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Madhya Pradesh High Court · body

2008 DIGILAW 21 (MP)

KALINIDI MOHAN v. BANK OF MAHARASHTRA

2008-01-07

ARUN MISHRA, SANJAY YADAV

body2008
Judgment Sanjay Yadav, J. ( 1. ) The appellant, borrower, being aggrieved of the judgment and decree dated 18.11.97 passed by the District Judge, Balaghat in C. S. No. 16-B/91 has preferred .the present appeal. The learned District Judge vide impugned judgment has decreed the suit preferred by the respondent No.l, Bank of Maharashtra for recovery of Rs.14,47,000/- along with interest @ 20% per annum and cost. ( 2. ) The facts giving rise to filing of the suit for recovery and the judgment and decree thereof are that the Appellant and Dadulal Pariwal and Brijrani Pariwal for constructing Savita Talkies in Waraseoni were granted loan facilities in the nature of term loan, dash credit facility and the over draft facility. The various amounts which were advanced towards aforesaid loan facilities were the term loan of Rs.4,00,000/-(Four lacs) on 25.6.82, cash credit facility of Rs.1,18,000/- on 16.7.86, working capital by way of over draft facility of Rs.60,000/- on 11.10.86 and Rs.25,000/- on 11.10.88. In order to avail aforesaid loan facilities the appellant and other partners, viz, Dadulal Pariwal and Brijrani Pariwal executed various security documents, viz, the demand promissory note dated 5.12.85, 16.7.86 and 11.10.88 and term loan agreement dated 5.12.85,16.7.86 and 11.10.88 hypothecation of plant and machinery dated 5.12.85, 16.7.86 and 11-1Q-88 letter of guarantee dated 5.12.85 and 16.7.86. Besides the aforesaid security documents, the appellant and -his aforesaid partners created an equitable mortgage by deposit of the title deeds of their immovable properties situated in village Wara, Tehsil Waraseoni District Bakghat bearing Khasara No. 730/2, 731/1,1047/1,1049/2,1049/4, 1049/ 6,1049/6,1057/3, 1052/5 admeasuring 2.41 acres and the land situated in Sikendra Tehsil Waraseoni District Balaghat bearing Khasara No. 285/2(cha) admeasuring 3054 sq. ft. That during the subsistence of the aforesaid loan facilities the two partners viz, Dadulal Pariwal and Brijrani Pariwal died, thus, leaving the appellant to be the sole proprietor of the Savita Talkies, wherefor the aforesaid loan facilities were availed. That subsequent to the death of the aforesaid partners, Surajlal Bisen and Ramchand, respondent Nos.2 and 3 executed the letters of guarantee dt. 11-10-88 in respect of the aforesaid loan facilities, thereby guaranting the due repayment of the amount due in respective accounts along with interest thereon. The appellant acknowledged his liability to repay the loan amount along with interest by executing the letter of acknowledgment on 11-10-88. ( 3. 11-10-88 in respect of the aforesaid loan facilities, thereby guaranting the due repayment of the amount due in respective accounts along with interest thereon. The appellant acknowledged his liability to repay the loan amount along with interest by executing the letter of acknowledgment on 11-10-88. ( 3. ) That various loan facilities though were availed of by the appellant but there was default in repayment resulting in the amount due, to the extent of Rs. 14,47,000/- as on 10.10.91 when the suit was filed by the respondent Bank for its recovery and for sale of the immovable property mortgaged. The appellant/defendant No. 1 denied his liability and prayed for the dismissal of suit on the ground that the suit was hot maintainable because of the mis-joinder and was not properly constituted and that the suit was time barred. It was further averred that since the Bank has failed to provide the working capital in time the same resulted in delayed fructification of the venture and therefore was not able to make payment within time. The trial Court having considered the material evidence on record decreed the suit for recovery of Rs. 14,47,000/- alongwith interest @ 20% per annum and for the property. ( 4. ) Challenge is putforth by the appellant on the following counts:- (i) That the statement of A/c was not maintained in accordance with the provisions contained in the Bankers Books evidence and in absence of the same the suit ought not to have been decreed ; (ii) That the plaint was not verified by the competent person as such the same ought to have been rejected; (iii) That the interest charged was exhorbitant contrary to term of contract, and (iv) That there was mis-joinder of parties so much so that though the loan facilities were tendered to a partnership firm but the suit was brought against individual, the appellant treating him to be the sole proprietor. ( 5. ) In furtherance, of his submission the learned counsel for the appellant has taken us through the evidence