Sat Pal ( 1 ) THIS is a suit for recovery of a sum of Rs. 23. 53,762. 00together with pendente lite and future interest @ 13. 5% p. a. on Rs. 10,15,247. 00 and @ 15. 5% on Rs. 10,69,160. 65p and @ 16. 5% p. a. onrs. 2,69,354. 35p from the date of suit till realisation of the amount. ( 2 ) THE facts of the case briefly stated are that the plaintiff is abanking company constituted under Banking Companies (Acquisition andtransfer of Undertakings) Act, 1970 having its Head Office at Calcutta andone of its Branch Offices at 17, Parliament Street, New Delhi, Shri I. M. Mishra being the Principal Officer of the plaintiff Bank is duly authorised tosign and verify the pleadings and to institute and prosecute the present suit. ( 3 ) AS per averments made in the plaint, at the request of defendantno. 1 which is a Private Limited Company incorporated under thecompanies Act, 1956 and in consideration of defendants No. 2 to 5 andshri T. R. Iyengar (since dead) agreeing to stand guarantee in their personalcapacity, the plaintiff Bank sanctioned the credit facilities of term loan ofrs. 6. 25 lacs, cash credit (Hyp.) facility of Rs. 3. 70 lacs, advance againstd. D. Bills of Rs. 80,000. 00 and letters of credit (foreign) Rs. 2. 00 lacs todefendant No. 1 vide their letter dated 7th October, 1983. The de defendantno. 1 through its Director late Shri T. R. lyengar accepted various termsand conditions of the sanction of the above mentioned facilities vide letterdated 8/10/1983. ( 4 ) IT is further alleged that vide their resolution dated 8/10/1983, the defendant No. 1 authorised its directors, namely Shri R. Prasankumar lyengar and Shri Sharad Chandra to execute all the necessarydocuments on behalf of the defendant No. 1 for the purposes of borrowingthe money from the Plaintiff-Bank. Accordingly, defendant No. 1 throughthe said two directors executed various documents, namely, agreement ofhypothecation dated 8. 10. 93, letter dated 8. 10. 83, regarding maintenanceof margin in Cash Credit (Hyp.), Agreement dated 8. 10. 83 relating tosecurities of goods covered against bills, money consideration receipts dated22. 10. 83 for Rs. 2,76,840. 00, pronote dated 22. 10. 83 for Rs. 2,76,840. 00, moneyconsideration receipt for Rs. 2. 10 lacs and Pronote dated 26. 12. 83 forrs. 2. 10 lacs in respect of the facility of term loan and cash credit (Hyp. ). 10. 83 relating tosecurities of goods covered against bills, money consideration receipts dated22. 10. 83 for Rs. 2,76,840. 00, pronote dated 22. 10. 83 for Rs. 2,76,840. 00, moneyconsideration receipt for Rs. 2. 10 lacs and Pronote dated 26. 12. 83 forrs. 2. 10 lacs in respect of the facility of term loan and cash credit (Hyp. ). ( 5 ) IT is further alleged in the plaint that in terms of sanction letterdated 7. 10. 83, the plaintiff agreed to advance term loan as and whenrequired by the defendant No. 1 for the purpose of plant and machinery etc. and the defendant No. 1 agreed to repay the amount of loan in term loanaccount with interest @ 3. 5% over the Reserve Bank of India rate with aminimum of 13. 5%, with quarterly rests spread over 50 equal monthlyinstalments of Rs. 22. 500. 00 commencing after five months of the date of firstdisbursement of loan. ( 6 ) IT is further stated in the plaint that the plaintiff advanced a sumof Rs. 4,96,840. 00 in the term low Account on different dates by makingpayments to the various suppliers as per the request of the defendant No. 1and in terms of the agreement of term loan, the plant and machinerypurcnased by defendant No. 1 from the loan advanced by the plaintiffstands charged and hypothecated to the plaintiff. ( 7 ) IT is further alleged that in terms of the agreement of hypothecation executed on 8. 10. 