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1996 DIGILAW 325 (DEL)

ALLAHBAD BANK v. RUPA BHAGAL

1996-04-01

body1996
LOKESHWAR PRASAD ( 1 ) THE plaintiff Bank has filed the present suit for the recovery of Rs 7,98,806. 55 against the defendants. The case of the plaintiff Bank is that till October, 1989 the United Industrial Bank Limited, having its Registered Office at 7, Red Cross Place, Calcutta and amongst others a Branch Office at 29, Regal Building, Connaught Circus, New Delhi, was working in private sector. Vide notification No. 17/2/89 - B. O. III (ii) issued by the Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division) New Delhi published in the Gazette of India (Extraordinary) dated the 30th October. 1989. the above said Bank stood amalgamated into Allahbad Bank, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970, having its Head Office at 2. Netaji Subhash Road, Calcutta. As a result of amalgamation the Branch Office, situated at 29, Regal Building, Connaught Place of the United Industrial Bank Limited started functioning as one of the branches of the plaintiff Bank 1. 2 Defendant No. 1, while working in the name and style of M/s Swadeshi Containers, it is alleged. approached and requested the erstwhile Branch Office of the United Industrial Bank Limited at 29, Regal Building, Connaught Circus, New Delhi to grant a cash Credit Hypothecation Limit to the extent of Rr 1 lac and Bill Discounting Facility to the extent of Rs 150 lacs The above request of defendant No. I was considered by the then United Industrial Bank Limited and that Bank sanctioned and granted a cash credit hypothecation limit to the extent of Rs 1 lac and a Bill Discounting Facility to the extent of Rs 1. 50 lacs in, the name of M/s Swadeshi Containers, of which defendant No. 1 is alleged to be the sole proprietor. 1. 3 In consideration of the grant of the above facility. defendant No. 1 executed and delivered demand Promissory note dated the 6th June, 1985 for Rs 2,50,000. 00 in favour of the United Industrial Bank Limited in his capacity as sole proprietor of M/s Swadeshi Containers, thereby hypothecating the entire stock of container sheets. paints, drums, finished and semi-finished goods and the entire raw material as security for the due re-payment of loan amount together with cost and interest. 1. 4 Besides creating security by way of hypothecating the goods as mentioned above, defendant No. 1. paints, drums, finished and semi-finished goods and the entire raw material as security for the due re-payment of loan amount together with cost and interest. 1. 4 Besides creating security by way of hypothecating the goods as mentioned above, defendant No. 1. also offerred the personal guarantees of Shri Sham Lal Bhagat. father of defendant No. 2 and said Shri Sham Lal Bhagat in his capacity as surely executed and delivered the letters of guarantee dated 7. 6. 85 thereby making himself personally liable for any amount which may be found due at any time from defendant No. 1 i. e. the sole proprietor of M/s Swadeshi Containers to the plaintiff Bank. 1. 5 Said Shri Sham Lal Bhagal. the father of defendant No. 2 is reported to have expired leaving behind defendant No. 2 as one of his legal heirs who has inherited the estate of said Shri Sham Lal Bhagat after his death. It is averred the sall the legal representatives/heirs of said Shri Sham Lal Bhagat including defendant No. 2 are liable to the plaintiff Bank and right to sue survieves against them and in favour of the plaintiff Bank. 1. 6 As agreed between the parties the interest was payable @ 8. 5% over and above the Reserve Bank of India rate subject to a minimum of 17. 5% per annum with quarterly rests or such other rate which the plaintiff bank or its predecessor i. e. United Industrial Bank Limited could decide depending upon the Reserve Bank of India rate and the present rate of interest is 20. 75% per annum with quarterly rests. 1. 7 It is alleged that defendant No. 1 in his capacity as sole proprietor of M/s Swadeshi Containers availed of the above said facilities from the erstwhile United Industrial Bank Limited. It is further alleged that defendant No. 1 failed to adhere to the terms and conditions so agreed as a result of which the account became irregular and sticky and started showing debt balance on account of non-payment of the bills discounted by the plaintiff Bank. The defendants failed to regularise the account despite repeated requests made by the plaintiff Bank. The plaintiff Bank served a legal notice through its Advocate but the defendants failed to pay the amount due and payable to the plaintiff Bank and hence the suit. 1. The defendants failed to regularise the account despite repeated requests made by the plaintiff Bank. The plaintiff Bank served a legal notice through its Advocate but the defendants failed to pay the amount due and payable to the plaintiff Bank and hence the suit. 1. 