National Small Industries Corporation Limited v. State Bank of India
2015-06-10
NISHITENDU CHAUDHURY
body2015
DigiLaw.ai
JUDGMENT : Nishitendu Chaudhury, J. 1. Judgment and decree dated 28.03.2008 passed by learned Civil Judge No. 1, Kamrup at Guwahati in Money Suit No. 157 of 2000 has been brought under challenge in the present appeal by the plaintiff of the suit. The learned trial court by the impugned judgment and decree dismissed the suit in entirety holding that the Bank Guarantee allegedly issued by the defendants No. 1 and 2 could not be proved. Present appellant, as plaintiff, instituted Money Suit No. 157 of 2000 in the Court of learned Civil Judge No. 1, Kamrup at Guwahati stating that defendant No. 3, namely, Rainao Shaiza, Proprietor of M/s. Indiana Iron & Steel Unit of Chingmeirong East, P.O. Lamlong of Imphal district of Manipur approached the plaintiff for financial assistance for purchase of goods. He produced a Bank Guarantee dated 02.11.1996 executed by defendants No. 1 and 2 in his favour as security of the financial assistance. The plaintiff relying upon the security in the form of Bank Guarantee extended financial assistance to the defendant No. 3 to the tune of Rs. 11,77,500/- on three different dates, namely, 28.11.1996, 30.12.1996 and 24.01.1997. The defendant No. 3 undertook to make repayment within 90 days of the receipt of the amount but after making payment of two installments, he did not clear the balance amount of Rs. 10,29,602/- as on 30.06.2000. Under such circumstances, plaintiff wanted to encash the bank guarantee and made request to the defendant No. 2 by sending demand notice on 21.08.1998 for the purpose. The defendant No. 2 informed the plaintiff company in reply that the bank guarantee was not issued by the branch. Under such circumstances, plaintiff Company issued notice to all the defendants and on expiry of the notice period, instituted the suit for realisation of Rs. 10,29,602/- along with interest in terms of Clause 9 of the loan agreement. On being summoned, the defendants No. 1 and 2 appeared and submitted written statement. In paragraph 5 of the written statement defendants No. 1 and 2 denied issuance of bank guarantee. It was further claimed that the alleged bank guarantee was the outcome of fraudulent act carried on by the present defendant No. 3 and one of the officials of the defendant Bank, who had no authority and/or competence to issue such bank guarantee.
In paragraph 5 of the written statement defendants No. 1 and 2 denied issuance of bank guarantee. It was further claimed that the alleged bank guarantee was the outcome of fraudulent act carried on by the present defendant No. 3 and one of the officials of the defendant Bank, who had no authority and/or competence to issue such bank guarantee. The defendant No. 3, however, did not appear and so the suit proceeded ex-parte against him. 2. Upon perusal of the pleadings of the parties, the learned trial court framed following 9 issues: 1) Whether the suit is maintainable in facts and law? 2) Whether there is any cause of action for the suit? 3) Whether the plaintiff corporation sanctioned the payments to defendant No. 3 against the cost of raw materials to the extent of Rs. 11,77,500/-? 4) Whether the defendant No. 2 executed the deed of bank guarantee in favour of the plaintiff with undertakings that if the defendant No. 3 fails to pay the outstanding amount to the plaintiff corporation during the time of repayment the entire amount due with interest and service would be borne by defendant No. 2? 5) Whether the plaintiff corporation entitled to recover Rs. 10,29,000/-? 6) Whether the plaintiff corporation invokes the bank guarantee duly? 7) Whether the defendant bank failed to abide by the bank guarantee given to the plaintiff corporation? 8) Whether the plaintiff is entitled to the relief claimed? 9) To what any other reliefs the parties are entitled? 3. Plaintiff examined one Rakesh Kesarwani as the sole witness and exhibited 7(seven) documents including the alleged bank guarantee and the agreement between the plaintiff and defendant No. 3. The bank guarantee was marked as Ext. 2 and agreement was marked as Ext. 1. The demand notice addressed to the defendant No. 2 on 21.08.1998 has been marked as Ext. 4. Ext. 5 is the reply of the demand notice of the defendant No. 2 whereby defendant No. 2 claimed that no bank guarantee was issued by the State Bank of India, Churachandpur Branch. Ext. 6 is the pleader's notice to the defendant No. 2. Ext. 7 is the statement of account of defendant No. 3 maintained by the plaintiff. Upon perusal of all these evidences on record, the learned trial court held that the plaintiff has cause of action for the suit and that the suit was maintainable.