83 by the defendant No. 1, the plaintiff Bank agreedto advance money to defendant No. 1 in the Cash Credit Account fromtime to time against security and hypothecation of stocks of raw materialsand the defendant No. 1 agreed to pay on demand by the plaintiff theamount advanced by the plaintiff alongwith interest @ 5. 5% over the Bankrate with minimum of 15. 5% p. a. with quarterly rests. ( 8 ) IT is further slated that the defendants 2 to 5 and the deceasedshri T. K. . Iyengar being the directors of the defendant No. 1 stood guaranteefor the amount advanced or to be advanced to the defendant No. 1 in theterm loan and Cash Credit (Hyp.) Account and in respect of various othercredit facilities. ( 9 ) IT is then alleged in the plaint that in June, 1984 the plaintiffallowed defendant No. 1 the facility of D. D. Bills (IBD) of Rs. 80,000. ( 9 ) IT is then alleged in the plaint that in June, 1984 the plaintiffallowed defendant No. 1 the facility of D. D. Bills (IBD) of Rs. 80,000. 00 tobe utilised in the facility of Cash Credit (Hyp.) Account and thus the saidcash Credit facility to defendant No. 1 was raised from Rs. 3. 70 lacs tors. 4. 50 lacs. On 19. 2. 85 the plaintiff-Bank at the request of defendantno. 1, sanctioned fresh credit facilities of Cash Credit (Pledge) of Rs. 1. 76lacs for payment of customs duty against the pledge of imported rawmaterials and the defendant No. 1 through their directors Shri R. P. K. lyengar and Shri Sharad Chandra executed documents, namely, agreementto pledge dated 2. 3. 85 and letter dated 2. 3. 85 regarding maintenance ofmargin. In terms of the said documents executed by the defendant No. 1,the plaintiff-Bank agreed to make advances to the defendant No. 1 to theextent of Rs. 1. 76 lacs by keeping margin of 25% on the value of stock consisting of imported raw materials stored in the godown within the factorypremises of the defendant No. 1 at Ghaziabad and the defendant No. 1agreed to repay the money so advanced alongwith interest @ 6% over thebank rate with minimum of l6% with quarterly rests and other incidentalsincurred by the plaintiff and debited in the Account of defendant No. 1. ( 10 ) IT is further alleged that at the request of defendant No. 1 theplaintiff-Bank sanctioned and granted additional facility of Cash Credit (Pledge) of Rs. 100 lac to the defendant No. 1 subject to the terms andconditions mentioned in the sanction letter dated 22. 3. 85 duly accepted bythe defendant No. 1. In terms of the said sanction letter dated 22. 3. 86 theplaintiff-bank agreed to advance money by way of loan to the defendantno. 1 in the Cash Credit (Pledge) Account against the pledge and security ofthe stocks of the defendant No. 1 lying/stored in the godown at Ghaziabadand the defendant No. 1 agreed to repay on demand all sums advanced bythe plaintiff in the above mentioned Account alongwith interest @ 6. 5^over the Bank rate with minimum of 16. 5% p. a. to be charged quarterly inthe Account. 5^over the Bank rate with minimum of 16. 5% p. a. to be charged quarterly inthe Account. ( 11 ) IT is further alleged in the plaint that the defendant No. 1 did notadhere to the financial discipline as agreed to and undertaken by them in thevarious documents mentioned hereinabove and inspite of repeated promisesand assurances given by the defendant No. 1 from time to time, failed andneglected to regularise the Accounts. Accordingly in terms of the agreements in respect of various facilities and as per the practice, the plaintiffbank charged additional/penal interest @ 2% p. a. in the Cash Credit Pledgeaccount from June, 1987 in Cash Credit (Hyp.) Account from January,1987 and in term loan/pronote Account from June, 1986. It is furtheralleged that at the time of filing of the suit a total sum of Rs. 23,53,762. 00namely Rs. 10,15,247. 