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2018 DIGILAW 577 (GAU)

United Bank of India v. Snehmoye Borthakur

2018-04-03

KALYAN RAI SURANA

body2018
JUDGMENT : Kalyan Rai Surana, J. Heard Mr. M.K Choudhury, learned Senior Counsel assisted by Mr. M. Dutta, learned counsel for the appellant. It may be mentioned herein that the substantive argument on behalf of the appellant was advanced by Mr. M. Dutta, Advocate and the learned Senior Counsel for the appellant had addressed the court on the points of law that had arisen in this appeal. None appears on call for the respondent. 2. This appeal under Section 96 of the Civil Procedure Code (CPC for short) is directed against the judgment and decree dated 12.02.2010 passed by the learned Civil Judge, Sivasagar in T.S 31/1990. By the said judgment, while the suit filed by the appellant Bank for recovery of money was dismissed, the counter-claim filed by the predecessor-in-interest of the respondents was decreed. 3. The defendant in the suit, i.e. the predecessor-in-interest of the respondents had died after the counter-claim was decreed, as such, the respondents, being the legal representatives of the said sole defendant were impleaded. 4. The case in brief is that the appellant Bank wanting to shift to a new premises, published an advertisement in local newspaper dated 30.06.1983, seeking proposal from owners of land and houses for shifting of the Sivasagar Branch. Shri. Munindra Prasad Borthakur, the sole defendant and the predecessor-in-interest of the respondents, by a proposal dated 12.08.1983, offered 4,000 sq. feet of space in the entire ground floor and mezzanine floor to the appellant, seeking an advance of Rs. 3,25,000/- to complete the construction. Accordingly, on 04.06.1984, the appellant sanctioned the said advance. After completion of necessary formalities including creation of equitable mortgage by deposit of title deeds for creating security, the sanctioned advance amount was released in a phased manner. Thereafter, the predecessor of the respondents, wrote to the Bank, offering an alternative space of 3,200 sq. feet space on the 1st and 2nd floor of the said building instead of the space as envisaged in the lease agreement dated 12.06.1984 and asked the appellant to remove the ground floor from their agreement. However, the appellant declined the proposal and recalled the loan because despite request and demands, the predecessor of the respondents did not regularize the loan. Thereafter on 14.12.1987 the appellant issued a registered notice on the said predecessor of the respondents. However, the appellant declined the proposal and recalled the loan because despite request and demands, the predecessor of the respondents did not regularize the loan. Thereafter on 14.12.1987 the appellant issued a registered notice on the said predecessor of the respondents. As per the plaint, the instead of giving the proposed space of the ground floor to the appellant being violation of the agreement, a market was constructed on the ground floor which was let out to others. Hence, by filing the suit, the appellant claimed a sum of Rs. 7,65,484.33 along with contractual interest thereon. 5. The predecessor of the respondents contested the suit by filing his written statement - cum-counter-claim. It was stated that the loan was to be liquidated from the lease rent and therefore, as the appellant had turned down the proposal for alternative space after a lapse of 2 years 5 months, the respondents not only claimed the contractual rent for the ground floor, which was stated to have been kept vacant, but he also claimed lump sum compensation as he had not been able to utilize the first and second floor of the building and, as such, the predecessor of the respondents prayed for the dismissal of the suit prayed and for a decree of his counter claim of Rs. 7,76,240/-, with a prayer for set of the loan amount from the said counter-claim. He also prayed for interest at the rate of 18% till realization. As per the Schedule of the counter-claim, claims were made under the following heads:- i. Loss of monthly rent of the ground floor @ Rs. 600.per month from August, 1985 to December, 1987 (28 months) Rs. 1,68,000/- ii. Interest @ 18% per annum) from Jan 1988 to till filing of the counter-claim Rs. 4,08,240/- iii. Lump sum loss for non-utilization of 1st and 2nd floor for 2 year 5 months. Rs. 2,00,000/- Total Rs. 7,76,240/- (Rupees Seven lakh seventy six thousand two hundred and forty only). 6. On the basis of the pleadings, the following issues were framed by the learned Trial Court:- 1. Whether the suit is maintainable in law? 2. Whether there is cause of action for the suit? 3. Whether the plaint is properly signed and verified? 4. 2,00,000/- Total Rs. 7,76,240/- (Rupees Seven lakh seventy six thousand two hundred and forty only). 6. On the basis of the pleadings, the following issues were framed by the learned Trial Court:- 1. Whether the suit is maintainable in law? 2. Whether there is cause of action for the suit? 3. Whether the plaint is properly signed and verified? 