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2024 DIGILAW 760 (RAJ)

Bank of Baroda v. Sohan Singh

2024-05-08

ARUN MONGA

body2024
JUDGMENT : ARUN MONGA, J. 1. The appellant herein seeks quashing of the judgment and decree dated 01.11.1993, passed by the learned Additional District Judge, No. 2, Jodhpur, vide the plaintiff's (appellant bank herein) claim for an amount of Rs.3,30,831.60/- was dismissed. 2. The relevant facts of the case are that the respondent-defendant No. 1, a Transport Operator, submitted an application on 30.12.1980 for a financial facility to purchase a new Ford D-1210 Truck Chassis under the agreed terms and conditions. The appellant-plaintiff Bank granted the financial facility to the tune of Rs.1,88,000/- on 05.01.1981, and the respondent-defendant No. 1 executed a Demand Promissory Note and an agreement for the hypothecation of the vehicle in favor of the appellant-plaintiff Bank. The respondents-defendants Nos.2 and 3 stood as guarantors and executed letters of continuing guarantee in favor of the appellant-plaintiff Bank. 2.1. After the loan facility was advanced by the appellant-plaintiff Bank, the respondent-defendant No. 1 purchased the truck chassis from M/s. National Motors, Jaipur. The respondent-defendant No. 1 paid Rs.67,394/- to the appellant-plaintiff Bank on various dates. However, as of 02.09.1986, an amount of Rs.3,30,831.65/- was outstanding towards the respondent-defendant No. 1, which he failed to pay. Consequently, a civil suit for recovery of the outstanding amount was filed against the respondents-defendants in the Court of the learned District Judge, Jodhpur, from where the suit was transferred to the Court of the learned Additional District Judge No. 2, Jodhpur for decision. 3. In his written statement, the respondent-defendant No. 1 pleaded that the plaintiff-bank had indeed issued a bank draft for the truck's price and had taken his signatures on several blank forms. The plaintiff-bank also took Rs.4,000/- for expenses and Rs.25,000/- as a fixed deposit from him. He also claimed that due to the malfunctioning of the Ford Truck's machinery, he suffered a huge loss. He bought the truck on the assurance of the plaintiff-bank that the loan would be charged interest only after the truck was in good condition and that the interest rate was only 9% per annum. He did not agree to pay interest at the rate of 11.85% or 12.5% with quarterly rest. He also claimed not to have executed any demand promissory note, agreement, hypothecation, or bail bond. The respondent-defendant No. 1 expressed his readiness to hand over the truck to the plaintiff-Bank. He did not agree to pay interest at the rate of 11.85% or 12.5% with quarterly rest. He also claimed not to have executed any demand promissory note, agreement, hypothecation, or bail bond. The respondent-defendant No. 1 expressed his readiness to hand over the truck to the plaintiff-Bank. He also claimed that the plaintiff-Bank did not adjust the amount of Rs.25,000/- deposited by him. 3.1. The respondents-defendants Nos.2 and 3 denied being guarantors of the respondent-defendant No. 1 or having executed any surety bond. They also stated that despite the outstanding amount against the respondent-defendant No. 1, the Bank did not take any steps to recover the amount nor take possession of the truck, thus, no liability can be fastened upon them. 3.2. In light of the above, the learned trial court framed the following issues: 1. Whether the plaintiff-Bank had Shree Krishna Murari Mathur as Branch Manager and Chief Officer who had been empowered to file, sign, and take all actions in this regard on behalf of the plaintiff-Bank? 2. Whether the plaintiff admitted to taking a loan from the Bank subject to the conditions mentioned in para No. 6 of the plaint? 3. Whether defendant Sohan Singh executed a Pronote and Agreement dated 05.01.1981 in favor of the plaintiff-Bank in respect of the hypothecation of Truck Ford and provided a loan facility of Rs.1,88,000/-? 4. Whether defendants Om Prakash and Loon Singh stood surety for the amount borrowed by defendant Sohan Singh from the plaintiff Bank and executed surety bonds in favor of the plaintiff-Bank? 5. Whether defendant Sohan Singh had agreed to pay interest on the loan amount at 11.85% per annum with quarterly rest and also decided to pay interest at the increased interest rate whenever the interest rate increased and on 12.07.2021, this increased interest rate was 12.85%? 