8 It has been prayed by the plaintiff Bank that a joint and several decree for a sum of Rs 7,98,806. 55 with costs and pendentelite and future interest @ 20. 75% per annum with quarterly rests be passed in favour of the plaintiff Bank and against the defendants and that it be ordered and decreed that the hypothecated goods (finished, semi-finished, raw material etc.) be sold and net sale proceeds be appropriated towards the decreetal amount and in case the net sale proceeds are found insufficient, it be ordered that the defendants shall remain personally liable for the balance amount. ( 2 ) AS the defendants absented without any reasonable cause despite service, the learned predecessor of this Court vide order dated 18. 10. 94 proceeded ex- parte against the defendants in the present proceedings. ( 3 ) THE plaintiff Bank has adduced the evidence by w ay of affidavits in support of its case and has filed the affidavits of Shri Subhasish Mukerji. the then Branch Manager of the plaintiff Bank. Shri S. K. Chavan, Manager of the Connaught Circus Branch of the plaintiff Bank, Shri Amrit Kumar another Officer of the plaintiff Bank and Shri Rajiv Chaturvedi an Officer of (he plaintiff Bank working in the Branch of the plaintiffbank at 29. Regal Building. Connaught Circus during the relevant period. All the above mentioned officers of the plaintiff Bank have supported the case of the plaintiff and proved the documents on record. ( 4 ) ON a consideration of the pleadings, as contained in the plaint and the evidence adduced by the plaintiff Bank by means of affidavits of S/shri Subhasish Mukerji. S. K Chavan, Amril kaur and Rajiv Chaturvedi and the documents proved on record I am satisfied that defendant No. I in his capacity as sole proprietor of M/s Swadeshi Containers availed of cash credit hypothecation limit to the extent of Rs 1 lac and a Bill Discounting Facility to the extent of Rs 1. 50 lacs in the name of M/s Swadeshi Containers from erstwhile United Industrial Bank Limited. 29, Regal Building, Connaught Circus. 50 lacs in the name of M/s Swadeshi Containers from erstwhile United Industrial Bank Limited. 29, Regal Building, Connaught Circus. New Delhi and that the above said Bank was amalgamated into Allahbad Bank vide notification issued by the Government of India. Ministry of Finance. Department of Economic Affairs (Banking Division) New Delhi published in the Gazette of India (Extraordinary) dated the 30th October. 1989 as a result of which all rights, powers, claims. demands, interest, authorities, privileges, benefits, assets and properties both moveable and immoveable of United Industrial Bank Limited stood transferred to and became the assets and liabilities of AIlahbad Bank. It is further proved that the amount stated to be due and pay able, is due and payable to the plaintiff Bank by the defendants. Defendant No. 2 who has executed and delivered a fresh letter of guarantee dated the 28th May, 1988 is also jointly and severally liable for the payment of the amount due and pay able to the plaintiff Bank by the defendants. The evidence- adduced by the plaintiff Bank, by means of affidavits of its Officers. has gone on record and unrebutted and unchallenged and 1 sec no reason to disbelieve the same. Therefore, 1 am of the opinion that the case of the plaintiff Bank stands established on record. ( 5 ) IN the result an ex-parte decree in the sum of Rs. 7,98,806. 55 (Rs. Seven lacs ninety eight thousand and eight hundred six and paise fifty only) with costs is passed in favour of the plaintiff Bank and against the defendants. The liability of the defendants shall be joint and several. It is further ordered that the plaintiff Bank is also be entitled to pendentelite and future interest @ 15% per annum on the decretal amount from, the date of the filing of the suit till realisation. As regards the hypothecated goods the plaintiff Bank may make the prayer for the sale of the hypothecated goods, if need arises, while seeking the execution of the decree. Decree sheet be drawn up accordingly and thereafter the file be consigned to record room.