4. Whether the officer who has signed and verified the plaint has any legal authority to institute the suit in the name of and for the United Bank of India? 5. Whether the suit is barred by principle of waiver, estoppels and acquiescence? 6. Whether any term loan account of the defendant was opened at Sivasagar Branch of U.B.I? If not, whether the sanctioned advance was credited from time to time to the SB account of the defendant? 7. Whether the defendant almost completed the ground floor of the building as per agreement for lease and approved plan before expiry of the term? 8. Whether there was lapse on the part of the Bank for not intimating its decision on the proposal given by the defendant to take first and second floor of his building as assured by the Regional Manager of the Bank? 9. Whether the Bank after lapse of time agreed to occupy the space in the first floor as proposed by the defendant for Lead Bank Officer's office cum residence? 10. Whether the retrantion (sic.)/cancellation of the agreement for lease by the Bank is unilateral, arbitrary, unreasonable, illegal and void? 11. Whether the plaintiff is entitled to interest on the advance amount of Rs. 3.25 lacs? 12. Whether the defendant suffered loss and entitled to compensation as claimed in the counter-claim? 13. Whether the plaintiff is entitled to a decree as claimed in the suit? 14. Whether the defendant is entitled to a decree for set off and counter claim? 15. To what other relief or reliefs the parties are entitled to? 16. Whether the counter claim made by the defendant is barred by limitation? 7. The appellant examined 3 witnesses, but the evidence of the appellant's witnesses was expunged due to the failure on part of the appellants to produce their witness for cross-examination. 15. To what other relief or reliefs the parties are entitled to? 16. Whether the counter claim made by the defendant is barred by limitation? 7. The appellant examined 3 witnesses, but the evidence of the appellant's witnesses was expunged due to the failure on part of the appellants to produce their witness for cross-examination. The predecessor of the respondent examined 3 witnesses and exhibited the following exhibits: Offer letter dated 12.08.1983 (Ext.1), Loan sanctioned letter dated 04.06.1984 (Ext.B), Memo of Tenancy (Ext.C), Letter dated 30.07.1985, offering alternative space (Ext.D), Reply dated 11.10.1985 (Ext.E). 8. The learned trial Court took up issue No. 2 first. By referring to the pleadings, the issue was decided in the affirmative by holding that there was cause of action in the suit. In respect of issue No. 1, it was held that the suit was maintainable. In respect of issue Nos. 3 and 4, it was held that the plaint was properly signed and verified by the Manager who had the authority to institute the suit. In respect of issue No. 5, it was held that the predecessor of the respondent had failed to prove that the suit was barred by principle of waiver, estoppel and acquiescence. In respect of issue No. 16, by referring to provisions of Article 113 of the Limitation Act, 1963 as well as the provisions of Order VIII Rule 6A CPC, and by referring to various case citations the learned trial court had mentioned that though the counter-claim was filed on 26.06.2001 after a long period of filing of the suit, but as the petition by the appellant to exclude the counter-claim form the main suit was rejected by order 15.03.2003, it was held that there was cause of action for making the counter-claim, which continued till the defendant delivered is defence or till the time fixed for delivery of defence expires and, as such, it was held that the counter-claim was not bared by limitation. In respect of issue No. 7, by referring to Ext.B, Ext.C and Ext.19, it was held that ground floor of the building was constructed as per the agreement for lease and approved plan before expiry of the term. In respect of issue No. 7, by referring to Ext.B, Ext.C and Ext.19, it was held that ground floor of the building was constructed as per the agreement for lease and approved plan before expiry of the term. In respect of issue No. 8, it was held that the appellant had informed of rejection of the offer on 14.12.1987, after a lapse of 2 years 5 months, so it was held that there was a lapse on part of the appellant in not intimating its decision on the proposal of the predecessor of the respondents. In respect of issue No. 9, by relying on the finding of issue No. 8, the said issue was decided in the affirmative. In respect of issue No. 10, it was held that the unilateral decision to cancel the agreement was arbitrary, unreasonable, illegal and void. In respect of issue No. 12, relying on the letter dated 14.12.1987 (Ext.19) it was held that the reply came after 28 months, as such the predecessor of respondents was deprived of the rent for 28 months and therefore in view of finding on issues No. 7 to 10 and 16, it was held that the predecessor of the respondents were entitled to counter-claim on account of loss and compensation. In respect of issues No. 11 and 14, it was held that the predecessor of