6. Whether the plaintiff-Bank had a valid outstanding balance of Rs.2,11,119.85p. against the defendants on 05.09.1983 which was confirmed by the defendant Sohan Singh in favor of the plaintiff-Bank? 7. Whether on 02.09.1986, a sum of Rs.3,30,831.65p. was legitimately outstanding amongst the defendants? 8. Whether defendant Sohan Singh had given a sum of Rs.25,000/- for fixed deposit in favor of the plaintiff Bank which has not been adjusted by the plaintiff-Bank? 9. 7. Whether on 02.09.1986, a sum of Rs.3,30,831.65p. was legitimately outstanding amongst the defendants? 8. Whether defendant Sohan Singh had given a sum of Rs.25,000/- for fixed deposit in favor of the plaintiff Bank which has not been adjusted by the plaintiff-Bank? 9. Whether as mentioned in paragraph number 25 of the plaint, the defendant Sohan Singh is entitled to the outstanding amount and has the right to pay installments at the rate of Rs.1200/- per month? 10. Whether the claim is within time? 11. Relief? 4. After examining the respective evidence of the parties concerning the issues framed and the burden of proof to be discharged by them, the learned trial court gave findings in favor of the plaintiff-Bank on issues Nos.1 to 4, 8 to 10, and in favor of respondents-defendants on issues Nos.5 to 7 and 11. 5. I have heard the learned counsel for the appellant. 6. After hearing the arguments and reviewing the case file, I am of the opinion that no interference by this Court is warranted as the findings given by the learned trial court are based on a correct appreciation of the cogent evidence presented by the respective parties. 6.1 Perusal of the impugned judgment, reveals that it is premised on the valid reasoning. The plaintiff-Bank has mentioned the terms and conditions under which the loan was given in its plaint in paragraph No. 6. Those terms do not mention the amount of insurance charges, guarantee fees, or other expenses to be recovered from the defendant Sohan Singh. Krishna Murari Mathur PW2 stated that the terms of the loan sanction are mentioned in Exhibits 3 to 5. Nowhere in these documents is there any condition of charging interest on interest. The fact that interest on interest has been charged in the account Exhibit 20 presented by the plaintiff Bank has been accepted by witness Ashok Kumar in his statements, which is not permissible according to the mutually agreed terms. Ashok Kumar and Krishna Murari Mathur have testified that the account of defendant No. 1 Sohan Singh is Exhibit 20. Exhibit 3, Condition No. 10 of the agreement of hypothecation, mentions the recovery of interest at 6% per annum on expenses. There is no mention of recovering interest on any other expenses. Thus, the plaintiff Bank wrongly added interest at a higher rate on other expenses in account-Exhibit 20. Exhibit 3, Condition No. 10 of the agreement of hypothecation, mentions the recovery of interest at 6% per annum on expenses. There is no mention of recovering interest on any other expenses. Thus, the plaintiff Bank wrongly added interest at a higher rate on other expenses in account-Exhibit 20. The amount of insurance charges, guarantee fees, and other expenses were also added to the account presented in Exhibit 20. Condition No. 12 is related to this insurance fee, in which there is no condition of getting the insurance done by the plaintiff Bank and recovering its expenses. The plaintiff Bank insured the vehicle without evaluating or inspecting it and did not present any receipt of this insurance. Defendant DW1 Sohan Singh testified that this vehicle got damaged after some time, reducing its value significantly and rendering it no longer roadworthy. Therefore, there was no justification for the plaintiff Bank to get the vehicle insured. During cross-examination, plaintiff Bank's witness Ashok Kumar PW1 stated that there is no separate agreement under which the guarantee fee is chargeable. He expressed his inability to explain the condition for levying such a charge after seeing Exhibit 3. This witness also stated that he could not specify the rate of interest charged and the specific period thereof from Exhibit 20. He also testified that there was no agreement regarding the rate of interest on insurance fees and other expenses. 7. Having reviewed the impugned judgment, I am of the view that neither is there any question of law involved nor was anything pleaded or argued during the hearing before this Court that would warrant interference. Moreover, the findings are based on the evidence as already noted, which is not in dispute. 8. In the premise, the appeal is dismissed.