Ext. 6 is the pleader's notice to the defendant No. 2. Ext. 7 is the statement of account of defendant No. 3 maintained by the plaintiff. Upon perusal of all these evidences on record, the learned trial court held that the plaintiff has cause of action for the suit and that the suit was maintainable. Issue No. 3 in regard to sanctioning of loan to defendant No. 3 is also decided in favour of defendant No. 3. But coming to issues No. 4 and 5, the learned trial court held that plaintiff not having proved Ext. 2 bank guarantee as required under section 67 of the Evidence Act, it cannot be said to have been proved as per law and consequently both the issues No. 4 and 5 were decided against the plaintiff. Consequently, remaining issues, namely, issues No. 6 to 9 are also decided against the plaintiff dismissing the suit against the defendants No. 1 and 2. However, the learned trial court decreed the suit for Rs. 11,77,500/- against the defendant No. 3 only as it was proved that plaintiff had extended financial assistance to the defendant No. 3. Since, the learned court did not decree the suit against the defendants No. 1 and 2, the plaintiff, as appellant, has preferred this appeal challenging the trial court judgment and decree dated 28.03.2008. 4. I have heard Mr. M. Choudhury, learned counsel for the plaintiff. The engaged counsel for the defendants No. 1 and 2 did not appear and so this court requested Mr. S.S. Sharma, learned senior counsel who was present in the Court to go through the papers and to make submissions on behalf of State Bank of India The learned counsel readily agreed and rendered assistance to the Court. None appears for the respondent No. 3. 5. Mr. M. Choudhury, learned counsel for the plaintiff submits that respondent No. 3 appears to have died in the mean time and that his death does not have any effect on the challenge made in this first appeal because the appellant has restricted their prayer only in regard to liability on the defendants No. 1 and 2 of the money suit. Be that as it may, the appeal abates against the respondent No. 3. 6. Mr.
Be that as it may, the appeal abates against the respondent No. 3. 6. Mr. M. Choudhury, learned counsel for the appellant would argue that the defendants No. 2 and 3 did not deny the issuance of bank guarantee by the defendants No. 1 and 2. What they have stated is that the Ext. 2 bank guarantee was issued by one Haokip, who was neither a Branch Manager nor was he authorized by the bank to issue such bank guarantee. He stated that the bank guarantee in original was presented to the learned trial court and the same was compared by the Sheristadar and in that view of the matter, it cannot be said that it was not proved in accordance with law. 7. Mr. S.S. Sharma, learned senior counsel, submits that by Ext. 5, defendants No. 1 and 2 took a stand at the threshold that bank guarantee was never issued by the defendant Bank. Moreover, plaintiff has to prove his own case and here in this case, plaintiff has failed to prove Ext. 2 bank guarantee in accordance with law. He has also drawn attention of the court to the fact that the bank guarantee has been showed to have been issued by defendant No. 2 on 02.11.1996 with respect to an agreement dated 28.11.1996. Having perused Ext. 2, he has also drawn attention of the court to the fact that space for date in the agreement was kept blank and subsequently, it has been filled up with pen in different ink. This also shows that there was some foul play involving issuance of so called bank guarantee. Bank Guarantee dated 02.11.1996 could not have mentioned about an agreement dated 28.11.1996 which was never in existence as on that date. Besides, mere presentation of a document and marking on it does not make it evidence. A party presenting a document is duty bound to prove its content, the learned senior counsel argued. 8. The point for determination that arises in this appeal under the above facts and circumstances is as below: Whether the plaintiff has succeeded to establish that the defendants No. 1 and 2 had executed Bank guarantee? 9. Having heard the rival arguments of the learned counsel for the parties and on perusal of the materials available on record, a bona fide doubt arises about existence of Ext. 2 itself. It is seen that Ext.