00 under the term loan (Pronote) Account, Rs. 10,69,160/65 under Cash Credit (Hyp.) Account and Rs. 2,69,345/35 underthe Cash Credit (Pledge) Account inclusive of interest upto 18/12/1989 are outstanding against the defendants which they have failed to pay. ( 12 ) IT is further alleged that on 16/01/1987 the defendantno. 1 acknowledged their liability for the amount due to the plaintiff in allthe three Accounts by executing balance confirmations for Rs. 6,44,809/25in the term loan (pronote) Account, Rs. 5,87,782. 27 in the Cash Credit (Hyp. ). Account, Rs. 17,77. 746/39 in the Cash Credit (Pledge) Account ason 31. 12. 86. It is further stated that the defendant No. 1 also admittedtheir liability towards the plaintiff-Bank in their balance sheet for the yearending on 31. 5. 85, 31. 5. 86 and 20. 3. 87. ( 13 ) IT is then alleged in the plaint that since the defendant No. 1failed and neglected to clear/liquidate their liability, the plaintiff-Bank issueda legal notice dated 14. 12. 88 to the defendants through their Counsel andon their failure to pay the amount demanded in the notice, the plaintiffadvertised sale of the pledged stocks in the newspapers Hindustan Timesand Nav Bharat Times both dated 28. 11. 89. but the sale could not materialisebecause the prospective buyers and the Bank officials were not allowed tohave inspection of the goods. The plaintiff Bank incurred expenses ofrs. 18. 000. 00 on advertising the sale of the pledged goods/stocks and the samewas also debited to the Cash Credit (Pledge) Account of the defendantno. 1. 11. 89. but the sale could not materialisebecause the prospective buyers and the Bank officials were not allowed tohave inspection of the goods. The plaintiff Bank incurred expenses ofrs. 18. 000. 00 on advertising the sale of the pledged goods/stocks and the samewas also debited to the Cash Credit (Pledge) Account of the defendantno. 1. ( 14 ) IT is further alleged that after receipt of the legal notice, thedefendant No. 1 vide their letter dated 25. 10. 89 while acknowledging theirliability in all the three accounts promised to pay but failed to do so. Eventually the plaintiff-bank issued a final recall notice to the defendants videtheir letter dated 3. 11. 89 calling upon the defendants to liquidate the outstandings in all the three Accounts within seven days but the defendantsfailed to pay, hence the present suit has been filed by the plaintiff. ( 15 ) AFTER service, defendants No. 1 and 5 were being represented bya Counsel at the initial stage, but he discontinued appearing on behalf ofthose defendants from 27. 7. 92 onwards. Defendants No. 2, 3 and 4 wereserved by means of proclamation published in the newspapers Statesmandated 27. 4. 91 for 3. 5. 91. But they failed to appear. Accordingly all thedefendants were proceeded against ex pane vide orders dated 25. 1. 93. Onthe same date, the plaintiff was directed to file ex parte evidence by way ofaffidavits. Accordingly, the plaintiff Bank has filed the affidavit of Shri P. C. Dhingra, Assistant General Manager Indl. Finance Branch, Connaught Circus,new Delhi. All the averments and allegations made in the plaint have beenproved through the said witness. ( 16 ) EX. P-1 is the power of attorney dated 6. 3. 73 authorising Shrii. M Mishra, the then Chief Manager of the plaintiff Bank to sign and verifythe plaint on behalf of the plaintiff. Ex. P-2 is the letter dated 7. 10. 83 bywhich the plaintiff-Bank at the request of defendant No. 1 and in consideration of the defendants 1 to 5 and deceased T. R. Iyengar agreeing to standguarantee in their personal capacity sanctioned the credit facilities to thetune of Rs. 12. 75 lacs. Ex. P-3 is the letter dated 8. 10. 