DENA BANK Vs. GLORPHIS JAMES
HIGH COURT OF KERALA
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Varghese Kalliath, J. -
(1.)THIS is an appeal by the plaintiff. Suit is for recovery of money. Under three heads, plaintiff instituted the suit. Defendants have borrowed money from the plaintiff/bank under bill purchase account, hypothecation account and cash credit pledge. We are now concerned in this appeal only with regard to the decree that has been denied on cash credit pledge. In regard to the other two items, a decree has been granted by the trial court and the defendants have not filed any appeal and that part of the decree has become final.
(2.)AS regards the cash credit pledge, only a short point that has to be considered in this case. The case of the plaintiff/bank is that an amount of Rs. 3,83,906/- is to be realised from defendants 1 and 2 under cash credit facility with interest at the rate of 18. 5%. The transaction is admitted by defendants 1 and 2. This amount was advanced on the security of a key loan pledge of certain goods - paints.
In regard to this claim, the contention of the defendants is that the plaintiff is not entitled to get a decree for the amount, because the plaintiff was not in a position to re-deliver the goods to defendants 1 and 2, on payment of the amount. It is plainly stated in the written statement that the pledged. articles were in the safe custody of the plaintiff and so the defendants are not having any access to them. While so, the defendants on many occasions requested the plaintiff to dispose of the pledged articles and to credit the value of the same in their-account. But the plaintiff was quite indifferent and negligent whereby the articles pledged perished. There is no serious dispute in this case at any rate at this stage that the articles pledged were perished, though on other points there is serious controversy.
The question considered by the court below is, in the circumstances, when the pledged articles got perished and the Bank was not in a position to deliver it in the same condition in which it has been received, whether the plaintiff is entitled to a decree when the defendants have admitted that they have borrowed the amount shown in the plaint. The court below found that the Banks also responsible for the deterioration and ultimate loss of the pledged articles and thereby they themselves debilitated in the matter of delivering back the articles pledged. Plaintiff contended that the articles were kept in a room of residential building of defendants 1 and 2. Though the key of the room was with the plaintiff/bank, the plaintiff did not cause the sale of the pledged articles since the defendant was indifferent in disposing of the pledged articles in spite of advice by the Bank to dispose of the articles. However under these circumstances, it is now admitted by both sides (plaintiff and defendants) that the pledged articles were perished.
(3.)THE trial court, after considering the various aspects of the matter found that the plaintiff is not entitled to a decree for the amount claimed under the cash credit facility, since the Bank was not able to re-deliver the articles pledged under that business head. In considering this aspect of the matter, the. Trial court observed that the Bank is in the position of a bailer and the Bank has not taken the proper care that was expected of a bailer and in that event, the Bank has no entitlement to get a decree. THE exemption clause in the agreement of pledge also was considered by the trial court. But the trial court held that the exemption clause will not be potent enough to exonerate the liability of the plaintiff/bank as a bailer under Ss. 151 and 152 of the Contract Act, For this, the trial court relied on the decision reported in 1967 SC 1322 (Lallan Prasad v. Rahmat Ali ). Of course, in that decision, the Supreme Court, has said, relying on certain English decisions, that the pledge cannot maintain a suit for recovery of debt and retention of the pledged property.
In this case, there is no serious contention that the bank is claiming the amount advanced from the defendants and wanted to retain the pledged property. The pledged property has become valueless in this case. Defendants relied on 1967 SC 1322 and submitted that so long as the plaintiff is not in a position to deliver the pledged articles as it was delivered at the time of pledging plaintiff is disentitled to claim a decree.
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