect of the enhanced CC Limit which were duly signed and executed by defendant no.2 being the Proprietor of defendant no.1:
(i).Form No.14, Demand Promissory Note.
Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 5 of pages 38
(ii).Form No.126, Letter of recall.
(iii).Form No.291, Agreement to pay penal interest.
(iv).Form No.159, Letter of continuity.
(v).Form No.106, Letter of waiver.
(vi).Form No.412, Letter to use the loan for specific purpose.
(vii).Form No.192, Agreement of hypothecation.
Thereafter, on 07.10.1999, on the representation of defendant no.1 to 3 and on their request, another adhoc limit of Rs. One Lakh in the shape of term loan was also sanctioned to the defendant no.1 & 2 against the guarantee of defendant no.3 alongwith the alleged Mangal Das, who had executed the guarantee bond in respect of the said enhanced facility and Sh. Mangal Das, the alleged guarantor, had also revalidated the mortgage deed in respect of his property to secure the said facilities sanctioned to the defendant no.1 & 2. The defendant no.2 being the Proprietor of defendant no.1 further executed and delivered the following loan documents in respect of another term loan of Rs. One Lakh:
(i).Form No.14, Demand Promissory Note.
(ii).Form No.126, Letter of recall.
(iii).Form No.291, Agreement to pay penal interest.
(iv).Form No.103, Letter to pay installments.
(v).Form No.106, Letter of waiver.
(vi).Form No.216, Not entitled for agriculture benefit.
(vii).Form No.192, Agreement of hypothecation.
(viii). Form No.412, Letter to use the loan for specific purpose. Thereafter, the defendant no.2 being the Proprietor of defendant no.1 had signed and executed the balance confirmation slip on 20.11.2001, thereby confirming the balance in her accounts. The said account became irregular and as such the bank sent a legal notice to the defendant no.1 to 3 Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 6 of pages 38 alongwith the said Mangal Das to regularize the said account but even after legal notice, the said account was not regularized by the defendant no.1 to 3 and as such the bank sent another legal notice under Securitisation Act on 08.01.2003. Despite of the service of the said legal notice, the defendant no.1 to 3 failed to regularize the said account and as such the bank had filed an application before the Court of CMM, Delhi for taking possession of the mortgaged property. For that purpose, the loan Manager visited the property to ascertain the location of the property so that affidavit could be filed in the court regarding the status of property. The said loan Manager filed the affidavit in the Court for the purpose of obtaining the orders for taking the possession of the immovable property bearing no.IX/4132, Ajit Nagar, Gandhi Nagar, Delhi. Thereafter, defendants no.4 & 5 filed a complaint case before the Court of C.M.M., Delhi against defendant no.1 to 3 alongwith the plaintiff herein on the allegation that the defendant no.2 & 3 alongwith the officials of the plaintiff bank and their valuer and legal advisor had played a fraud upon them as the alleged Mangal Das, who alleged to have executed the mortgage deed in favour of the plaintiff bank in June, 1996, in fact, he had already sold the said property on 27.08.1965 and had already been died much prior to the execution of the alleged guarantee bond and the mortgage deed in respect of the said property somewhere in January/ February, 1990. They further alleged that the defendant no.2 & 3 had impersonated some person as Mangal Das and thereby they had played the fraud in connivance with the officials, surveyor, valuer and advisers of the plaintiff bank. The defendant no.4 & 5 also alleged that their mother is in possession of the alleged mortgaged Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 7 of pages 38 property since 1983, when she had purchased the said property by virtue of sale documents from Smt. Shanti Devi, who purchased the said property from Sh. Mangal Das. It was also alleged that the defendant no.3 Sh. P. K. Tyagi is a Chartered Accountant, who promised to the defendant no.4 & 5 to get the guaranteed loan sanctioned from the Ministry of Industries, Kashmere Gate, Delhi upon their handing over the original documents in respect of the alleged mortgaged property and they had handed over the complete chain of the original documents to Sh. P.K. Tyagi. Since defendant no.3, Sh. P.K. Tyagi failed to get the loan sanctioned from the Ministry of Industries in favour of the defendant no.4 & 5, the defendant no.4 & 5 took back the original documents from the alleged Sh. P.K. Tyagi. The said defendant no.3 Sh. P.K. Tyagi while returning the said original documents to them had dishonestly, deliberately and illegally kept one original sale deed, which was executed in favour of Sh. Mangal Das on 08.03.1963. The said defendant no.3 alongwith his wife, defendant no.2 took the loan from the plaintiff bank by way of impersonation of the said Mangal Das, who had died somewhere in January/February, 1990 and have forged his signatures on the guarantee bond as well as on the mortgage deed for the purpose of cheating and thus gain wrongfully while succeeding in getting the loan of Rs. Seven Lakhs. The defendant no.4 & 5 also alleged that they came to know about all these facts on 12.01.2004, when the officials of the plaintiff bank visited the above said property, who disclosed that the said property is lying mortgaged with the plaintiff bank. The said complaint was sent for investigation to the Shahdara Police Station by the Court of C.M.M., Delhi and a FIR to this effect was also registered with the Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 8 of pages 38 P.S. Shahdara, Delhi. The plaintiff bank had also filed a complaint U/s 406/ 419/420/468/471 r/w Section 34 IPC against the defendant no.2 to 5 before the Court of C.M.M., Delhi and the court directed the SHO, PS Shahdara to investigate the matter. The defendant no.4 & 5 also alleged that somewhere in 1995 the defendant no.3 while returning the original title deeds to them had retained one of the original title deed with himself in respect of the mortgaged property. Despite of this fact, they have not taken any steps against the defendant no.3 for return of said documents till the plaintiff bank had taken the action under Securitisation Act for taking the physical possession of the property mortgaged with the bank. It was only on 16.01.2004, when the plaintiff bank was likely to take the possession of the property and the Ld. C.M.M., Delhi was likely to appoint the receiver for taking the possession of the property, the defendant no.4 & 5 filed the false and frivolous complaint before the Court of Ld. C.M.M., Delhi on the filmsy grounds as the defendant no.4 & 5 were aware about the fact that if they did not come in the picture at that time, the court would pass the orders and appoint the receiver for taking the possession of the mortgaged property. As per the showing of the defendant no.4 & 5, the defendant no.3 had retained the original title deed in respect of the said property in the name of Sh. Mangal Das in the year 1995 96 and the defendant no.4 & 5 never demanded the said sale deed from the defendant no.3 nor they took any action against the defendant no.3 till the bank had taken the action under Securitisation Act, which clearly shows that the defendant no.4 & 5, who have known to defendant no.2 & 3 were in collusion with each other and they have cheated the plaintiff bank to wrongful Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 9 of pages 38 gain to themselves and to cause wrongful loss to the plaintiff bank. The defendant no.4 & 5 did not take any action until the bank had taken the action under Securitisation Act for taking the possession of the property and at that final stage, when the defendant came to know that now the Court at any time could appoint the receiver for taking the possession of the mortgaged property had filed the said complaint case with malafide intention, so that the Court could not pass such orders.