on record. It is pointed out by the learned counsel for the appellant, while placing reliance on the statement of appellant/claimant, Ex.D/2, that the plaintiff Bank being under an obligation to maintain the account in accordance with the Bankers Books evidence Act has failed to prove that the account was maintained as per the stated. It is pointed out by the learned counsel for the appellant, while placing reliance on the statement of appellant/claimant, Ex.D/2, that the plaintiff Bank being under an obligation to maintain the account in accordance with the Bankers Books evidence Act has failed to prove that the account was maintained as per the stated. It is further submitted that though the agreed rate of interest was 16.5% per annum plus the penal interest of 2% but the rate of interest charged and granted by the Court below @ 20% per annum was exhorbitant and contrary to the term of agreement. Furthermore, it is urged that the plaint was not verified by the competent person as such there was no proper institution of a suit. In respect of the mis-joinder, it is submitted on behalf of the appellant, that the loan was sanctioned in favour of a partnership firm whereas the suit was filed against the appellant individual styled as the proprietor of a firm. ( 6. ) We gave our anxious considerations to the submissions made on behalf of the appellant and have perused the record. ( 7. ) In respect of the submissions regarding the verification of the plaint by incompetent person we observe from paragraph 37 of the impugned judgment the appellant/plaintiff did not pursue the same, and rightly so in view of Ex.P/40 being the General Power of Attorney dated 12.4.88 in favour of Shri Anil Yashwant Paranjape, an officer who verified the plaint. The trial Court recorded a finding that because of non-pressing of the aforesaid question by the appellant on 28.7.93 no issue was framed. It is therefore, now not open to the appellant/plaintiff to raise the issue at appellate stage, the contentions therefore pertaining to verification is accordingly rejected. ( 8. The trial Court recorded a finding that because of non-pressing of the aforesaid question by the appellant on 28.7.93 no issue was framed. It is therefore, now not open to the appellant/plaintiff to raise the issue at appellate stage, the contentions therefore pertaining to verification is accordingly rejected. ( 8. ) Now coming to the contentions pertaining to maintenance of statement of A/c. Section 2 (8) of Bankers Books evidence Act 1891 (hereinafter referred to as the "act") defines "certified copy" to mean when the books of a bank-, "(a) are maintained in written form, a copy of any entry in such books together with a certificate written at the foot of such copy that it is a true copy of such entry, that such entry is contained in one of the ordinary books of the bank and was made in the usual and ordinary course of business and that such book is still in the custody of the bank, and where the copy was obtained by a mechanical or other process which in itself ensured the accuracy of the copy, a further certificate to that effect, but where the book from which such copy was prepared has been destroyed in the usual course of the banks business after the date on which the copy had been so prepared, a further certificate to that effect, each such certificate being dated and subscribed by the principal accountant or manager of the bank with his name and official title; and (b) consists of printouts of data stored in a floppy, disc, tape or any other electromagnetic data storage device, a printout of such entry or a copy of such printout together with such statements certified in accordance with the provisions of section-2A. (c) a printout of any entry in the books of a bank stored in a micro film, magnetic tape or in any other form of mechanical or other process which in itself ensures the accuracy of such printout as a copy of such entry and such printout contains the certificate in accordance with the provisions of section 2A." ( 9. ) Furthermore, Section 4 of the Act of 1891 stipulates the mode of prove of entries in Bankers Books. It is provided that :- "4. ) Furthermore, Section 4 of the Act of 1891 stipulates the mode of prove of entries in Bankers Books. It is provided that :- "4. Mode of proof of entries in bankers books:- Subject to the provisions of tins Act, a certified copy of any entry in a bankers book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as the original entry itself is now by law admissible, but not further or otherwise." In the instance case PW-l Manager of Bank of Maharashtra Branch Waraseoni has proved the statement of account Ex.P/18, Ex.P/19 and Ex.P/20 in respect of the aforesaid loan facilities and the transactions effected