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Rajasthan High Court · body

2000 DIGILAW 1209 (RAJ)

Ajeet and Co. v. Bank of Baroda

2000-09-25

V.S.KOKJE

body2000
JUDGMENT 1. - This is a defendants' appeal challenging the decree passed against them and in favour of plaintiff-respondent-Bank of Baroda. The appellants had applied for loan which was sanctioned and disbursed by the respondent-Bank on 27.4.1978. Cash Credit limit of Rs. 1 lac and revolving of letter of undertaking facility worth Rs. 90,000/- was applied for by the appellants which was sanctioned by the respondent-Bank on 2.8.1978. Appellant No. 2 mortgaged certain property by way of security towards this loan. The appellants could not avail of the loan facility granted to them, for certain reasons and continued the security for future loan to he granted by the Bank. On 6.6.1980, the defendants again applied for Cash Credit and Pledge facility worth Rs. 1 lac which was sanctioned on the same day. formal documents were also executed in support of this transaction. Under the financial assistance arrangement, Rs. 60,000/- were allotted for cash credit pledge limit and Rs.40,000/- were earmarked for cash credit hypothecation limit. By a deed dated 8.5.1981, the entire stock and movable properties were hypothecated in favour of t he Bank. On 24.2.1984, the appellants took possession of the hypothecated goods against payment of Rs. 13,000/- and ultimately, a sum of Rs. 52,292.65 as found due and demanded by the respondent-Bank from the appellants through a notice sent through a lawyer on 6.1.1984. When the payment was not made, the suit was filed. In the written statement, the appellants raised various objections including technical objections. 2. On the basis of pleadings, seven issues were framed. Freely translated from Hindi, the Issues read as under: (1) Whether the signatory of the plaint Vijay Bajirao More was authorised on behalf of the Bank to file the suit; (2) Whether defendants had mortgaged the shop and a room described in Para No. 3 of the plaint for availing facilities stated in paras 3 & 1 of the plaint? (3) Whether the defendants executed a Promissory Note in favour of the plaintiff-Bank accepting the liability to pay interest and pledge the stock of tractors and other goods, as stated in para 7 of the plaint? (4) Whether thereafter, the defendants executed a pronote in favour of the plaintiff-Bank and pledged the goods with the plaintiff as described in paragraph 9 of the plaint? (5) Whether Rs. (4) Whether thereafter, the defendants executed a pronote in favour of the plaintiff-Bank and pledged the goods with the plaintiff as described in paragraph 9 of the plaint? (5) Whether Rs. 52,295.65 are due and recoverable from the defendants by the plaintiff and whether the plaintiff-Bank was entitled to recover this amount by auctioning the goods as sought in the relief clause of the plaint? (6) Whether the plaintiff-Bank had terminated the facilities given to the defendants without any reason and without any prior notice and for this reason, the plaintiff-Bank is not entitled to interest from 17.8.1982 and is not entitled to recover costs of the suit from the defendants? (7) Whether the plaintiff-Bank has claimed against the contract, amounts to which the Bank is not entitled as stated in Para 29 of the written statement; and (8) Relief. 3. The trial Court decided issue Nos. 1, 2, 3, 4 & 5 in favour of the plaintiff. Issue Nos. 6 and 7, burden to prove which, was on the defendants, were also decided against the defendants. The suit was decreed and it was declared that the plaintiff-Bank was entitled to recover Rs. 52,292.65 jointly and severally from the defendants. It was also directed that the mortgaged property will be sold in execution of the decree first and if the loan amount is not recovered from the sale of the property, than the balance will be recoverable from the defendants. Interest at the rate of 8% per annum was awarded on the amount of Rs. 52,292.65 from the date of the institution of the suit till the date of recovery. 4. At the hearing of this appeal, learned counsel for the defendant-appellants did not challenge and specifically gave up challenge to the findings on Issue Nos. 1, 2, 3, 1 & 5. The challenge was only limited to the findings on Issue Nos. 6 & 7 and award of interest. 5. learned counsel for the appellant contended that the loan facilities granted to the defendant were unreasonably terminated in breach of the contract and without prior notice. It was further contended that because of this breach of the contract, the appellants suffered losses and for this reason, the plaintiff should not he awarded any interest on the principal sum. 5. learned counsel for the appellant contended that the loan facilities granted to the defendant were unreasonably terminated in breach of the contract and without prior notice. It was further contended that because of this breach of the contract, the appellants suffered losses and for this reason, the plaintiff should not he awarded any interest on the principal sum. It was also contended that special COSts should have been awarded to the appellants by the trial Court as they had suffered losses because of breach of contract. It was also contended that the conveyance charges, incidental charges etc. could not have been charged by the Rank under the contract and these amounts deserve to be deducted from the claim amount. 6. It was contended on behalf of the respondent-Bank that the trial Court has rightly held that the loan facility was terminated for good reasons and it was done after a prior notice dated 6.1.1984. It is also contended that no amount which is not allowed by the contract, was charged by the Bank. 7. On perusal of the record, it is clear that the loan facility was terminated when the appellant-defendants failed to perform their part of the contract by making payments due under the contract. This was done after proper and prior notice. The trial Court has discussed the material on record in this respect and has one to a correct conclusion. I do not find any force in the contentions raised by the learned counsel for the appellants. All the issues have been correctly decided against the defendants. 'There is no reason why the plaintiff-Bank should have been deprived of interest at the contracted rate. The trial Court has been quite reasonable in directing that the interest on the suit amount would he payable at the rate of 8% per annum from the date of the filing of the suit till the date of the recovery. 8. I find no force in this appeal. It is hereby dismissed. There shall be no order as the costs.Appeal rejected. *******