23 times the notices or the bank letters were posted at the address of the mortgage property in the name of Sh. Mangal Das and the notice sent through UPC were served upon the defendtn no.4 & 5, who never gave any reply to the said notices nor disclosed at any point of time that the said Mangal Das was no longer owner of the property nor he is alive, which clearly established the active connivance of the defendant no.2 to 5 to defraud with the plaintiff bank. The defendant no.2 to 5 have played a calculative fraud upon the plaintiff bank with active connivance of each other to gain wrongfully to themselves and to cause wrongful loss to the plaintiff bank while impersonating a person namely Mangal Das and created a forged and fabricated equitable mortgage in respect of property bearing no.IX/4132, Ajit Nagar, Gandhi Nagar, Delhi on the basis of registered sale deed dated 27.02.1963 in favour of Sh. Mangal Das and now in the complaint filed by the defendant no.4 & 5, it was disclosed that Sh. Mangal Das in whose favour that Sale Deed was, had already died in January/ February, 1990, whereas the person, who was impersonated by the defendant no.2 to 5 as Mangal Das, had created equitable mortgage in respect of the said property in the year Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 10 of pages 38 1996, he also stood guarantor alongwith defendant no.2 against the loan facilities availed by defendant no.1 in the name of her firm M/s Neha Enterprises and when the physical verification/valuation of the property was carried out, the defendant no.4 & 5 have not uttered even a single word that the properly belongs to them or to their mother rather they in collusion with defendant no.1 to 3 played a calculated fraud upon the plaintiff bank and thus deceived the bank to gain wrongfully to themselves and to cause wrongful loss to the plaintiff bank. Now the defendant no.4 & 5 to escape from their criminal as well as civil liability have cleverly got filed a criminal complaint before the Ld. C.M.M., Delhi on the false and frivolous grounds U/s 406/419/ 420/468/471 r/w Section 34 IPC and after the directions of the C.M.M., a FIR No.84/2004 has been registered with PS Shahdara, Delhi against defendant no.2 & 3 and the bank although the name of the employee of the bank has not been mentioned in the entire complaint. The aforesaid facts clearly shows that a calculated fraud was committed by the defendant no.2 to 5 and they have duped the public money from the plaintiff bank and as such this matter is of utmost important since public funds have been duped by the defendant no.2 to 5 in connivance with each other. The plaintiff bank maintains regular books of accounts in the ordinary and usual course of its business and as per the said books of accounts of the plaintiff bank, a sum of Rs.3,24,069.95ps. in the CC (Hyp.) account and Rs.3,88,258.05ps. in the memoranda interest account, which comes to Rs.7,12,328/ in the CC (Hyp.) account, in the term loan of Rs.1.50 Lakhs the principle sum of Rs.34,424/ and memoranda interest of Rs.15,596/, which comes to Rs.50,020/ and in another term loan of Rs. One Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 11 of pages 38 Lakh an amount of Rs.1,08,240/ in the principle account and Rs.92,490/ in the memoranda interest account was due against the defendants and the total amount comes to Rs.9,63,078/ alongwith interest charges upto 30.09.2004 and thereafter is due from the defendant to the plaintiff bank. The plaintiff bank is also entitled for pendentelite and future interest @ 13 % p.a. with monthly rest from the defendant w.e.f. 01.10.2004. The defendants have failed to adjust the said loan facilities availed by the defendants despite of various requests and reminders of the bank and even service of legal notice upon them. The cause of action arose in favour of plaintiff and against the defendant when the defendant no.1 approached the plaintiff bank for financial facilities. It further arose on 01.06.1996 when the loan was sanctioned to the defendant and further when the defendant had executed the loan documents in favour of the plaintiff bank. It again arose on 17.06.1996, 26.06.1996 and 07.08.1996 when the defendants have executed and signed the loan documents in favour of plaintiff bank against the loan facilities availed by them. Thereafter it further arose on various dates i.e. 19.06.1998, 16.04.1999 and 07.10.1999. It again arose on 20.11.2001, when the defendants have executed and signed the balance confirmation slip in respect of the said loan facilities the thereby confirming the balance in the said loan account. It further arose on various dates/ months when the installments fell due and not paid/deposited by the defendant. It again arose on various dates when the defendants made deposits in the said loan account as shown in the statement of accounts. It further arose on various dates when the plaintiff bank had requested the defendants to regularize the said loan account. It again arose Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 12 of pages 38 when the legal notice dated 10.05.2002 and 08.01.2003 were issued to the defendant by the plaintiff bank and despite of service of notice, the defendant failed to pay the loan amount and thereafter on 19.09.2003 when the plaintiff bank filed an application U/s 14 of Securitisation Act for taking the possession of the mortgaged property. It also arose on 16.01.2004, when the defendant no.4 & 5 filed the complaint before the court of CMM, Delhi from where the plaintiff bank came to know about the fraud committed by defendant no.2 to 5 for wrongful gain to themselves and wrongful loss to the plaintiff bank. The cause of action against the defendants is continuous and subsisting one since the payment of the due amount has not been made till today. This court has pecuniary as well as territorial jurisdiction to try and entertain the present suit. The suit has been properly valued for the purpose of court fee and jurisdiction.