the respondents was entitled to decree and interest as prayed for. In respect of issue No. 6, it was held that no term loan account of the predecessor of the respondents was opened at Sivasagar Branch of UBI and it was also held that the sanctioned advanced was created from time to time to the saving bank account of the predecessor of the respondents. In respect of issue No. 13 it was held that the predecessor of the respondent was entitled to get a decree for set off and counter-claim as prayed for. Accordingly, the suit of the appellant was dismissed on contest and the counter-claim of the predecessor of respondent was decreed and against that, the advance amount of Rs. 3,25,000/- was set off. The predecessor of the respondents was held to be entitled to future interest at the rate of 6% per annum. 9. The learned Senior counsel and his instructing counsel for the appellant have pressed all the grounds for the appeal. 3,25,000/- was set off. The predecessor of the respondents was held to be entitled to future interest at the rate of 6% per annum. 9. The learned Senior counsel and his instructing counsel for the appellant have pressed all the grounds for the appeal. Their main thrust was that as the predecessor of the respondents had taken a plea of set off, as such, even without the evidence of the appellant, the predecessor of the respondent is deemed to have admitted that he had availed the loan. The second point which was vehemently argued was that the counter-claim was that the counter-claim was based on the entitlement of the predecessor of the respondent towards monthly rent. In this regard, it is submitted that monthly rent for each month became due at the end of the same month and, as such, monthly rent for each month due would become barred by limitation after 3 (three) years of its becoming due and, as such, notwithstanding that it was permissible to file a counter-claim in terms of Order VIII Rule 6A CPC, but by way of the counter-claim, the cause of action which was barred by limitation cannot be extended and, as such, the counter-claim ought not to have been decreed. 10. Therefore, the points of determination which arises for consideration in this appeal are as follows; 1. Whether in the absence of the evidence of the appellant, the prayer for set off by the predecessor of the respondents constituted admission of the loan? 2. Whether the decree passed in the counter-claim of the predecessor of the respondents is sustainable on facts and in law? 11. On a perusal of the records received from the learned trial Court, it is seen that vide appellant's letter dated 04.06.1984 (Ext.B), the appellant had agreed to take floor space measuring approx. 4,000 sq. feet in the combined entire ground floor and mezzanine floor of the building that was proposed to be built by the predecessor of the respondents from the loan sanctioned by the appellant bank. The said letter also contained the information about sanction of the loan of Rs. 3,25,000/- to enable the predecessor of the respondent to complete the construction and to deliver the said premises within 9 months from the date of the disbursement of the first phase of the advance. The said letter also contained the information about sanction of the loan of Rs. 3,25,000/- to enable the predecessor of the respondent to complete the construction and to deliver the said premises within 9 months from the date of the disbursement of the first phase of the advance. It also contained a term at after completion of the formalities was over, the advanced was to be released as under: (i) Rs. 50,000/- after collection of stone, sand, cement and rods for foundation work, (ii) Rs. 50,000/- after foundation works were completed, (iii) Rs. 75,000/- after the casting of the mezzanine floor slabs, (iv) Rs. 50,000/- after casting of the roof slab, (v) Rs. 50,000/- after walls/floors/doors/windows, etc. were completed, and (vi) Rs. 50,000/- after completion of sanitary and water supply arrangement, electrical wirings including overhead connections and paintings etc. are completed. The said letter dated 04.06.1984 (Ext.B) also contained a clause that on failure of the landlord to deliver the premises on time, will render the landlord to pay 1% commitment charges for delay of every 3 months of part thereof in terms of Clause XXI of the Agreement. As per the contents of the Memo of Tenancy (Ext.C), the said agreement was for entire ground floor and mezzanine floor having combined area of approx. 