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2006 DIGILAW 684 (GAU)

Eastern Brick Industry v. State Bank of India

2006-07-27

AFTAB H.SAIKIA

body2006
JUDGMENT A.H. Saikia, J. 1. Heard Ms. U. Baruah, learned Counsel for the appellants as well as Mr. B. Kalita, learned Sr. counsel assisted by Mr. S. Dutta, learned Counsel appearing for the State Bank of India/Respondent. 2. The judgment and decree dated 16.02.1999, passed by the learned Civil Judge (Sr. Division), Jorhat in Title Appeal No. 20/97, by which the appeal preferred by the Bank/Respondent was allowed setting aside the judgment and decree dated 20.05.1997 rendered by the learned Civil Judge (Jr. Division) No. 2, Jorhat in T.S. No. 176/94 and the suit was decreed in favour of the plaintiff-Bank/respondent herein for Rs. 20,682.93 with costs of the suit and interest at the rate of Rs. 6% per annum from the date of filing the suit till realization of the decretal amount in full, jointly and severally against both the defendants/appellants herein, has been assailed in this Second appeal. 3. On 12.04.2000 at the time of admission of this appeal, the following substantial question of law were formulated: 1. Whether the suit for recovery of Rs. 20,682.93 alongwith interest and cost filed by the respondent/plaintiff against the appellant/defendant, is barred by limitation. 2. Whether the learned lower appellate Court is justified in holding that a further loan of Rs. 50000/- was sanctioned by the plaintiff/respondent on 20.04.1981, merely relying on Exhibit-8, the purported demand promissory note, without any other supporting document/evidence and, therefore, the said finding of the learned Court is perverse. 3. The learned lower appellate Court having held that the plaintiff has not produced any application of the defendant No. 2 for the second time loan and any sanctioning letter for the same and further holding that no valid equitable mortgage was created by the defendant in favour of the plaintiff, (sic) is justified in holding that the defendants took financial facility for Rs. 50,000/- for the second time from the plaintiff bank. Whether the learned lower appellate Court having held that no valid equitable mortgage was created by the defendants in favour of the plaintiff is justified in further holding that the property hypothecated in favour of the plaintiff bank is made charge-able for realization of the decretal amount. 4. 50,000/- for the second time from the plaintiff bank. Whether the learned lower appellate Court having held that no valid equitable mortgage was created by the defendants in favour of the plaintiff is justified in further holding that the property hypothecated in favour of the plaintiff bank is made charge-able for realization of the decretal amount. 4. At the time of hearing, the learned Counsel for the parties have fairly agreed that their argument would be confined only to substantial questions of law No. 1 and 2 as referred to above, as those would be suffice for determination of this Second Appeal. 5. The facts of the case in brief are that the appellant No. 2, being the proprietor of appellant No. 1, approached the Respondent-Bank for a loan to run his concerned business and the Respondent on 12.12.1977, on being satisfied, granted financial facilities to the extent of Rs. 50,000/- in the form of cash credit loan to the appellants. However, the appellants could not repay the entire outstanding amount as per terms and conditions of the loan granted on 12.12.1977 and accordingly a further request has been made to the Respondent for granting fresh loan of Rs. 50,000/- adjusting the outstanding amount against the previous loan. 6. On such request of the appellant No. 2, the Bank-Respondent on 20.04.1981 granted a fresh loan of Rs. 50,000/- on execution of fresh documents and paid Rs. 35,149.26 on 20.04.1981 by adjusting Rs. 14,850.74 and closed the previous loan account. The appellant No. 2 to secure the payment of the said fresh loan of Rs. 50,000/- above mentioned, executed a Demand Promissory Note dated 20.04.1981. The appellant No. 2 placed before the Bank/Respondent all relevant documents of title for creation of a equitable mortgage in favour of the Respondent/Bank. 7. Eventually the appellants failed to liquidate the loan amount as agreed upon which compelled the Bank/Respondent to file the instant suit being T.S. No. 176/94 before the learned Civil Judge (Junior Division) No. 1 at Jorhat. 8. The above suit was contested by the appellants admitting the previous loan of Rs. 50,000/- paid to them on 12.12.1977 but they denied the subsequent second loan of Rs. 50,000/- claimed to be paid by the Bank on 20.04.1981. 8. The above suit was contested by the appellants admitting the previous loan of Rs. 50,000/- paid to them on 12.12.1977 but they denied the subsequent second loan of Rs. 50,000/- claimed to be paid by the Bank on 20.04.1981. The appellants as defendants basically pleaded that the suit was barred by limitation and the statements and averments made in paragraphs 2 and 3 of the plaint did not make out the exact claims, if any of the Bank/Respondent against the appellants. They stoutly denied taking of a fresh loan on 20.04.1981 by executing fresh documents. 9. The learned trial Court, on consideration of the pleadings of the parties, framed as many as six issues which are as follows: 1) Whether the defendants availed financial facility from the plaintiff for running his business? 2) Whether there was any valid equitable mortgage? 