3. The summons of the suit were issued to the defendants and accordingly defendants no.4 & 5 appeared and filed there Written Statement. Whereas on the other hand defendant no.1 did not appear before the court despite of service and as such it was proceeded against exparte vide order dated 21.02.2005. The defendant no.2 & 3 could not be served by way of ordinary mode of service and as such vide order dated 06.07.2005 they were directed to be served by substituted mode i.e. by way of publication upon moving of an application U/o 5 R 20 CPC by plaintiff and accordingly they were got served by way of publication appeared in the newspaper "The National Herald" dated 24.08.2005 but despite service nobody appeared on behalf of defendants and as such the defendants were proceeded exparte vide order dated 19.09.05.
4. In their Written Statement, defendant no.4 & 5 took certain preliminary Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 13 of pages 38 objections like that the suit is not maintainable against the defendant no.4 & 5 as no loan was ever borrowed and they never mortgaged their property. No other person has any right to mortgage or create any charge over their property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi. A high level cheating and fraud has been played upon them by the defendant no.1 to 3 in collusion with the officials of the bank. A complaint about the same was made by the defendant no.4 for self and on behalf of defendant no.5 and the case FIR No.84/2003 under Section 406, 419, 420, 468, 471, 34 IPC was registered with PS Shahdara, Delhi against the defendant no.3 Sh. P.K. Tyagi, defendant no.2, Smt. Manorma Tyagi, Prop. of M/s Neha Enterprises and officials of Punjab & Sind Bank i.e. the plaintiff, through its Branch Manager (plaintiff/bank). The answering defendants are not liable to pay any amount much less the amount as claimed in the suit. The plaintiff has not approached the court with clean hands and has suppressed the material facts from the court. There is no cause of action in favour of the plaintiff and against them and the suit is liable to be dismissed U/o 7 R 11 CPC. Further there is no privity of contract between the plaintiff/bank and the answering defendants. The suit has not been properly valued for the purpose of court fee and jurisdiction. The suit is also not properly verified and signed by the competent/authorized person. The suit is also bad for misjoinder and non joinder of parties.
On merits side, it is denied that Sh. H.S. Bhui is the Manager and Sh. S.S. Bhatia is the Sr. Manager of the plaintiff/bank or that they are competent to sign and verify the plaint, institute the suit and to proceed with the same. It Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 14 of pages 38 is also contended that the answering defendants never consented to any loan in any manner and they have no concern or connection with the activities of the defendants no.1 to 3 or the plaintiff. It is specifically denied that the defendant no.2 had also offered to secure that loan by equitable mortgage of immovable property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi 31. It is also denied that it was owned by one Sh. Mangal Das or that the defendant assured the bank that he will stood as guarantor alongwith defendant no.3 against the said facilities or that Sh. Mangal Das also mortgaged his aforesaid property to secure the loan facilities. It is categorically submitted that the defendants no.4 & 5 are the owners of the property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi as Smt. Rukmani Devi (the mother of the answering defendants) sold the said property to them vide Sale Deed dated 02.02.1998. In fact, the defendant no.3 Sh. P.K. Tyagi and defendant no.2 Manorma Tyagi, his wife, the alleged proprietor of M/s Neha Enterprises, had committed various offences of cheating and forgery etc. in collusion with the officials of the plaintiff/bank i.e. Bank Managers, Bank Officers, employees, bank surveyors, advisers and valuers etc. against the answering defendants and their properties. The defendant no.3 Sh. P.K. Tyagi, is a Chartered Accountant and he promised them to get the guaranteed loan sanctioned in their favour from the Ministry of Industries, Kashmere Gate, Delhi upon their handing over the originals of their aforesaid property no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi-31 to him (defendant no.3.) and he took the original documents of the said property having the chain of documents from Mangal Dass till the last purchasers i.e. the answering defendants, from them and Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 15 of pages 38 assured for sanction of the loan at the earliest. But for a long time he was failed to do so and ultimately they requested the defendant no.3 for the return of their original documents of the said property but he went on avoiding the same on one pretext or the other. Ultimately while returning the original documents in January, 1996, the defendant no.3 had dishonestly retained one sale deed document relating to Mangal Dass dated 08.03.1963 whereas the remaining documents in the chain were returned by him to the answering defendants and the said documents were the bunch of documents and they did not check that the said first document/sale deed pertaining to Mangal Dass had not been returned, and they kept the said bunch of documents with them in good faith and also hoping that there was no chance of any cheating or fraud at the hands of the C.A. i.e. defendant no.3. The above said factum of crime at the hands of the defendant nos.1 to 3 and the plaintiff, came to the knowledge of answering defendants only on 12.01.2004 when some officials of the plaintiff/bank visited and told about the fact that the property was mortgaged by Sh. Mangal Dass for the loan of defendants no.1 to 3. They are in possession of the said property since 1983 when their mother namely Smt. Rukmani Devi purchased the said property from its earlier owner Sh. Prabhu Dayal vide documents dated 25.08.1983. Thereafter, the said Smt. Rukmani Devi sold the said property to the answering defendants vide Sale Deed dated 02.02.1998. The electricity bills, election Identity Card, Ration Card etc. from the said property are in the names of the answering defendants and the house tax of the said property in the name of Smt. Shanti Devi, one of the owners in chain of owners, who had purchased the said property in 1965 from the said Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 16 of pages 38 Sh. Mangal Dass. The said Sh. Mangal Dass had died on 22.03.1990 and apparently there was no question of the said Mangal Dass mortgaging the said property in favour of the bank, as alleged by the plaintiff. The answering defendants never obtained any loan from the plaintiff bank nor they had ever signed any documents against any loan or stood as guarantor for anybody in any manner. They have no knowledge about the granting of loan by the plaintiff to defendants no.1 & 2 nor they know that against the said facility, the defendant no.3 stood as guarantor alongwith one Sh. Mangal Dass or that the said Mangal Dass was introduced by the defendant no.2 & 3. It is denied that the said Sh. Mangal Dass mortgaged his property no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi while depositing the original title deeds with the plaintiff/ bank i.e. the original sale deed dated 27.02.1963. It is claimed that on the date of alleged grant of loan i.e. on 01.06.1996, the said Sh. Mangal Dass was not the owner, rather, the said Mangal Dass had already expired way back on 22.03.1990, so there was no question of the said Sh. Mangal Dass offering to mortgage the said property in favour of the plaintiff/bank. It is categorically stated that the answering defendants have no concern or connection with the alleged facility to the defendant no.1 to 2 or the enhancement thereof nor the same is binding upon them. No notice of any kind was received at the said property no.IX/4132, Ajit Nagar, Gandhi Nagar, Delhi. There was no question of effecting any service upon Sh. Mangal Dass on the said property as the said Sh. Mangal Dass was neither the owner, nor in possession of the same. The said property is not the mortgaged property and the answering defendants are the lawful and exclusive owners of the said Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 17 of pages 38 property. No charge of any kind can be made against the said property no.IX/4132, Ajit Nagar, Gandhi Nagar, Delhi in view of aforesaid submissions. It is denied that the answering defendants never demanded the said sale deed from the defendant no.3 or that they did not take any action against the defendant no.3 till the bank had taken the action under Securitisation Act. It is also denied that the answering defendants are in collusion with the defendant no.2 & 3 and each other or have cheated the plaintiff bank to wrongful gain to themselves and to cause wrongful loss to the plaintiff/bank. Further, immediately coming to know about the cheating and fraud, the answering defendants filed the complaints. The suit is false and without any substance or cause of action.