9. Having heard the rival arguments of the learned counsel for the parties and on perusal of the materials available on record, a bona fide doubt arises about existence of Ext. 2 itself. It is seen that Ext. 2 is purportedly sealed and signed by one L. Haokip claiming to be Branch Manager of Churachandpur Branch of State Bank of India in the district of Imphal, Manipur. Plaintiff having relied on this evidence was duty bound to take steps for examination of this issuing officer to prove the bona fide. Moreover, the document itself shows that it was executed on 02.11.1996 and it was in respect of a loan agreement dated 28.11.1996. Under normal circumstances, a bank is not supposed to know that 26 days after execution of the bank guarantee, a loan agreement will be issued by the plaintiff to the defendant No. 3. Moreover, the original of the bank guarantee produced by the learned counsel for the appellant shows that mentioning of the date 28.11.1996' was written by a different handwriting and in different ink. This shows that there was some foul play at some level. 10. The plaintiff has placed reliance on Ext. 2 bank guarantee to bind the defendants No. 1 and 2. This being the position, burden heavily falls on the plaintiff to establish that Ext. 2 bank guarantee was issued by the defendants No. 1 and 2. But no step appears to have been taken on behalf of the plaintiff for the purpose of formal proof in accordance with law. P.W. 1 is a Law Officer of the plaintiff who admittedly joined plaintiffs Office at Guwahati much after execution of loan agreement dated 28.11.1996 and he admitted that he did not have any personal knowledge about the transaction. Naturally, he could not prove the signatures appearing on Ext. 2 and has merely described the document as Ext. 2. He did not prove the content. It is established law that mere marking of exhibits on documents would not result in proof of its content Ext. 2 is a document signed by the Branch Manager of the defendant Bank.
Naturally, he could not prove the signatures appearing on Ext. 2 and has merely described the document as Ext. 2. He did not prove the content. It is established law that mere marking of exhibits on documents would not result in proof of its content Ext. 2 is a document signed by the Branch Manager of the defendant Bank. In that view of the matter, under section 67 of the Indian Evidence Act, the plaintiff was duty bound to prove that the document alleged to be signed by the defendant No. 2 was actually the signature and the handwriting of the Branch Manager of the Defendant No. 1. This could have been done by calling as a witness of the plaintiff, any of the bank Officers or the person who had signed it Plaintiff stands or falls with Ext. 2 bank guarantee and so it cannot shift the liability to the defendant bank for failing to lead evidence on his part. The defendants No. 1 and 2 have not admitted execution of Ext. 2. According them it is a fraudulent document. Under such situation although the document is exhibited but unless the execution and the contents therein are formally proved in accordance with law in that event, it is not possible to rely on such document. 11. In the case of Biradmal Singhvi vs. Anand Purohit, 1988 (Supp) SCC 604, the Apex Court was confronted with the situation as to whether date of birth mentioned in Scholar's Register is to be accepted as proved merely because the register was exhibited and proved. Apex Court held in that case that merely because me documents were proved, it does not mean that the contents of the documents have been proved. Same view has been taken by the Apex Court again in the case of Alamelu vs. State represented by Inspector General, AIR 2011 SC 715 . 12. In the case in hand the signature of the officer executing Ext. 2 has not been proved. Had the executor been summoned, the defendants would have been in a position to ask him as how a prospective date for granting loan by the plaintiff could be known to the Bank or as to why the date of agreement was kept blank for subsequently filling up. The executor could also been contradicted with the supporting documents maintained by the Bank in regard bank guarantee.
The executor could also been contradicted with the supporting documents maintained by the Bank in regard bank guarantee. The plaintiff has merely presented a document to court and has not attempted to formally prove its execution and its contents. It cannot, therefore, be held that Ext. 2, bank guarantee has been proved. 13. This Ext. 2 is the fulcrum on which the case of the plaintiff hinges and it is this document on which the trial court judgment and decree is based. Plaintiff's sole case in this appeal is that, defendants No. 1 and 2 committed error in not encashing the bank guarantee and not providing the amount mentioned therein to the plaintiff. When the basis of their claim has not been substantiated in accordance with law, in that event plaintiff cannot get the relief prayed for. The learned trial court has considered the evidence led by the plaintiff in entirety including the mode as to how the document has been proved. The inherent discrepancies as to date appearing on Ext. 2 have also received due consideration of the learned trial court. Under such circumstances, learned trial court has not committed any error in not placing reliance in Ext. 2. The sole point for determination stands decided in the negative against the appellant. Accordingly the appeal stands dismissed. The impugned judgment and decree passed by the learned trial court thus, calls for no interference. 14. No order as to costs. Send down the records.