S. C. MOHAPATRA, J. ( 1 ) DEFENDANT No. 2 is appellant against a decree making him jointly and severally liable for the amount decreed. ( 2 ) PLAINTIFF is a Bank constituted under the State Bank of India Act having a branch at industrial estate, Rourkela. On 17-12-1982 plaintiff sanctioned a sum of Rs. 1,10,000/-by way of cash credit Mandi facility and Rs. 79,000/- by way of cash credit bill facility to defendant No. 1. Defendant No. 2 stood guarantee for the amounts to be advanced and both defendants Nos. 1 and 2 executed required documents. Defendant No. 1 secured the loan facility by pledging of goods, both raw materials i. e. different chemicals, finished goods and merchandise. When relationship so continued, defendant No. 1 defaulted in making payments. Notice to him by plaintiff remained unreplied. Hence, suit has been filed for recovery of the amount due including interest at the rate of 14 per cent per annum for a sum of Rs. 91,762. 37 with pendente lite and future interest. 2a. Defendant No. l did not contest. Case of defendant No. 2 is that he only signed blank form since defendant No. 1 was his close friend who brought those forms. He denied to have executed any promissory note or to have executed any delivery letters. His specific case is that pledged goods were not insured though required under the contract. Since plaintiff did not take adequate care in respect of the goods, the same were lost and accordingly, he is not liable as guarantor which stood discharged. ( 3 ) PLAINTIFF examined two witnesses and proved documents marked as Exts. 1 to 41 series in support of his case. Defendant No. 2 examined two witnesses only. On the basis of these materials trial Court held that defendant No. 1 had taken loan and is liable as claimed in the suit. Trial Court has further held that defendant No. 2 executed the necessary documents and became the guarantor. As regards discharge of liability of defendant No. 2, trial Court held that in absence of evidence that goods hypothecated have been lost on account of plaintiff, defendant No. 2 is liable. This is the grievance of defendant No. 2 in this appeal. ( 4 ) MR.
As regards discharge of liability of defendant No. 2, trial Court held that in absence of evidence that goods hypothecated have been lost on account of plaintiff, defendant No. 2 is liable. This is the grievance of defendant No. 2 in this appeal. ( 4 ) MR. A. K. Mohanty, learned counsel for defendant No. 2 appellant, submitted that liability of defendant No. 2 has stood discharged on account of loss of the hypothecated goods due to negligence of plaintiff. He relies upon the provisions of Ss. 139 and 149 of Contract Act in support of his contention. Mr. P. V. Ramdas, learned counsel for plaintiff-respondent while not disputing that in case it is found that on account of negligence of plaintiff goods hypothecated were lost, Ss. 139 and 141 of the Contract Act may not be attracted submitted that defendant No. 2 who is to get advantage of these provisions is required to prove necessary facts to draw inference in his favour. As defendant No. 2 has not proved the facts trial Court has rightly found that negligence of plaintiff has not been proved and there is no scope for interference with the decree and principle liability of goods pledged would not be attracted to hypothecated goods. ( 5 ) SINCE defendant No. 2 seeks to get excluded from his liability by relying upon Ss. 139 and 141 of the Contract Act, onus lies on him to prove the requirements of those provisions of law. It goes without saying that no evidence can be adduced unless there is supporting assertions in the pleading of the party in that respect. Defendant No. 2 has asserted in paragraph 10 of the written statements in this regard which reads as follows :- "that the defendant alternatively pleads that the defendant No. 2 is discharged of its liability for the variance and non-performance of the contract by the plaintiff. The plaintiff under the contract was to grant loan on security of goods, fully insured, but neither the goods were insured, nor the plaintiff took any step to safeguard the security and in fact is not under its control and has lost the same impairing the rights of the defendant No. 2 and the eventual remedies, available to the defendant No. 2.