5. The plaintiff filed replication to the Written Statement of defendant no.4 & 5 in which while reiterating the contents of plaint, it denied the claim and allegations made in the Written Statement. It is stated that the defendant no.4 & 5 are in active connivance and collusion with defendant no.1 to 3 and a calculated fraud has been played upon the bank. It is denied that there is no cause of action in favour of the plaintiff and against the answering defendants or that there is no privity of contract between the plaintiff/bank and the answering defendants. It is also denied that the suit is bad for misjoinder and nonjoinder of parties. It is categorically stated that it is hard to believe that a person, who had given the original title deeds to C.A. for taking a loan would not take care to get his documents checked when the same were returned to him to find out as to whether all the documents are received or not and when the loan was not cleared. This fact, clearly proves the collusion of the Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 18 of pages 38 defendant no.2 to 5 for taking the loan in the name of defendant no.1. The complaint to this effect has also been filed with the Court of Ld. CMM, Delhi in which the IO had already submitted the report and a FIR is to be registered against the defendants. It is also submitted that the defendant no.2 to 5 in active connivance of each other had introduced an old person as Mangal Dass and got the property registered through him which can be proved from the fact that when the bank official and the valuer visited the property, the answering defendants had not made any objection despite of the fact that they had disclosed that this property is/was going to mortgaged with the plaintiff bank in the account of defendant no.1. It is submitted that the notice were sent at the address of the mortgaged property in the name of the Mangal Dass and the same were duly served as the bank had sent the copies of the notice through registered AD as well as UPC.
6. From the pleadings on record, following issues were framed vide order dated 12.04.2006:
(i).Whether the suit is not maintainable against defendant no.4 & 5 and whether there is no cause of action in favour of plaintiff and against the defendant no.4 & 5? OPD.
(ii).Whether the suit is liable to be dismissed for misjoinder of the parties? OPD.
(iii).Whether the suit has not been instituted, verified and signed by the authorized person? OPD.
(iv).Whether the plaintiff bank is entitled to recover principle amount as claimed in para 41 (a) of plaint from all the Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 19 of pages 38 defendants? OPP.
(v).Whether the plaintiff bank is entitled for attachment of hypothecated machinery and stock owned by defendants and consequent relief? OPP.
(vi).Whether the plaintiff bank is entitled to interest, if yes, at what rate and from when? OPP.
(vii).Relief.
7. In support of its case, plaintiff examined Sh. H.S. Bhui (Manager of plaintiff bank) as PW1 and then the plaintiff's evidence was closed. On the other hand defendant no.4 & 5 in their defence have examined Sh. Bhawani Singh as DW1, SI Om Prakash as DW2, Sh. Gurcharan Singh as DW3, Sh. Vijay Kumar Rawat (Record Clerk from the office of Sub RegistrarIV, Nand Nagri, Delhi) as DW4 and Sh. Hari Om Sharma as D5W1 and then DE was closed on behalf of contested defendants i.e. defendants no.4 & 5.
8. PW1 Sh. H.S. Bhui (Manager of plaintiff bank), in his examination in chief tendered by way of affidavit has reiterated the contents of the plaint and has proved on record the following documents relied upon by the plaintiff bank:
(i) Copy of Power of attorneys issued in favour of the deponent and Sh. S. S. Bhatia : ExPW1/1 & 1/2.
(ii) Authorization letter bearing no.18/200405 dated 13.05.2004. : ExPW1/3.
(iii) Copy of sanctioned letter dtd. 01.06.1996, whereby plaintiff bank acceded the request of the defendant nos.1 & 2 and granted the loan facilities to them. : ExPW1/4.
(iv) Copy of Sale Deed, which is duly registered under Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 20 of pages 38 document no.2521 AB I vol no.904 on pages 2425 entered on 08.03.1963. : ExPW1/5.
(v) Demand Promissory Note dated 17.06.1996. : ExPW1/6.
(vi) Form No.126. : ExPW1/7.
(vii) Form No.291. : ExPW1/8.
(viii)Form No.103. : ExPW1/9.
(ix) Form No.106. : ExPW1/10.
(x) Form No.216. : ExPW1/11.
(xi) Form No.192. : Ex.PW1/12.
(xii) Letter of guarantee. : Ex.PW1/13.
(xiii)Demand Promissory Note dated 26.06.1996. : Ex.PW1/14.
(xiv)Form No.126. : Ex.PW1/15.
(xv) Form No.291. : Ex.PW1/16.
(xvi)Form No.103. : Ex.PW1/17.
(xvii)Form No.106. : Ex.PW1/18.
(xviii)Form No.216. : Ex.PW1/19.
(xix)Form No.192. : Ex.PW1/20.
(xx) Form No.159. : Ex.PW1/21.
(xxi)Deed of continuing guarantee. : Ex.PW1/22.
