Oriental Bank of Commerce vs Shri Mohinder Singh and Others

Valmiki J Mehta, J.—This case is on the Regular Board of this Court since 17.1.2011. Today it is effective item No. 3 on the Regular Board. It is 12:45 pm but no one appears for the parties. I have therefore perused the record and am proceeding to dispose of the appeal. The Respondents are ex parte in this Court as they have failed to appear even after publication. They were ex parte even in the Trial Court.

The challenge by means of this Regular First Appeal u/s 96 of the Code of Civil Procedure, 1908 is to the impugned judgment and decree dated 16.8.2001 whereby the suit of the Appellant/bank for recovery has been dismissed although the bank proved the due filing/institution of the suit, as also the security documents and also the acknowledgment of debts. The suit was dismissed basically on the ground that the amounts shown to be due in the acknowledgment of debt forms are not reflected by way of entries in the statement of accounts. I have already noted that the Defendants were ex parte, yet the suit was dismissed.

The facts of the case are that the Respondent No. 1 obtained a term loan from the Appellant bank for purchasing of an industrialized sewing motorized machine and for which necessary documents were executed and which have been exhibited by the Trial Court. The loan/hypothecation agreement has been exhibited as Ex.PW1/2. The loan application form was exhibited as Ex.PW1/1. The guarantee documents executed by Respondent Nos. 1 and 2 were exhibited as Ex.PW1/3 and Ex.PW1/4. The other vouchers showing receipt of the amount were exhibited as Ex.PW1/5, Ex.PW1/6 and Ex.PW1/7. The balance confirmation letter dated 9.6.1997 was exhibited as PW2/1 and the balance confirmation letter dated 10.3.1999 has been exhibited as PW3/9. The statement of account has been exhibited as Ex.P3/11.

The reasoning of the Trial Court for dismissing the suit, is very curious to say the least and of course wholly illegal and perverse. It is therefore necessary that I reproduce the findings of the Trial Court for dismissal of the suit and which reads as under:

I have heard the ld. counsel for the Plaintiff and have carefully perused the records of the case. According to the plaint, the Defendants had executed balance confirmation/revival letter executed by Defendant No. 1 on 9.6.97 and 10.3.99. As regard to first balance confirmation/revival letter is concerned, the same has been proved through the witness, PW-2 who has deposed that a sum of Rs. 1,15,595/- (i.e. 100000/- + 15,595/-) has been acknowledged by Mohinder Singh vide Ex.PW-2/1. On perusing the statement of account Ex.PW-3/11 wherein Shri V.K. Soin who has field the present suit has stated that as per the books of accounts maintained by the Plaintiff bank, a sum of Rs. 1,94,823/- shows a debit balance in term loan account which includes interest upto 7.11.2000 which is recoverable from the Defendant by the Plaintiff. On perusing the said statement of account, I observe that no entry finds mention in regard this amount on 9.6.97. Although there is a entry on 30.5.97 and 9.7.97 but there is no such entry. Similarly the other acknowledgement dated 10.9.99 wherein the Defendant has allegedly acknowledged on 10.3.99 wherein the Defendant has acknowledged Rs. 1,59,553/- as on 10.3.99 which has been proved as Ex.PW-3/9 this amount does not find mentioned in the statement of account, Ex.PW-3/11. Therefore, in my view, the Plaintiff bank has not properly maintained the accounts of the Defendant and in view of the above observations, the such type of statement of account cannot be relied upon by the Plaintiff and the same cannot be believed as true and correct as being kept under the Banker''s Book of Evidence act. I further observe that in the plaint I find mentioned that a legal notice sent to the Defendants on 9.4.98, a copy of which has been proved as Ex.PW-3/5. In this legal notice, a debit balance of Rs. 1,79,392/- including interest upto 30.6.98 has been shown but on perusing the statement of account, I do not find any balance of this amount as on 30.6.98.

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The reasoning of the Trial Court is clearly faulty because the balance confirmation letter showed the amount due on a particular date whereas interest is applied/debited in the account on specific dates, and which may not be the dates of the acknowledgment of debt letters. The Trial Court has therefore committed a clear-cut perversity in requiring that what is the amount due as stated in the acknowledgment of the debt letter have necessarily to find mention in the statement of accounts. There is no such requirement in law and nor is the same a practice of any bank whatsoever.

In view of the above, I set aside the impugned judgment and decree and decree the suit of the Appellant bank against the Respondent for a sum of Rs. 1,94,823/- with costs and pendente lite and future interest till realization of the decretal amount at 12 % per annum simple. Decree sheet be prepared. Trial Court record be sent back.