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2002 DIGILAW 1197 (DEL)

CANARA BANK v. SATISH C. BHASIN

2002-08-16

S.MUKERJEE

body2002
S. MUKERJEE ( 1 ). This civil suit has been instituted by Canara bank for recovery of Rs. 5,39,828. 32/- due cumulatively on account of cash credit extended in 1978 as well as overdraft limit of Rs. 2,22,000 and thereby encashed bank guarantee amount. ( 2 ). In the written statement, the defendant took the stand that they have availed only overdraft facility, and that the defendant allegedly was not party either to open cash credit or bank guarantee facilities. ( 3 ). It was also contended by the defendant that blank papers were got signed from them by the bank, and further that they never agreed to pay interest. ( 4 ). As regards the first contention, it is noted that at pages 54 and 55 of the record, that there are clear-cut pleadings which establish that there is no effective denial that defendants have availed open cash credit facility. It is also established from the record that the defendants were not in a position to seriously dispute the issuance of the bank guarantee at their instance, encashment proceeds whereof are part of the suit amount. ( 5 ). In view of the above, subsequently the defence itself was diluted by defendant taking the stand that the overdrafts had been availed against fixed deposit amounts, and claiming on that basis that after encashing of the said fixed deposit amounts, nothing remained due. ( 6 ). As regards the bank guarantee, the diluted defence became that the bank guarantee had allegedly expired, and therefore there could be no occasion for invocation of the same. ( 7 ). The following issues were framed:- 1. Whether the suit has been properly stamped regarding court fees? 2. Whether M/s Dalmia Dairy Industries and M/s Dalmia Udyog are necessary parties to the suit? 3. Whether the suit is liable to be stayed till the final adjudication of the previously instituted Suit No. 1030/81-Dalmia dairy Industries Vs. Bhasin Sons pending in the Court of Shri J. B. Goel, Addl. Distt. Judge, Delhi? 4. Whether the plaint has been signed and verified and the suit instituted by a duly authorised person. ? 5. To what amount is the plaintiff entitled on account of Open Cash Credit account, Cash Credit and over Drafts? 6. Whether the guarantees in question were extended by the defendants? If not, to what effect? 7. Distt. Judge, Delhi? 4. Whether the plaint has been signed and verified and the suit instituted by a duly authorised person. ? 5. To what amount is the plaintiff entitled on account of Open Cash Credit account, Cash Credit and over Drafts? 6. Whether the guarantees in question were extended by the defendants? If not, to what effect? 7. Whether the plaintiff was entitled to pay the guaranteed amounts to M/s. Dalmia Dairy Industries and M/s. Delmia udyog without consultation and approval of defendants No. 1 and 2? 8. Whether any amounts under the guarantees were paid by the plaintiff to M/s dalmia Dairy Industries and M/s. Dalmia udyog? If so, whether the plaintiff is entitled to recover those amounts from defendants No. 1 to 2? 9. Relief. ( 8 ). The parties adduced their respective evidence in the matter. On behalf of the bank there were two witnesses PW1 and PW2 who by their deposition, duly established the claim of the bank. The defendants had only one witness viz. defendant No. 1, who deposed in relation to the defence of the defendants. ( 9 ). The defendant No. 3 however did not step in the witness box. ( 10 ). The matter came for hearing in the category of finals on 11. 7. 2002, on which date Mr. S. R. Yadav alongwith Ms. Shivani Yadav appeared for the plaintiff bank and opened the case. The defendant s counsel was awaited even upto 3. 30 P. M. , there was no appearance on behalf of the defendants. The arguments of learned counsel for the plaintiff were accordingly heard and judgment was reserved. ( 11 ). The findings of the various issues are as under:- issue NO. 1:- Learned counsel for the plaintiff has pointed out that proper and advalorem fee has been fixed on the suit amount. There is no contention to the contrary either by way of any submission being made to that effect, or anything in the deposition of the sole witness of the defendants to the contrary. This issue is accordingly decided in favour of the plaintiff. ISSUE N0. 2:- M/s. Dalmia Dairy Industries and M/s Dalmia udyog were the beneficiaries under the guarantee who had invoked the same, and the out- payment to them under the bank guarantees, had contributed to the suit amount being claimed by the plaintiff bank. This issue is accordingly decided in favour of the plaintiff. ISSUE N0. 