(xxii)Demand Promissory Note dated 07.08.1996. : Ex.PW1/23. (xxiii)Form No.291. : Ex.PW1/24.
(xxiv)Form No.106. : Ex.PW1/25.
(xxv) Form No.216. : Ex.PW1/26.
(xxvi)Form No.192. : Ex.PW1/27.
(xxvii)Sanction letter dated 19.06.1998. : Ex.PW1/28. (xxviii)Demand Promissory Note dated 19.06.1998. : Ex.PW1/29. (xxix) Form No.412. : Ex.PW1/30.
(xxx) Form No.291. : Ex.PW1/31.
(xxxi) Form No.159. : Ex.PW1/32.
(xxxii)Form No.106. : Ex.PW1/33.
(xxxiii)Form No.216. : Ex.PW1/34.
(xxxiv)Form No.192. : Ex.PW1/35.
(xxxv) Form No.126. : Ex.PW1/36.
(xxxvi)The guarantee bond. : Ex.PW1/37.
(xxxvii)Demand Promissory Note dated 16.04.1999. : Ex.PW1/38. Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 21 of pages 38 (xxxviii)Form No.126. : Ex.PW1/39.
(xxxix) Form No.291. : Ex.PW1/41.
(xl) Form No.159. : Ex.PW1/42.
(xli) Form No.106. : Ex.PW1/43.
(xlii) Form No.412. : Ex.PW1/44.
(xliii)Form No.192. : Ex.PW1/45.
(xliv)The Guarantee Bond. : Ex.PW1/46.
(xlv) Form No.84AA. : Ex.PW1/47.
(xlvi)Demand Promissory Note. : Ex.PW1/48.
(xlvii)Form No.126. : Ex.PW1/49.
(xlviii)Form No.291. : Ex.PW1/50.
(xlix) Form No.103. : Ex.PW1/51.
(l) Form No.106. : Ex.PW1/52.
(li)Form No.216. : Ex.PW1/53.
(lii)Form No.192. : Ex.PW1/54.
(liii)Form No.412. : Ex.PW1/55.
(liv)Balance Confirmation Slip. : Ex.PW1/56.
(lv) Balance confirmation slip. : Ex.PW1/57.
(lvi)Copy of Legal Notice dated 19.10.2002. : Ex.PW1/58.
(lvii)Postal Receipts. : Ex.PW1/59 to 61.
(lviii)UPC slip. : Ex.PW1/62.
(lix) Certified copy of the statement of account. : Ex.PW1/63 to 68.
During cross examination by Ld. counsel for defendant no.4 & 5, he stated that the bank had been governed by its own policy for the purposes of granting different kinds of loan and their bank follows the guidelines provided by RBI to their head office. He submitted that he had been working in loan department and he knows the particulars regulations for granting the loan. For granting such loans, which were availed by defendants no.1, 2 & 3, they used to ask for loan application, financial papers, projected financial papers and credit reports and other documents required for the identification. He testified that for the purpose of identification, bank accepts copy of ration card or Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 22 of pages 38 election I Card and copy of passport etc. and the said documents are to be taken from the loanee and guarantor as well. Earlier they did not take the photos of the loanee and guarantor, as this practice has been started recently. He also testified that for the purpose of verification and worth of the mortgaged properties, they rely on their panel advocates and valuers and they also use to take the personal visits to the mortgaged properties if it is so suggested by their panel advocate/s in their report to them. He denied the suggestion that neither the valuer nor the manager of the bank personally visited the mortgaged property for the purpose of verification and possession. The bank had taken the legal opinion before creation of equitable mortgaged of the property. He also denied the suggestion that no legal opinion was sought from their panel lawyers before granting of the loan. He conceded that the legal opinion of their panel advocates has not been filed with the present suit, although the same is available in their record. He confirmed that while granting the term loan of Rs.1.50 lakhs on 17.06.1996, the bank had satisfied all the bank's requirement. The signatures of the guarantor were also procured by the bank. He denied the claim of defendants that no signatures of Sh. Mangal Dass was taken at that time or that no such signature or the written consent of Sh. Mangal Dass as a guarantor was taken for granting CC hypothication limit of Rs.3 Lakhs on 26.06.1996 or for granting term loan of Rs.1 Lakh on 07.08.1996 or for enhancing the CC limit from Rs. 5 Lakh to Rs.6 Lakh on 16.04.1999. He further denied that the bank officials were acting in collusion with the defendant no.1, 2 & 3 for granting of the loan and credit facilities, and that is why the signatures of said Sh. Mangal Dass were not Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 23 of pages 38 taken. He could not confirm as to whether Sh. Mangal Dass was alive or not at the time when the guarantee bonds were executed. He further testified that when he personally visited the property for the purpose of submitting the status report before the Court of Ld. CMM, Delhi, the bank came to know that some malpractice had been played by the defendants with the bank. He also could not tell as to whether any inquiry was initiated against the then bank officials, who had sanctioned and disbursed the loan to the defendants no.1 &
2. He conceded that no loan documents were ever signed by defendant no.4 & 5 and the plaintiff bank has not filed any documents alongwith the present suit proving that the defendant no.4 & 5 are the beneficiary of the loans sanctioned to the defendant no.1, 2 & 3 or they have been recipient of any kind of material benefits from the defendants no.1, 2 & 3. He denied the suggestion that the defendants no.4 & 5 had never acted in collusion with the defendants no.1, 2 & 3. He also testified that the credit facilities granted by the bank to the defendants have been identified as non performing account since March, 2000 and from that date onwards, the interest was not booked in the ledger account, however, the same was calculated separately and claimed in the suit. He denied the suggestion that no legal notice was ever sent at the address of defendant on.4 & 5 or that the complaint filed by defendant no.4 & 5 before the Ld. CMM, Delhi is true and correct. He could not tell whether the mortgaged property now stands in the name of defendant no.4 & 5 and earlier in the name of their mother. He also denied the suggestion that the defendants no.4 & 5 are not liable to pay any amount to the plaintiff bank.