83 signed by twodirectors of the defendant company accepting the terms and conditions asset out in Ex. P-2. Ex. P-4 is the copy of the resolution dated 8. 10. 12. 75 lacs. Ex. P-3 is the letter dated 8. 10. 83 signed by twodirectors of the defendant company accepting the terms and conditions asset out in Ex. P-2. Ex. P-4 is the copy of the resolution dated 8. 10. 87 passedby the defendant No. 1 authorising the defendant No. 1 to borrow the creditfacilities mentioned hereinabove. Ex. P-5, P-6, P-7, P-8, P-9, P-10 and P-11are the documents, namely, (a) Agreement hypothecation dated 8. 10. 83; (b) Letter dated 8. 10. 83 regarding maintenance of margin in Cash Credit (hyp.); (c) Agreement dated 8. 1083 regarding security of goods coveredagainst bills etc. (d) money consideration receipt dated 22. 10. 83 for Rs. 2,76 840. 00; (e) Pronote dated 22. 10. 83 for Rs. 2,76,840. 00 (f) Money consideration receipt for Rs. 2,10,000. 00dated 26. 12. 83, duly executed by the twodirectors of the defendant No. 1 who were authorised by the Boardresolution Ex. P-4 respectively. Ex. P-12 is the copy of the certificate ofregistration registered with the Registrar of Companies, Delhi and Haryanaregarding the charge over the plant and machinery stocks and raw materialand finished and semi finished goods. Ex. P-13 is the agreement of guaranteeduly signed and executed by defendants 2 to 5 and late Shri T. R. lyengarwho stood guarantee. by the amount advanced or to be advanced to thedefendant No. 1 in the term loan Cash Credit (Hyp) Account and in respectof various other credit facilities. Ex. P-14 is the letter of request dated22. 684 of the defendant No. 1. Ex. P-15 is the letter of sanction dated192 85 by which the plaintiff-Bank bad sanctioned fresh credit facilities ofcash Credit (Pledge) of Rs. 1. 76 lacs. Ex. P-16 is the agreement of pledgedated 2. 3 85 and Ex. P-17 is the letter dated 2. 3. 85 regarding maintenanceof margin both duly signed by Shri R. P. K. Iyengar and Shri Sharad Chandra,directors of the defendant No. 1. Ex. P-18 is the copy of the Boardresolution dated 20. 2 85 of the defendant No. 1. Ex. P. 19 is the letter dated20 2. 85 of the defendant No, 1 bearing the signatures of defendant No. 1,2 and 4 confirming the sanction of Rs. 1. 76 lacs. Ex. P-20, is the copy ofthe bank letter issued by the plaintiff-Bank to M/s. Chhota Lal Keshav Jeeshah and Sons enclosing the bank draft for Rs. 1. 76 lacs. Ex. P. 19 is the letter dated20 2. 85 of the defendant No, 1 bearing the signatures of defendant No. 1,2 and 4 confirming the sanction of Rs. 1. 76 lacs. Ex. P-20, is the copy ofthe bank letter issued by the plaintiff-Bank to M/s. Chhota Lal Keshav Jeeshah and Sons enclosing the bank draft for Rs. 1. 76 lacs. Ex. P-21 is thesanction letter dated 22. 3. 86. Ex P-22 and P-23 and P-24 are the statementof Accounts of the defendant No. 1 in respect of term loan (pronote)Account. Cash Credit (Hyp.) Account, Cash Credit (Pledge) Accountrespectively duly certified urder the Bankers Books Evidence Act. Ex. P-25to Ex. P-36 are the various letters which bear the signatures of the defendantno. 4 on behalf of the defendant No. 1 acknowledging the liability ofdefendant No. 1 for the payment of the amounts due in the aforesaid threea/cs. Ex. P37, P-38 and P-39 are the balance confirmation by the defendantno. 1 acknowledging their liability for Rs. 6,44,809/25 in the term loan (pronote) Account, Rs. 5,87,782/27 in the Cash Credit (Hyp.) Account andrs. 1,77,746/39 in the Cash Credit (Pledge) Account as on 31. 12. 86. Exs. P-40, P-41 and P-42 are the balance sheet of the defendant No. 1 for theyears ending 31. 5. 84, 31. 5. 85 and 28. 2. 