4,000 sq. feet, for which monthly rent was payable at the rate of Rs. 1.50p per month inclusive of rates and taxes. By letter dated 30.07.1985 (Ext.D), while acknowledging the sanction of loan of Rs. 3.25 lakh, the predecessor of respondent offered an alternative space on the first floor and the second floor of his building and requested for deleting ground floor from the agreement. The Regional Manager of the appellant Bank, had informed the predecessor of the respondent that the matter was taken up by Sivasagar Branch for their views, opinion and comment in this regard and after hearing from the Branch, the Bank would be intimating in due course and the predecessor of the respondents was requested that in future any application regarding the building should be rooted through the Branch. Moreover, in paragraph 11 of the evidence of affidavit of the predecessor of the respondent (DW-1), he had specifically stated that he was not liable to repay the interest on the advance amount given to him by the appellant. Moreover, in paragraph 11 of the evidence of affidavit of the predecessor of the respondent (DW-1), he had specifically stated that he was not liable to repay the interest on the advance amount given to him by the appellant. It was further stated that however, the advance amount may be adjusted from the amount claimed in the counter-claim. Therefore, as per the contents of various letters (Ext.B, Ext.C, Ext.D) and the evidence-on-affidavit of the predecessor of the respondents (DW-1), the receipt of the advance is fully admitted. Hence, it is held that there is an admission by the predecessor of the respondents about the sanctioning and availing of the loan of Rs. 3.25 lakh. Therefore, the first point of determination is answered in the affirmative and in favour of the appellant by holding that the claim by the predecessor of the respondents for set-off of the loan, amounts to an admission of the loan sanctioned by the appellant Bank and availed by the predecessor of the respondent. 12. In respect of point of determination No. 2, it is seen that the counter-claim was for a sum of Rs. 7,76,240/-. As per the schedule of plaints in the counter-claim, the predecessor of the respondent was seeking monthly rent of Rs. 6,000/- per month for the ground floor at the rate of Rs. 1.50 per sq. feet for approx. 4,000 sq. feet from August, 1985 to December, 1987 (i.e 28 months). The counter-claim was filed on 26.06.2001 As stated herein before, the rent for each month would fall due on the last day of each English calendar month, therefore, the claim for monthly rent for the months of August, 1985 to December, 1987 was hopelessly barred by limitation, being beyond the period of 3 years beyond from the date when monthly rent for each month had become due. Merely, because by order dated 15.03.2003, the learned trial court had refused to exclude the counter-claim from the main suit, the said order cannot be said to have extended the period of limitation for institution of the counter-claim to realize house rent, which becomes barred by limitation after expiry of 3 (three) years from the date when it became due. 13. 13. Moreover, as per the contents of the appellant's letter dated 04.06.1984 (Ext.B), the date of delivery of the proposed tenanted premises was within 9 months from the disbursement of the first phase of the loan. No document has been proved by the predecessor of the respondents, by which he had asked the appellant Bank to take over the 4,000 sq. feet approx space in the entire ground floor and mezzanine floor of the building. As per the contents of the letter dated 30.07.1985 (Ext.D) by the predecessor of the respondents, it was mentioned therein that he had commenced construction of the building and he had further stated that as the cost of materials has gone up, it would be impossible to complete the building at the estimated cost of Rs. 5,78,151/-, based on 1982 schedule and therefore, he had made an alternative offer for the first floor and second floor to the appellant by deleting the ground floor from the agreement. In view of above, there is no evidence by the DWs that the entire ground floor and the mezzanine floor of the building was offered to the appellant for their occupation in August, 1985 because admittedly as per letter dated 13.07.1985 (Ext.D), the predecessor of the respondents had commenced his proposed construction and that by the said letter, he had also clearly expressed his inability to complete such construction. Therefore, the very basis of the counter-claim has been made, falls apart. 14. Having seen that the tenanted space as per the memo of the terms of tenancy (Ext.C) was the entire ground floor and mezzanine floor having combined measurement of approx. 4,000 sq. feet. However, the DWs had made no effort to prove that there was any request by the appellant to keep the first floor and second floor un-occupied till they took a decision. Thus, there being no agreement for the said part of the building between the appellant and the predecessor of the respondents to keep the first floor and the second floor unoccupied, if the predecessor of the respondent has kept the first floor and second floor un-utilized, he had done so at this own risk. 15. As per the terms of the agreement (Ext.C), the appellant had an interest only on the entire ground floor and mezzanine floor measuring approx. 4,000 sq. 15. As per the terms of the agreement (Ext.C), the appellant had an interest only on the entire ground floor and mezzanine floor measuring approx. 4,000 sq. feet of the building, as the said space was not offered for occupation to the appellants, there was no cause of action for the predecessor of the respondents to claim monthly rent in respect of the ground floor and mezzanine floor of the building from August, 1985 to December, 1987. 