3) Whether the suit is time barred? 4) Whether the amount claimed as inflated one? 5) Whether the defendants repaid the loan with all interest? 6) To what reliefs the parties are entitled? 10. The respondent adduced only one plaintiff witness at the time of hearing and exhibited as many as 50 numbers of documents when the appellant did not examine any one on consideration of the entire materials available on record. 11. The learned Civil Judge, on proper appreciation of the evidence on record and on close scrutiny of the relevant documents so exhibited before him as Exhibits, by his judgment and decree dated 20.05.1997, as already noted above, dismissed the suit preferred by the Bank/Respondent holding plaintiff that the suit was time barred. 12. Aggrieved, the Bank/Respondent preferred an appeal before the learned Civil Judge (Sr. Division) Jorhat through Title Appeal No. 20/97 as mentioned above and the learned Judge on perusal of the memo of appeal took up the following two points for decision of the appeal. (i) Whether the defendants availed financial facility of Rs. 50,000/- for the second time from the plaintiff Bank? (ii) Whether the suit is time barred? 13. Division) Jorhat through Title Appeal No. 20/97 as mentioned above and the learned Judge on perusal of the memo of appeal took up the following two points for decision of the appeal. (i) Whether the defendants availed financial facility of Rs. 50,000/- for the second time from the plaintiff Bank? (ii) Whether the suit is time barred? 13. The Appellate Court, on consideration of the entire facts and circumstances of the case including the evidences on record both oral and documentary, reversed the judgment and decree passed by the learned trial Court and allowed the appeal decreeing the suit in favour of the Bank/Respondent holding the point No. 1 so framed by him in favour of the Bank/Respondent when the point No. 2 was answered in negative. 14. Ms. Baruah, challenging the impugned judgment and decree, has forcefully contended that the entire findings of the appellate Court suffer from perversity. In support of her submission, she has straightly drawn attention of this Court to paragraph-3 of the plaint wherein it was stated by the Bank/Respondent as follows: That the defendant No. 1 could not repay the entire outstanding as per loan granted on 12.02.1977 and alternatively he requested and approached the plaintiff through Bank Branch at Borholla to grant a fresh loan of Rs. 50,000/- (Fifty thousand) adjusting the outstanding of the previous loan. The plaintiffs at such request granted a fresh loan of Rs. 50,000/- on 20.04.1981 on execution of fresh document and paid Rs. 35,149.26 paise on 20.04.1981 by adjusting Rs. 14,850.74 paise and closed the previous loan account. 15. Relying on the above paragraph, Ms. Baruah has submitted that by their own statement the Bank tried to make out a case that there were two loan accounts, i.e., one against the initial payment of Rs. 50,000/- on 12.12.1977 and the other, after the request of the appellant No. 2, was granted as a fresh loan of Rs. 50,000/- on 20.04.1981 treating the previous loan A/c as closed. She has asserted that the previous loan A/c at no point of time was closed as evident from the perusal of the loan record itself. She has contended to the extent that no fresh loan A/c against the alleged fresh loan of Rs. 50,000/- claimed to have been paid to her on 20.04.1981, was ever opened. She has asserted that the previous loan A/c at no point of time was closed as evident from the perusal of the loan record itself. She has contended to the extent that no fresh loan A/c against the alleged fresh loan of Rs. 50,000/- claimed to have been paid to her on 20.04.1981, was ever opened. In this factual backdrop, as pleaded by the Bank/Respondent, the learned Counsel has submitted that the learned Appellate Judge has arrived as a perverse finding to the effect that though the Judge accepted that the previous loan A/c was not closed in terms of paragraph-3 of the plaint, as evident from the Ext. 36 the statement of account. He relied solely on Ext.8, the Demand Promissory Note, executed by the appellant No. 2 on 20.04.1981 to hold that Ext.8 was sufficient to hold that the defendant No. 2 took financial facilities of Rs. 50,000/- from the second time from the Bank. 16. On the point of limitation, the learned Appellate Judge held that since the loan deposit of Rs. 10,000/- was made by defendant/appellants on 28.02.1989, as seen from Ext.36, the statement of account which the appellate failed to disprove, the suit filed by the Bank/Respondent on 28.01.1992 was within the period of limitation. 17. Mr. Kalita, defending the impugned judgment and decree, has argued that since admittedly the appellant took the Bank loan for the second time by executing Ext.8 the Demand Promissory Note for Rs. 50,000/- on 20.04.1981 and the same is being public money, there is no illegality or perversity in the findings of the appellate judgment and decree. His stand is that it is apparent on the face of the record that the appellant No. 2 on 12.12.1977 executed the (Ext.3) the Demand Promissory Note against payment of Rs. 50,000/- which was admittedly the first loan and to secure the second loan amount of Rs. 50,000/-, he signed the Demand Promissory Note on 20.04.1981 (Ext.8). 