9. DW1 Sh. Bhawani Singh, in his examinationinchief has claimed that he Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 24 of pages 38 and his brother Jagdev, the defendant no.5, are the joint owners of the property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi 31 vide Sale Deed dated 02.02.1998 Ex.DW1/A. He also claimed that he has no knowledge as to whether defendant no.1, 2 & 3 had obtained the financial assistance from the plaintiff bank in the shape of CC Limit (Hyp.) or a Term Loan or a Bill Discount Limit. He further claimed that defendant no.3 while promising him to get the guaranteed loan sanctioned in his favour from the Ministry of Industries obtained the documents of said property from him. He proved the application form for Credit Facility in Small Scale Industries as Ex.DW1/B. He also confirmed that defendant no.3 took the original documents of property of deponent comprising of chain of documents i.e. documents/sale deed etc. starting from late Sh. Mangal Dass till the last purchaser i.e. deponent and his brother. He proved the same as Ex.DW1/C. He also confirmed that when the said documents were returned to him, he did not inadvertently see that the Sale Deed pertaining to late Mangal Dass had not been returned by defendant no.3. He came to know about the act of defendant no.1 to 3 acting in collusion with plaintiff only on 12.01.2004 when some officials of the plaintiff visited the aforesaid property and told about the factum of having mortgaged the same by late Sh. Mangal Dass for the loan of defendant no.1 to 3. He also confirmed that since late Sh, Mangal Dass had died on 22.03.1990, hence there was no question of late Sh. Mangal Dass becoming a guarantor and mortgaging the said property in the year 1996. He confirmed that neither he nor his brother signed any documents against any loan nor stood as guarantor for anybody in the matter. He also confirmed that Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 25 of pages 38 neither he nor defendant no.5 ever impersonated any person of the name of Mangal Dass or that they created any equitable mortgage in respect of their property on the basis of Sale Deed dated 27.02.1963, which was in favour of Mangal Dass. He denied the service of any notice upon him or his brother from the plaintiff bank. He claimed that his property is not a mortgaged property. He alleged that defendant no.1 to 3 are acting in collusion with the plaintiff bank.
During cross examination he claimed that in the year 1995, defendant no.3 told him that he could get the loan sanctioned in his name under Small Scale Industries Unit as he was running a small scale industry at that time, so he became eager. Defendant no.3 took the original title deed in respect of the property in question from him. The defendant no.3 retained the said documents for about 1012 days and thereafter he returned the documents while telling that the loan could not be sanctioned on those documents. At the time of returning the documents he did not check that defendant no.3 had retained some title documents of his property and he came to know about the said fact only at the time when the officials of plaintiff bank came to him.
DW2 SI Om Prakash in his testimony proved the copy of FIR no.84/08 Ex.DW2/A and deposed that the charge sheet on the basis of FIR No.84/08 PS Shahdara has already been filed on record and the charge sheet is against two persons i.e. defendant no.2 & 3 and defendant no.4 & 5 are not accused in that charge sheet.
During cross examination he conceded that no bank official is accused in the aforesaid criminal case.
Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 26 of pages 38 DW3 Sh. Gurcharan Lal confirmed that his father Sh. Mangal Dass died in the year 1990 and he brought the original death certificate of Mangal Dass and copy of the same is Ex.DW3/A. DW4 Sh. Vijay Kumar Rawat brought the summoned records i.e. Sale Deed dated 10.11.1970 and Sale Deed dated 02.02.1998 and exhibited the certified copies of which are Ex.DW4/1 & Ex.DW4/2 respectively.
D5W1 Sh. Hari Om Sharma in his examinationinchief tendered by way of affidavit Ex.D5W/A confirmed that he has been residing at the address 9/4158, Street No.12 A, Dharma Pura, Ajit Nagar, Gandhi Nagar, Delhi - 31, since 1984 and he knows defendant no.4 & 5 residing at property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi before 1984 for the last 30 years.
During cross examination, he admitted that he had stated in the affidavit at the instance of Bhawani Singh, defendant no.4, however he has come to depose on his own.
10. I have carefully heard the rival submissions of Ld. counsels for the parties. I have also perused the entire material placed before me.
11. My issue wise findings are as under:
12. For convenience sake, before taking issue no.1, I will decide issue no.2 & 3 first.
13. ISSUE No.2: Whether the suit is liable to be dismissed for misjoinder of the parties?
OPD.
The onus to prove this issue has been placed upon the defendants i.e. defendant no.4 & 5, who are the contesting defendants but they have led no Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 27 of pages 38 arguments in this regard.
On the other hand according to Ld. counsel for plaintiff as per the showing of the defendant no.4 & 5, the defendant no.3 had retained the original title deed in respect of the said property in the name of Sh. Mangal Das in the year 199596 and the defendant no.4 & 5 never demanded the said sale deed from the defendant no.3 nor they took any action against the defendant no.3 till the bank had taken the action under Securitization Act, which clearly shows that the defendant no.4 & 5, who have known to defendant no.2 & 3 were in collusion with each other and they have cheated the plaintiff bank to wrongful gain to themselves and to cause wrongful loss to the plaintiff bank. The defendant no.4 & 5 did not take any action until the bank had taken the action under Securitisation Act for taking the possession of the property.
Since the plaintiff has raised specific allegations against the defendant no.4 & 5 in the suit, so it can not be said that the suit is bad for misjoinder of parties. Issue stands decided accordingly.
14. ISSUE No.3: Whether the suit has not been instituted, verified and signed by the authorized person? OPD.
The onus to prove this issue has been placed upon the defendants. In para 5 of the preliminary objections of their Written Statement, the contesting defendants i.e. defendants no.4 & 5 have raised the objections that the suit has not been properly verified and signed by the competent/ authorized person and as such the same is liable to be dismissed. Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 28 of pages 38 In its replication, the plaintiff has vehemently denied the said objection by claiming that merely a bald plea of improper verification and signing of the plaint of suit has been taken by the defendant without explaining how and in what manner the verification is defective.
Rule 15 of Order VI of the Code of Civil Procedure incorporates the provisions regarding verification of pleadings, which reads as under: 15 (1) save as otherwise provided by any law for the time being in force every pleading shall be verified at the foot by the party or by one of the parties pleading or by some other person proved to the satisfaction of the court to be acquainted with the facts of the case.