therein. The evidence of PW-1, in respect of maintenance of statement of A/c, thus, leaves no iota of doubt that the statement of account and entries therein are proved as provided under the provisions of Bankers Books 1891. Though, this witness was extensively cross examined by the appellant/defendant however, nothing could be extracted to create doubt in respect of maintenance of account as provided under the Act of 1891. Nothing irregular has been shown by the appellant that the loan A/cs were not maintained properly in accordance with the provisions contained in the Act, 1891, no evidence to that effect has been led, we therefore, do not find any discrepancy in respect of the maintenance of the account. ( 10. ) The next question which crops for consideration is whether the plaint was properly constituted. We noted the contention of the appellant/defendant that the loan facilities were extended to a partnership firm. It is not in dispute that during the subsistence of the aforesaid loans, the two partners Dadulal Pariwal and Brijrani Pariwal died leaving defendant alone as the sole owner of the business/Savita Talkies. Order 30 Rule 4(1) of the CPC stipulates:- "4. We noted the contention of the appellant/defendant that the loan facilities were extended to a partnership firm. It is not in dispute that during the subsistence of the aforesaid loans, the two partners Dadulal Pariwal and Brijrani Pariwal died leaving defendant alone as the sole owner of the business/Savita Talkies. Order 30 Rule 4(1) of the CPC stipulates:- "4. Rights of suit on death of partners- (1) Notwithstanding anything contained in Section 45 of the Indian Contract Act, 1872 (9 of 1872) where two or more persons may sue or be sued in the name of a firm under the foregoing provisions and any of such persons dies, whether before the institution or during the pendency of any suit, it shall not be necessary to join the legal representative of the deceased as a party to the suit. Thus, an exceptions is carved out by aforesaid provision to Section 45 of the Contract Act. ( 11. ) In the case of Anokhe Lal Vs. Radhamohan Bansal and others, AIR 1997 SC 257 their Lordship of the Apex Court in respect of the aforesaid provision held in paragraph 7 as under:- "7. The aforesaid Rule 4(1) is clearly an exception to Section 45 of the Contract Act. The principle made out in Section 45 applies to a situation where one person has made a promise to two or more persons jointly. The right to claim performance of the contract arising out of such a promise would then rest with those promisees together during their joint lives and after the death of any of them, such right would devolve on the representative of the deceased promisee jointly with the surviving promisees. Thus, if the joint promisees were partners of a firm this provision obliges the legal representative of a deceased partner who join the rest in enforcement of the right to have performance of the contract." In the light of the aforesaid proposition of law laid down by the Apex Court, we do not find any discrepancy in respect of the suit being brought against the appellant/defendant, the surviving partner of the said firm. Accordingly, the contentions raised by the appellant in respect of mis-joinder of parties is sans merit and is rejected hereby. ( 12. ) The next question is whether the interest charged @ 20% per annum besides being exhorbitant is de hors the term of agreement. Accordingly, the contentions raised by the appellant in respect of mis-joinder of parties is sans merit and is rejected hereby. ( 12. ) The next question is whether the interest charged @ 20% per annum besides being exhorbitant is de hors the term of agreement. We have perused the Agreements entered into by the appellant with the plaintiff/Bank wherein it is agreed upon that the Bank shall be entitled to change the rates of interest from time to time. Besides there being the clause of enhancement of rate of interest from time to time, Section 21A of the Banking Regulation Act, 1949 as inserted by Banking laws (Amendment) Act, 1984 stipulates:- "21A. Rates of interest charged by banking companies not to be subject to scrutiny by courts:- Notwithstanding anything contained in the Usurious Loans Act, 1918, or any other law relating to indebtedness in force in any State, a transaction between a banking company and its debtor shall not be reopened by any court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive." The contentions regarding the charge of interest being excessive and dehors the term of agreement is without any substance and accordingly rejected. ( 13. ) No other points then the aforesaid, are urged by the appellant. In the result, the appeal being devoid of substance is dismissed. No costs. Appeal dismissed.