18. Having given my anxious consideration to the rival submissions advanced by the learned Counsel for the contesting parties and also on perusal of the materials available on record including Exhibits particularly the Ext. 3, the Demand Promissory Note executed on 12.12.1977 for the first loan, Ext.8 and Ext.36, it appears that the statements made in paragraph 3 did not tally with Ext. 36, the statement account. 3, the Demand Promissory Note executed on 12.12.1977 for the first loan, Ext.8 and Ext.36, it appears that the statements made in paragraph 3 did not tally with Ext. 36, the statement account. Firstly Ext.36, the statement of accounts of C/C No. 7 does not indicate the closure of the said A/c, being the previous loan account on payment of 50,000/- which was paid to the appellant as fresh loan on 20.04.1981. The exhibit shows that it was opened on 12.12.1977 and on 20.04.1981 the balance was shown therein to be Rs. 35,149.26 but there was no such entry found anywhere showing the adjustment of Rs. 14,850.74 as pleaded by the Bank. 19. More shockingly, the fresh loan amount of Rs. 50,000/- so claimed by the Bank/Respondent to have been paid to the appellant was not shown anywhere in Ext.36. Even records including the documents so exhibited before the learned trial Court do not reveal that any fresh A/c was opened against the fresh loan paid to the appellant on 20.04.1981. Exhibits also do not disclose that any request was ever made by the appellant No. 2 for a fresh loan so as to accommodate the Bank to close the previous loan and to open a new account. 20. Therefore on meticulous perusal of the record, it manifestly appears that the averments made in paragraph 3 of the plaint did not project any specific claim of payment of Rs. 50,000/- on 20.04.1981 as fresh loan. 21. It is established that the High Court while exercising its power under Section 100 CPC on appreciation of evidence cannot set aside the findings of fact recorded by the First Appellate Court which reversed the findings of the trial Court. However, if the High Court comes to the conclusion that findings recorded by the first appellate Court were perverse i.e., based on misreading of evidence and based on no evidence, interference with such findings of fact of the First Appellate Court is permissible. (See Manicka Poosali v. Anjalai Ammal reported in AIR 2005 SC 1777 ). In the instant case, the learned Appellate Court below misread the entire evidence on record including the evidence as reflected in Ext. 36 in regard to payment of Rs. 50,000/- as a fresh loan by the Bank to the appellants. 22. Now the moot question that has arisen to note is where the amount of Rs. In the instant case, the learned Appellate Court below misread the entire evidence on record including the evidence as reflected in Ext. 36 in regard to payment of Rs. 50,000/- as a fresh loan by the Bank to the appellants. 22. Now the moot question that has arisen to note is where the amount of Rs. 50,000/- as reflected from the Ext.8, being the public money, has gone. 23. Mr. Kalita, on pointed query, has failed to satisfy the Court as to where the said amount was deposited as the record was silent in that aspect. It is essential in the banking law that every deposit or withdrawal must be either credited or debited against the account to which such deposit or withdrawal has been made. But in the instant case, Rs. 50,000/- paid to the appellant No. 2 on the basis of the Demand Promissory Note Ext.8 signed on 20.04.1981 was not shown to be deposited anywhere and not to speak of in Ext. 36. Therefore, the entire transaction as regards payment of Rs. 50,000/- on 20.04.1981 smacks of suspicion. Hence, it is the duty of the Bank authority to make a thorough enquiry by looking into the matter seriously and if any irregularity or illegality is found, necessary steps be taken against those responsible. Since there is an involvement of public money, the Bank is directed to do the needful as observed. 24. In view of the above discussions, observations and on perusal of the impugned appellate judgment and decree, this Court is of the view that the finding arrived at by the learned Appellate Court to the effect that Ext.8 was sufficient to hold that the defendant took financial facilities of Rs. 50,000/- for the second time from the plaintiff/Bank, is wholly perverse. 25. However, coming to the point of limitation, this Court is in full agreement with the finding of the appellate Court that the suit was within the limitation period because Ext.36 itself shows that on 28.02.1989 there was a cash deposit of Rs. 10,000/- in the A/c i.e., C/C No. 7 and the same could not be disproved by the appellants. Taking into account the loan deposit on 28.02.1989 and keeping in view the date of filing the suit on 28.01.1992, this Court has no hesitation to say that the suit was filed within the limitation period. 26. 10,000/- in the A/c i.e., C/C No. 7 and the same could not be disproved by the appellants. Taking into account the loan deposit on 28.02.1989 and keeping in view the date of filing the suit on 28.01.1992, this Court has no hesitation to say that the suit was filed within the limitation period. 26. The substantial questions of law so pressed into service by the learned Counsel for the parties as mentioned above, are answered accordingly. 27. Consequently, the Court does hold that the impugned appellate judgment and decree deserves interference and accordingly the same stands set aside and quashed. 28. The judgment and decree passed by the learned trial Court dismissing the T.S. No. 173/94 is hereby restored. In the result, this Second Appeal succeeds and stands allowed. No costs. Appeal allowed.