87 respectively. Ex. P-43 is the copyof the legal notice sent by the Plaintiff Bank through their Counsel to thedefendants and Ex. P-44 to P-49 are the original postal receipts and Ex. P-50to P-53 are the acknowledgement due cards in respect of aforesaid legalnotice. Ex. P-54 is the letter of the defendant No. 1 dated 25. 10. 89acknowledging their liability in all the three accounts mentioned hereinaboveand promising to pay the amount which they failed to pay. Ex. P-55 is thestatement of Plant and machinery of the defendant No. 1 which was hypothecated to the plaintiff Bank. Ex. P-56 is the statement of hypothecatedgoods as on 1. 10. 85, Ex. P-57 to Ex. P-60 are the copies of the plaintiff Bankletters dated 12. 9. 84, 10. 11. 84, 22. 8. 80 and 30. 5. 88 issued by the plaintiffbank to the defendant No. 1 demanding the payment of the Bank amount. ( 17 ) ALL these exhibits have beer. duly proved by Shri P. C. Dhingra, whohas signed and sworn the affidavit on behalf of the plaintiff-Bank. 9. 84, 10. 11. 84, 22. 8. 80 and 30. 5. 88 issued by the plaintiffbank to the defendant No. 1 demanding the payment of the Bank amount. ( 17 ) ALL these exhibits have beer. duly proved by Shri P. C. Dhingra, whohas signed and sworn the affidavit on behalf of the plaintiff-Bank. This witnesshas also proved that on the failure of the defendants to pay the amountdemanded in the legal notice Ex. P-43, the plaintiff advertised sale of thepledged stock in two newspapers, namely, Hindustan Times and Nav Bharattimes both dated 22. 11. 89 but the sale could not materialise because theprospective buyers and bank officers were not allowed to have the inspectionsof the goods by the defendants and the plaintiff Bank had to incur expensesof Rs. 18,000. 00on advertising the sale of the pledged goods/stocks and thesame were debited to the Cash Credit (pledge) Account of the defendantno. 1. He also stated in the affidavit that in all, the plaintiff is entitled torecover from defendants a sum of Rs. 23,53,762/20 alongwith interestpendente lite and future @ 13. 5% p. a. on the term loan (Pronote) Accountand @ 15. 5% on Cash Credit (Hyp.) Account 16. 5% per annum on Cashcredit Pledge Account being the agreed rate. ( 18 ) AS stated hereinabove, the defendants were proceeded againstex parte. They have not filed any written statement controverting theaverments and allegations made in the plaint nor they have examined anywitness to rebut the averments made in the plaint. On the other hand theplaintiff Bank filed evidence by way of affidavit of Shri P. C. Dhingra toprove the averments made in the plaint, hence the plaintiff Bank is entitledto succeed in the suit. Accordingly, the suit for recovery of a sum ofrs. 23,53. 762. 00is decreed with costs in favour of the plaintiff and againstthe defendants. The plaintiff bank shall be entitled to pendente lite andfuture interest @ 13. 5% p. a. on Rs. 10,15. 247. 00 outstanding in the Termloan (Pronote) Account: @ 15 5% on Rs. 10. 69,160/65 outstanding in Cashcredit (Hyp.) Account and @ 16. 5% p. a. on Rs. 2. 69,354,35 outstanding inthe Cash Credit (Pledge) Account. Decree may be drawn accordingly. IA 6573/91 ( 19 ) DURING the pendency of the suit, the plaintiff Bank filed anapplication bearing IA No. 5673/91 under Order 38 Rule 5 read with Section151 of the Code. 10. 69,160/65 outstanding in Cashcredit (Hyp.) Account and @ 16. 5% p. a. on Rs. 2. 69,354,35 outstanding inthe Cash Credit (Pledge) Account. Decree may be drawn accordingly. IA 6573/91 ( 19 ) DURING the pendency of the suit, the plaintiff Bank filed anapplication bearing IA No. 5673/91 under Order 38 Rule 5 read with Section151 of the Code. In this application the plaintiff Bank has prayed for orderof attachment in respect of 250 equity shares of Rs. 10. 