" p. W. 1 who is a clerk of the Bank has proved the documents but has not been cross-examined by defendant No. 2. P. W. 2 who was the Field Officer of the plaitiff's branch was however categorically questioned about insurance of the goods hypothecated. He has stated : "defendant No. 1 should insure the pledged goods. I do not remember if he has deposited the insurance policy to the plaintiff. I cannot say if the plaintiff is able to produce the said document. It is not a fact that the defendant No. 1 did not insure his goods and the plaintiff without getting the insurance effected allowed defendant No. 1 to operate the loan account causing prejudice to defendant No. 2. " from evidence of P. W. 2, it is clear that in December, 1983 defendant No. 2 sent a letter to plaintiff revoking the guarantee which was marked as Ext. 38 subject to objection. In cross-examination to the suggestion about the existence of the goods. P. W. 2 stated :"i cannot say that since the goods have been lost plaintiff did not take custody of the same. Since I do not know whether the pledged goods are available or not I cannot say if the same could be made available to defendant No. 2 or the Court. " ( 6 ) MR. P. V. Ramdas is correct in his submission that with the materials available it may not be possible to give a clear finding that the goods hypothecated were lost on account of negligence of the plaintiff. Defendant No. 2 ought to have adduced better evidence either by examining witnesses or calling for the materials in possession of plaintiff to prove that the goods are not in existence and ought to have brought circumstances to record to draw an inference that the same is on account of negligence of the plaintiff. I have a feeling that the suit has been decided more on account of suppression of facts and circumstances than revelation of the same. Plaintiff being a statutory body constituted to carry on the welfare activity of the State in the field of banking should have revealed all documents to satisfy the Court that it has taken all possible steps to discharge its obligation both under fact and law.
Plaintiff being a statutory body constituted to carry on the welfare activity of the State in the field of banking should have revealed all documents to satisfy the Court that it has taken all possible steps to discharge its obligation both under fact and law. Defendant No. 2 may not be in a position to know whether the goods hypothecated were insured. If the goods were insured, plaintiff is supposed to have knowledge of the same. If there is no insurance, plaintiff could have explained the circumstances under which it did not insist upon the goods being insured and in case goods were not insured, it had no transaction without insurance. ( 7 ) THOUGH Mr. Ramdas, submitted that pledged goods are in possession of the creditor and as such the principle of pledged goods would not be attracted to hypothecated goods, legal position has now been made clear by the Division Bench of this Court reported in AIR 1986 Ori 247 , Bhabani Shankar Patra v. State Bank of India that the same principle is applicable in respect of the hypothecated goods. Therefore; statements of its witnesses that they do not know whether the goods hypothecated are in existence, since they are in control of the goods would not assist plaintiff. Since plaintiff is in control of the goods hypothecated, it has to explain the existence of goods and in case of any existence, circumstances under which they are not available for realisation of the dues from defendant No. 1. For this purpose inventory of hypothecated goods is necessary. Since onus is on defendant No. 2, it is his responsibility to get the inventory at his cost with assistance of the Court so that to that extent only his liability to the extent of goods lost, would stand discharged. ( 8 ) IN view of the aforesaid discussion, I am satisfied that for effective adjudication of the suit by revelation of materials and explanations of parties, the decree against defendant No. 2 is to be set aside and suit is to be remitted back. Both parties shall be given opportunity to adduce evidence in this respect. Defendant No. 2 shall deposit the cost on the basis of which a Commission shall be appointed to make inventory of the hypothecated goods. On the basis of materials available by applying the principles of Ss.
Both parties shall be given opportunity to adduce evidence in this respect. Defendant No. 2 shall deposit the cost on the basis of which a Commission shall be appointed to make inventory of the hypothecated goods. On the basis of materials available by applying the principles of Ss. 139 and 141 of the Indian Contract Act, trial Court shall decide the question of liability of defendant No. 2 afresh. Finding regarding liability of defendant No. 1 and finding that defendant No. 2 is the guarantor by execution of the documents stand confirmed and shall not any further be reopened. ( 9 ) IN result, appeal is allowed. Cost shall abide result. Appeal allowed. .