(2) The person verifying shall specify by reference to the numbered paragraphs of the pleading, what he verifies of his own knowledge and what he verifies upon information received and believed to be true.
(3). The verification shall be signed by the person making if and shall state the date on which and the place at which it was signed.
In the present suit, the plaint has been duly signed and verified by Sh. H. S. Bhui (the then Manager) and Sh. S.S. Bhatia (the then Sr. Manager). They have duly verified the facts stated in the plaint in para 1 to 38 while Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 29 of pages 38 stating that the same are true to their knowledge as derived from their official record and thus the plaint has been satisfactorily verified as per requirements of the provisions of Order VI R 15 of Code of Civil Procedure. Further the same has been signed by the aforesaid officials of plaintiff bank. The Power of attorneys issued in favour of the aforesaid officials Ex.PW1/1 & Ex.PW1/2 and authorization letter bearing no.18/200405 dated 13.05.2004 issued in favour of PW1 Sh. H.S. Bhui is also proved on record as ExPW1/3. Hence issue is liable to be decided in favour of plaintiff and against the defendants and same stands decided accordingly.
15. Now now will proceed to decide issue no.1.
16. ISSUE No.1: Whether the suit is not maintainable against defendant no.4 & 5 and whether there is no cause of action in favour of plaintiff and against the defendant no.4 & 5? OPD.
The onus to prove this issue has been placed upon the defendants i.e. defendant no.4 & 5, who are the contesting defendants.
It is the case of the plaintiff that the defendant no.1 & 2 were granted the loan facilities by the plaintiff bank and defendant no.3 alongwith one Mangal Dass stood as guarantors for the said loan transaction and the said Mangal Dass had mortgaged his property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi31.
On the other hand, according to the contesting defendants i.e. defendants no.4 & 5, they have been impleaded unnecessarily as they have no connection with the alleged taking of loan/ financial assistance from the Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 30 of pages 38 plaintiff bank by the defendants no.1 & 2, for which the defendant no.3 stood as guarantor. They are not even having knowledge about the said taking of loan nor they ever stood guarantor for the defendants no.1 & 2.
DW1 Bhawani Singh (defendant no.4) while reiterating the contents of their Written Statement has confirmed that he and his brother Jagdev, the defendant no.5, are the joint owners of the property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi31 vide Sale Deed dated 02.02.1998 Ex.DW1/A. He also confirmed that he has no knowledge as to whether defendant no.1, 2 & 3 had obtained the financial assistance from the plaintiff bank in the shape of CC Limit (Hyp.) or a Term Loan or a Bill Discount Limit. He testified that defendant no.3 while promising him to get the guaranteed loan sanctioned in his favour from the Ministry of Industries obtained the documents of said property from him and he proved the application form for Credit Facility in Small Scale Industries as Ex.DW1/B. He also confirmed that defendant no.3 took the original documents of property of deponent comprising of chain of documents i.e. documents/sale deed etc. starting from late Sh. Mangal Dass till the last purchaser i.e. deponent and his brother and when the said documents were returned to him, he inadvertently did not check that the Sale Deed pertaining to late Mangal Dass was not returned by defendant no.3. He confirmed that neither he nor his brother signed any documents against any loan nor stood as guarantor for anybody in the matter.
Even the sole witness appeared on behalf of plaintiff bank i.e. PW1 has also conceded in his cross examination that no loan documents were ever signed by defendant no.4 & 5 and the plaintiff bank has not filed any Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 31 of pages 38 documents alongwith the suit proving that the defendant no.4 & 5 are the beneficiary and the loan sanctioned to defendant no.1,2 & 3 or they are recipients of any kind of material benefits from the said loan granted to defendants no.1, 2 & 3.
DW2 while proving the FIR bearing no.84/08 PS Shahdara has also confirmed that in the charge sheet of the said FIR, the defendants no.4 & 5 are not impleaded as the accused persons. DW3 Gurcharan Singh has also confirmed that his father namely Mangal Dass, the alleged guarantor, had already expired in the year 1990 and he also proved the Death Certificate of his father and as such, he could not stood as guarantor for the loan in question which was taken in the year 1996.
Having heard the respective rival submissions of Ld. counsel for defendant no.4 & 5 as well as of the plaintiff, I find myself in agreement with the contentions of Ld. counsel for defendants no.4 & 5 that the instant suit as filed is liable to fail qua the defendants no.4 & 5 as the plaintiff has been failed to show any material that the defendants no.4 & 5 were having connection with the loan transactions executed between the plaintiff bank and defendants no.1, 2 & 3. Admittedly, non of the loan documents was ever signed by defendants no.4 & 5 nor the plaintiff bank has brought any material to show that the defendants no.4 & 5 are the beneficiary or they have derived/ received any kind of material benefits from the loan granted to defendants no.1 & 2 for which the defendant no.3 stood as guarantor. The only allegations made against defendants no.4 & 5 were that they did not take any action against the defendant no.3 nor demanded the original title deed from Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 32 of pages 38 him in respect of the said property in the name of Sh. Mangal Das despite of the fact that they were having knowledge that the same was illegally retained by defendant no.3, thus they were in connivance with defendants no.1, 2 & 3 and obtained wrongful gain but the plaintiff has failed to bring any material in substance of this claim, rather, the sole witness appeared on behalf of plaintiff has categorically deposed in his testimony that "no loan documents were ever signed by defendant no.4 & 5 and the plaintiff bank has not filed any documents alongwith the suit proving that the defendant no.4 & 5 are the beneficiary and the loan sanctioned to defendant no.1,2 & 3 or they are recipients of any kind of material benefits from the said loan granted to defendants no.1, 2 & 3."
Thus, suit of the plaintiff is liable to fail qua defendants no. 4 & 5 and issue stands decided accordingly.
17. For convenience sake, I will take issues no.4 & 5 together.
ISSUE No.4: Whether the plaintiff bank is entitled to recover principle amount as claimed in para 41 (a) of plaint from all the defendants? OPP. ISSUE No.5: Whether the plaintiff bank is entitled for attachment of hypothecated machinery and stock owned by defendants and consequent relief? OPP.