00 each issued in Subdivision of Bajaj Auto Ltd. , registered in the name of defendant No. 2bearing Nos. 7793911 to 7794160 under Certificate No. 74770-74774 and hassought permission of the Court to sell the said equity shares on the quotedprice of shares and adjust the net sale proceeds against the suit amount. Notice of the application was accepted by the learned Counsel of thedefendants on 21. 5. 1992 but no reply has been filed by the defendants. Theapplication is allowed in view of the facts stated therein and the plaintiff isallowed to sell the said equity shares in the manner stated above. Theplaintiff will, however, give adjustment of this amount to the defendantsagainst the decreed amount. With this order this IA stands disposed of. IA 9500/89 ( 20 ) THIS is an application filed by the plaintiff under Order 40 Rulei read with Section 151 of the Code. In this application it has been prayedthat a Receiver be appointed with the direction to inter upon the premisesof defendant No. 1 Jyoti Cinema compound, G. T. Road, U. P. Border,ghaziabad and to break open the lock if any found on the premises and alsoto seek police help in case of any resistance and further to take into custodyor possession the goods/stocks/plant and machinery, pledged and/or hypothecated with the plaintiff-Bank and to prepare an inventory of the saidgoods and machinery and to sell by private sale or public auction and paythe sale proceeds to the plaintiff-Bank or deposit the same in the Court. ( 21 ) NOTICE of this application was issued to the defendants and areply was also filed on behalf of the defendant No. 1 on 12. 4. 1991. Asstated hereinabove, all the defendants were proceeded against ex parte videorder dated 25. 1. 93. ( 21 ) NOTICE of this application was issued to the defendants and areply was also filed on behalf of the defendant No. 1 on 12. 4. 1991. Asstated hereinabove, all the defendants were proceeded against ex parte videorder dated 25. 1. 93. At the time of final hearing of the case the learnedcounsel for the plaintiff submitted that since the plaintiff-Bank has provedits case by way of affidavit of Shri P. C. Dhingra, an officer of the Bank,this application be allowed and a Receiver be appointed. ( 22 ) I have given my thoughtful consideration to the submission madeby the learned Counsel for the plaintiff and have perused the application. Since I have decreed the suit in favour of the plaintiff and against thedefendants, I am of the view that this application should be allowed in orderto protect the interest of the plaintiff-Bank to ensure that the Judgmentdebtors shall not dispose of the goods/stocks/plant and machinery, pledgeand/or hypothecated with the plaintiff-Bank. Accordingly, I appoint Shrir. C. Nangia. . Advocate (retired Joint Registrar of this Court), Chamberno. 346, Delhi High Court Lawyers Chamber, as Receiver who shall go tothe premises of the defendant No. 1 at Jyoti Cinema compound, G. T. Road. Delhi, U. P. ,boarder,ghaziabad to take into custody or possession the goods/stocks/plant and machinery, pledged and/or hypothecated with the plaintiffbank and shall prepare the inventory of the said goods and machinery. Thereceiver is authorised to break open the lock, if any, found on the premisesand also to seek poice help, if necessary. The Receiver is further directedto sell the said goods and machinery. He will. however, sell the goods andmachinery after notice to the Judgment Debtors and if the Judgmentdebtors are able to get a better price for those goods and machinery, thenhe will sell the same to such a party. The amount of the sale proceeds willbe deposited by the Receiver with the plaintiff who will give adjustments ofthis amount against the decreed amount. The Receiver will be paid a sumof Rs. 5. 000. 00 as his fees by the plaintiff-Bank. With this order I. A. standsdisposed of. I. A. Stands disposed of.