2:- M/s. Dalmia Dairy Industries and M/s Dalmia udyog were the beneficiaries under the guarantee who had invoked the same, and the out- payment to them under the bank guarantees, had contributed to the suit amount being claimed by the plaintiff bank. There is no requirement in law that such-like parties should be impleaded as defendants in a bank suit. In any case, when defendants sole witness appeared in the witness box, he has made no averment in support of the contention of the defendant on this aspect. Resultantly this issue is also decided in favour of the plaintiff by holding that M/s. Dalmia Dairy industries and M/s. Dalmia Udyog are not necessary parties to the suit. ISSUE NO. 3:- Both by way of lacuna in testimony of the sole witness for the defendants, and in the absence of any arguments at the final hearing stage, the defendants have not brought out anything which warrants the stay of proceedings, or the awaiting of final adjudication of Suit no. 1030/91 between M/s Dalmia Dairy Industries and Bhasin sons, stated to be pending in the Court of Additional district Judge, Delhi. ( 12 ). Morever the requirements of law for stay of suit, are not satisfied. ( 13 ). In these circumstances this issue is decided in favour of the plaintiff by holding that the suit is not liable to be stayed. ISSUE NO. 4:- The witnesses of PW_______ the bank have proved the authority of the official who had signed and verified the plaint. In any case, and even otherwise in terms of the judgment of the Apex Court, bank suits are not to be thrown out on such technicalities. As a result, this issue is also decided in favour of the bank and against the defendants by holding that the suit is properly instituted. ISSUE NO. 7:- It is settled law that a bank guarantee constitutes en independent contract between the bank and the beneficiary, and payment is to be released, on proper invocation of the bank guarantee, without any recourse to the party at whose instance the bank guarantee has been established. Accordingly it is decided that the plaintiff bank was entitled to pay the guarantee amounts to m/s. Dalmia Dairy Industries and M/s. Dalmia Udyog, without any consultation or approval of defendants 1 and 2. Accordingly it is decided that the plaintiff bank was entitled to pay the guarantee amounts to m/s. Dalmia Dairy Industries and M/s. Dalmia Udyog, without any consultation or approval of defendants 1 and 2. This issue is also decided in favour of the plaintiff. ISSUED Nos. 5. 6 and 9:- The witness appearing on behalf of the bank, PW_____ has categorically proved the statement of account, which is Exhibit _____. It is also established on record that the defendants have availed overdraft facility in addition to open credit and bank guarantee. The defence of the defendants viz. that bank guarantee had allegedly expired, is belied by the fact that vide pay order dated 21. 7. 1980, the payment under the bank guarantees had been duly remitted to the beneficiaries, which fact standing by itself, warranted corresponding debit and liability of the defendants herein. Moreover while open credit had been attempted to be denied, but from the tenor of the averments made in the pleadings of the defendants itself and also from the cross examination on this aspect, it stands established that there is no substance in the said defence. ( 14 ). In any case, when defendants sole witness appeared in the witness box, he has made no averment in support of the contention of the defendant on this aspect, and therefore the bald pleadings, in the absence of credible evidence, will be of no consequence. ( 15 ). As regards the contention of the defendants that the overdraft had been availed against fixed deposits, and there had to be interest adjustments to the extent only of 2%, differential payments to be made by the defendants to plaintiff, after adjustment of the fixed deposit amount, it is found that there is no cross- examination at all on this aspect, and as such the defendants having not complied with the basic requirement of law of confronting the plaintiff witness with their case on this aspect, resultantly the defendants have to fail. It may also be noted that in the deposition of the sole witness of the defendants, there is no effective establishing of the challenge on this aspect of the defence. ( 16 ). It may also be noted that in the deposition of the sole witness of the defendants, there is no effective establishing of the challenge on this aspect of the defence. ( 16 ). In view of the above, since the defendants have not been able to adduce any credible or reliable evidence on their defence as referred to above, while the plaintiff bank has duly proved the factum of the loan and facilities, and in particular also statement of account and the outstandings payable by the defendants, as such these issues are decided in favour of the plaintiff bank and against the defendants. ( 17 ). The plaintiff bank has claimed interest @ 21. 5% from the date of institution of the suit as pendente lite interest and future interest at same rate, till realisation of the decretal amount. Though this interest is the rate applicable to commercial transaction, however in the facts and circumstances of the present case, I direct that interest be paid @ 18% p. a. from the date of institution of the suit till the decree. In case the entire suit amount is paid within a period of four months from the date of this decree, then the computation of pendente lite and future interest will be @ 9% p. a. instead of 18% p. a. . ( 18 ). The plaintiff bank will also be entitled to its costs. ( 19 ). In view of the above, the suit of the plaintiff is decreed with costs and pendente lite and future interest as detailed above.