16. The Hon'ble Apex Court in the case of Shanti Rani Das Dewanjee (Smt.) v. Dinesh Chandra Day (dead) by LRs., (1997) 8 SCC 174 , the Hon'ble Apex Court had held that the right to file counter-claim was referable to the date of accrual of cause of action. In this case it was held that if the cause of action had arisen before or after a filing of the suit, and such cause of action continued upto the date of filing written statement or extended date of filing written statement, such counter-claim can be filed even after filing the written statement. However, in the present case, the counter-claim for realization of arrear rent is found to be ex-facie barred by limitation. This Court in the case of A.W Figgis and Co. Pvt. Ltd. v. Barduar Tea & Timber Co. Pvt. Ltd., (1992) 1 GLR 52, had held that counter-claim should be filed within the period during which a separate suit could have been filed to enforce the claim. 17. In view of above, while the claim for loss for non-utilization of first and second floor of the building by the appellant is concerned, merely because of the offer made by the predecessor-in-interest of the appellant, it cannot be construed to be an acceptance of such offer by the appellant. The appellant did not make any request to the predecessor of the respondents to keep the first and second floor of the premises vacant till they take a decision and, as such, there was no promise to that effect by the appellant. 18. Moreover, an offer for an alternative premises of first and second floor of the building against 4,000 sq. feet area in the entire ground floor and mezzanine floor as agreed vide Ext.C would amount to a novation of contract. 18. Moreover, an offer for an alternative premises of first and second floor of the building against 4,000 sq. feet area in the entire ground floor and mezzanine floor as agreed vide Ext.C would amount to a novation of contract. It is seen that in the counter-claim, the predecessor of respondent had not prayed for novation of the contract and no prayer was made for rectification of the terms of the agreement (Ext.C). Hence, it cannot be accepted that the predecessor of the respondents had suffered any loss for non-utilization of the first and second floor of his building. The appellant never asked the predecessor of the respondent in the first place not to utilize the said space till intimation of their decision. Therefore, in view of the discussions above, no case is found to be made out for decreeing the counter-claim in respect of items No. I, II and III of the Schedule of claims. The claim No. I of the Schedule of the counter claim is held to be barred by limitation. Consequently the claim No. II for interest on Claim No. I at the rate of 18% per annum also fails. 19. Item No. III of the Schedule of claim is for loss on account of non-utilization of the first floor and second floor of the building. The said claim is also liable to be dismissed as it has been held herein before that there was no novation of contract and, as such, while the Terms of Agreement (Ext.C) prevailed between the appellant and the predecessor of the respondent, there was no agreement between the said parties in respect of the first and second floor of the building. Moreover, as per the letter dated 30.06.1985 (Ext.D), the ground floor of the building was admittedly incomplete, therefore, in the absence of any evidence to show that the first floor and the second floor of the building was ready for occupation by the appellant bank even without an agreement as on the said date, it cannot be accepted that the said first floor and second floor of the building was constructed and ready for occupation. There being no communication by the predecessor of the respondents that the first and second floor of the proposed building was kept un-utilized for the occupation by the appellant, this Court is constrained to hold that there was no basis for any decree to be passed for lump sum loss as per the Claim No. III of the Schedule of the claim for an amount of Rs. 2,00,000/-. 20. Therefore, in view of the discussions above, the second point of determination is answered in the negative and in favor of the appellant by holding that the counter-claim was not maintainable and was not liable to be decreed. 21. In view of the discussions above, the appeal stands allowed. The impugned judgment and decreed dated 19.02.2010 passed by the learned Civil Judge, Sivasagar in Title Suit No. 31 of 1990, stands reversed. The appellant is found to be entitled to a decree for Rs. 3,25,000/- on admission. In the absence of any evidence by the appellants, the appellant would be entitled to interest at the rate of 6% per annum from the date of filing of the suit till recovery. Moreover, the decree passed in the counter-claim is set aside and consequently, the counter-claim stands dismissed. 22. Let a decree be drawn up accordingly. 23. The parties are left to bear their own costs. 24. Return back the LCR.