Vishwa Nath vs State Bank of India

Swatanter Kumar, J.—This Regular First Appeal has been on the regular board for the last more than 10 days but nobody has appeared as and when the case has been called out. In these circumstances, the Court has no option but to peruse the file itself and pronounce the judgment in accordance with law. Even today this matter has been called out 3 times but nobody appeared. Consequently, I proceed to record the judgment.

State Bank of India has instituted a suit for recovery of Rs. 46,171.73 against the defendants. The claim was sustained on the facts that a proposal for credit facilities was received by the bank from the appellant, which was accepted by the bank for grant of limited financial assistance for a sum of Rs. 45,000/. This amount was sanctioned and disbursed. As per the terms and conditions agreed between the parties, it is alleged that the defendants were to pay interest at the rate of 11/2% per annum over and above the State Bank advance rate and subject to minimum 81/4% p.a. The stock of rawmaterial was hypothecated to the bank and was liable to be sold in the event of the fault. The defendantsfirm and its partners executed an agreement for hypothecation dated 17.11.1970 and executed a promissory note dated 17.11.1970, in favour of the bank. The promissory note was duly endorsed by the defendant No. 3. These were the various documents which have been executed by the defendants in favour of the plaintiffBank as security for the said advance. The defendants submitted the confirmation slip of the balance amount claimed by the plaintiffBank on 31.10.1972. The oral as well as written requests to liquidate the account by repayment of the amount due went in vain. Finally, the plaintiffBank served a registered A/D letter to the defendants on 19.4.1973 claiming the aforestated amounts. As no response was received from the defendants the plaintiffBank sold the goods and after adjusting the amounts, the plaintiffBank claimed Rs. 46,171.73 with further interest at the rate of 12% p.a. from the date of the suit till its realisation.

This suit was contested by the defendants who filed separate written statements with regard to the maintainability of the suit and the right to institute the same. The defendants even denied the execution of some documents. Defendant No. 3 denied that he had not even executed the promissory note as security for repayment of the land on behalf of the Defendants No. 1 and 2. Various objections with regard to the authority of the person who instituted the suit on behalf of the Bank, objection with regard to the nonjoinder of necessary parties as well as objection with regard to the jurisdiction of the Court were raised. It was stated that the suit has not been valued properly for the purpose of court fee and jurisdiction. The question of limitation was raised. On the pleadings of the parties, the learned Trial Court vide its order dated 28.11.1974 framed the following 19 issues :

Whether the plaintiff is estopped from filing the suit ? OPD 2(b)

Whether the plaintiff has no cause of action against defendant No. 2(b) ? OPD 2(b)

Whether the plaintiff has no locus standi to file this suit ? OPD 2(b)

Whether the suit in the present form is not maintainable ? OPD 2(b)

Whether the suit is barred by time ? OPD 2(a)

Whether the plaint is not properly verified ? OPD 2(a)

Whether the suit is not properly valued for the purposes of Court fee and jurisdiction ? OPD 2(a)

Whether the firm of M/s Sham Dass Roshan Lal has been dissolved and the suit is not competent against the firm ? OPD 2(a)

Whether the suit is not competent against Vishwa Nath defendant ? OPD 3

Whether Sh. P.N. Bidani had no authority to file suit and to sign/verify the plaint ? OPD 3.

Whether the suit is bad for nonjoinder of necessary parties ? OPD 3

Whether the plaintiff bank is a corporation constituted under the State Bank of India Act, 1955 and Sh. P.N. Bidani, was the Branch Manager of the Bank of Jullundur ? OPP.

Whether the plaintiff Bank granted the facility of cash credit limit of Rs. 45,000/ to defendants No. 1 and 2 and in respect thereof executed agreement dated 17.11.1970 and pronote dated 17.11.1970 in favour of defendant No. 3 and endorsed the same in favour of the plaintiff ? OPP

Whether defendant No. 3 had stood as surety for the repayment of the loan by defendant No. 1 and 2 and in that behalf executed agreement dated 17.11.1970 in favour of the Bank ? OPP

Whether the defendant No. 1 and 2 signed the confirmation slip dated 31.10.1972 ? If so its effect ? OPP

Whether the plaintiff is entitled to claim interest, if so to what rate and what amount ? OPP

Whether the agreement promissory note were executed without consideration ? OPD 2(a)

Whether the plaintiff is entitled to recover Rs. 46171.73 from the defendant ? OPP

Whether there is any resolution of the plaintiff for authorisation to file the present suit ? OPP

Relief.

On account of the amendment in the written statement by Vishwa Nath defendant No. 3 the following additional issues No. 19A, 19B and 19C were framed by Mrs. Bakshish Kaur my learned predecessor on 31.8.1976.

Additional issues :

19A. Whether the plaintiff sold the goods hypothecated after due information to the defendants, if not to what effect ? OPP.

19B. Whether the plaintiff has acted in a most intelligent way and has impaired the value of the property by taking prompt legal action against defendants 1 and 2 ? If so its effect ? OPD

19C. Whether the plaintiff bank has committed acts or omissions and thus impaired the property duly hypothecated with the Bank, if so to what effect ? OPD 3.

The parties were given the opportunity to lead evidence. Thereafter, the learned Trial Court decided all the issues against the defendants and in favour of the plaintiff.

The perusal of the judgment of the learned Trial Court is a wellreasoned. The learned Trial Court came to the conclusion that documents were executed and the rate of interest claimed by the Bank was based upon the promissory note and the agreement executed between the parties on 17.11.1970. Most of the issues like Issue No. 1, 2, 3, 4, 6, 10 and 11 were either not pressed by the learned counsel appearing for the various defendants or there was nothing on record to substantiate/justify the recording of any finding to the contrary what have been recorded by the learned Trial Court. The plea of dissolution which was sought to be established by the defendants in order to avoid the liability towards the Bank was rightly rejected by the learned Trial Court on the basis of statement of PW himself who made no such mention while being examined. The following findings of the Trial Court are worth noticing :

"This objection was taken by Roshan Lal defendant in the written statement filed by him and curiously Roshan Lal defendant who stepped into the witness box as DW1 has not ventured to state anything about the dissolution of the firm and I accordingly decide this issue against the defendant to the above extent and effect."

The objection with regard to authority of the officer who had instituted the suit on behalf of the Bank, the learned Trial Court has relied upon the general Regulation No. 77 of the State Bank of India and Section 50 of the State Bank of India Act, 1955 besides the Chairman any Officer or employee of the Bank empowered under Regulation 76 to sign and verify the plaint or written statement who has been duly authorised by the Executive Committee. The Bank had examined 4 witnesses; PW1 to PW4. Sh. S.C. Jain (PW4) had proved the case of the plaintiffBank. The authority in favour of Sh. P.N. Bidani was proved by production of a notification dated 25.10.1974.

The suit of the Bank was based upon promissory note Ex. P3, deed of guarantee Ex. P4 and the balance confirmation slip signed by the defendants Ex. P5. These documents remain unrebutted as no documentary or oral evidence was produced on behalf of the defendants to create a dent in the case pleaded by the Bank and proved by leading plausible evidence.

For the reasons aforestated, I am unable to see any error in the judgment of the learned Trial Court. On the contrary, the learned Trial Court has properly appreciated the documentary and oral evidence produced by the parties and has come to a conclusion which is otherwise proper and is in consonance with the settled principles of law.

For the reasons aforestated, the present appeal is dismissed. However in the facts of the case, there shall be no order as to cost.