The onus to prove these issues have been placed upon the plaintiff. While deciding the issue no.1, I have already come to the conclusion that the suit of the plaintiff is liable to fail qua defendants no.4 & 5 and as such, the plaintiff is not entitled for the recovery of any amount from the defendants no.4 Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 33 of pages 38 & 5.
However, now it is to be seen that whether the plaintiff is entitled to recover any amount from defendants no.1, 2 & 3, incidentally, who have remained absent throughout the proceedings and were accordingly proceeded against ex parte and further whether the plaintiff bank is entitled for attachment of hypothecated machinery and stock owned by defendants and consequent relief?
In the instant suit, the plaintiff has claimed the recovery of sum of Rs.9,63,078/ alongwith pendentelite and future interest @ 13% per annum and also for attachment of hypothecated machinery and stock owned by defendants and consequent relief.
In his testimony PW1 has confirmed that the defendant no.2 being the Proprietor of defendant no.1 approached the plaintiff bank for financial assistance in the shape of C.C. (Hyp.) Limit to the tune of Rs. Three Lakhs, a term loan to the tune of Rs.1.50 Lakhs and Bill Discount Limit to the tune of Rs. One Lakhs against the hypothecation of stock of PCC wire, rawmaterial semifinished, finished goods, machinery etc. The plaintiff bank while acceding the request of the defendant no.1 & 2 granted the aforesaid loan facilities to the defendant no.1 & 2 and against the said facility, the defendant no.3 stood as guarantor alongwith one Sh. Mangal Das, who also mortgaged his property bearing no.9/4132, Ajit Nagar, Gandhi Nagar, Delhi while depositing the original title deeds with the plaintiff bank i.e. original sale deed dated 27.02.1963, which is duly registered under documents no. 2521 AB No.I, Vol. No.904 on pages 2425 entered on 08.03.1963. He also confirmed that the Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 34 of pages 38 the defendant no.2 being the proprietor of defendant no.1 had executed various loan documents in respect of grant of aforesaid loan facilities and the documents were got revalidated from time to time. Thereafter, the defendant no.2 being the Proprietor of defendant no.1 had signed and executed the balance confirmation slip on 20.11.2001, thereby confirming the balance in her accounts. The said account became irregular and as such the bank sent a legal notice to the defendant no.1 to 3 alongwith the said Mangal Das to regularize the said account but even after legal notice, the said account was not regularized by the defendant no.1 to 3 and as such the bank sent another legal notice under Securitisation Act on 08.01.2003. Despite of the service of the said legal notice, the defendant no.1 to 3 failed to regularize the said account. Further PW1 has also proved the aforementioned documents Ex.PW1/1 to Ex.PW1/68 and they remained uncontroverted and unrebutted qua the defendants no.1 to 3 as they neither appeared to cross examine the PW1 nor led their own evidence in support of their defence. Thus the plaintiff is entitled to a decree for a sum of Rs.9,63,078/ (Rs. Nine Lakh Sixty Three Thousand Seventy Eight Only) in its favour and against the defendants no.1, 2 & 3. Further the plaintiff is also entitled for the attachment of the hypothecated machinery and stock owned by defendants no.1, 2 & 3 and their auction in the public and depositing the proceeds thereof in the loan account of the defendant. Issue stands decided accordingly.
18. ISSUE No.6: Whether the plaintiff bank is entitled to interest, if yes, at what rate and from when? OPP.
Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 35 of pages 38 The onus to prove this issue is also placed upon the plaintiff. While deciding the preceding issue, I have already come to the conclusion that the plaintiff is entitled for the recovery of suit amount i.e. Rs.9,63,078/ from the defendants no.1,2 & 3.
In the suit, the plaintiff has claimed the recovery of Rs.9,63,078/ alongwith the interest charged upto 30.09.2004 and it is also claiming the pendentelite and future interest @ 13% per annum with monthly rest from the defendants w.e.f. 01.10.2004. However, the plaintiff brought no material to show about their entitlement of interest for the subsequent period on the aforesaid rate. But since the defendants no.1, 2 & 3 have withheld the money of plaintiff without any rhyme and reason and the money involved in the suit is a public money, so the plaintiff is entitled for some interest. In my considered opinion, interest of justice shall be fully met if the plaintiff is awarded interest @ 8% per annum on the decreetal amount of Rs.9,63,078/ (Rs. Nine Lakh Sixty Three Thousand Seventy Eight Only) from the date of filing of suit till its realization from the defendants no.1, 2 & 3. Issue stands decided accordingly.
19. RELIEF: In view of my findings on the foregoing issues, suit of the plaintiff is dismissed qua defendants no.4 & 5. However, the suit succeeds against defendants no.1, 2 & 3 and accordingly, a decree for the sum of Rs.9,63,078/ (Rs. Nine Lakh Sixty Three Thousand Seventy Eight Only) alongwith interest @ 8% per annum from the date of filing of suit till its realization is passed in favour of plaintiff and against the defendants no.1, 2 & 3. Further the plaintiff is also entitled for the attachment of the hypothecated machinery and stock Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 36 of pages 38 owned by defendants no.1, 2 & 3 and their auction in the public and depositing the proceeds thereof in the loan account of the defendant. Decree stands passed accordingly.
20. Decree Sheet be prepared accordingly.
21. File be consigned to record room after completion of necessary formalities.
(Announced in the open (RAKESH KUMAR)
court today on 28.07.2010) ADJ03 (CENTRAL)/DELHI
Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 37 of pages 38
Suit No.1148/08
Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors.
16.07.2010
Present: As before.
No time left.
Put up on 28.07.2010 for orders.
(RAKESH KUMAR)
ADJ03(C)/DELHI/16.07.2010
28.07.2010
Present: As before.
Vide a separate judgment, suit of the plaintiff is decreed against defendants no.1, 2 & 3 only, whereas the same is dismissed qua defendants no.4 & 5.
Decree Sheet be prepared.
File be consigned to Record Room after completion of necessary formalities.
(RAKESH KUMAR) ADJ03(C)/DELHI/28.07.2010 Punjab & Sind Bank Vs. M/s Neha Enterprises & Ors. (Suit No.1148/08) Page no. 38 of pages 38