VYSYA BANK LTD Vs. GUARDIAN PAPERS LTD
LAWS(DR)-2003-3-8
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on March 12,2003

Appellant
VERSUS
Respondents

JUDGEMENT

A.Subbulakshmy, - (1.)THE Bank filed original application (OA) before the DRT, Hyderabad, for recovery of Rs. 57,90,000/- together with interest at 17% per annum as against the defendants. THE Tribunal allowed the OA declaring that defendants 1 and 2 alone are liable to pay that amount and dismissed the OA as against the 3rd defendant. Aggrieved with the order the appellant Bank has preferred this appeal.
(2.)The appellant Bank contends that the 3rd defendant is the wife of the 2nd defendant and she is the guarantor and she executed the documents Exs. A5 and A7 creating equitable mortgage by deposit of title deeds and 3rd defendant also is equally liable for the suit claim. Counsel for the appellant Bank submitted that D-3 has executed the documents Exs. A5 and A7 that fasten the liability of D3 with regard to the payment of this amount, since D3 is the guarantor and has agreed and guaranteed for repayment of the loan by creating equitable mortgage by deposit of title deeds, D3 is also liable for the suit claim and the order passed by the Presiding Officer, DRT, dismissing the OA as against D3 is not sustainable. Counsel for the respondent D3 submitted that the documents Exs. A5 and A7 were executed in the year 1986 whereas the loan agreement Ex.A6 came into existence on 3.4.1987 and the documents executed by D3 i.e. Exs. A5 and A7 were executed on 5.7.1986 and since the loan agreement came into existence subsequent to the execution of Exs. A5 and A7, Exs. A5 and A7 cannot fasten the liability of D3 for repayment of this loan.
The significant factor is that Bank is in possession of title deeds of the 3rd defendant. The explanation given by the Counsel for the 3rd defendant is that D3 applied for loan for herself in the year 1984 and at that time she handed over her title deeds to the Bank and the documents Exs. A5 and A7 have been created with the documents available with the Bank and D3 never gave the documents to the Bank with intention to create equitable mortgage and so D3 is not responsible for the suit claim. With regard to applying for loan by D3 in the year 1984, there is no proof. There is also no proof that D3 only for availing the loan, handed over the documents to the Bank. The 3rd defendant also did not subsequently send any communication to the Bank for return of her documents. Admittedly, no loan was sanctioned to D3. So, it is futile on the part of D3 to contend that in the year 1984 she applied for loan and at that time she gave the documents and in consequence of that the other guarantee documents came into existence.

(3.)IN the written statement filed by the 3rd defendant, D3 has stated that she is not a party to the agreement dated 3.4.1987 and as such she has not given any guarantee in pursuance of the agreement dated 3.4.1987. It is further stated that the defendant No. 2 has got some blank forms and papers somewhere in September, 1984 and asked D3 to sign the same and she in good faith signed the blank forms in September, 1984 and not on 5.7.1986 as alleged by the plaintiff and the plaintiff Bank in connivance with the 1st defendant has filled up the blank forms to suit their transaction and for the purpose of filing the present suit and D3 has not given any documents to the plaintiff as collateral security and she is not the owner of the premises. IN the Affidavit Ex. D2 filed by D3 before the DRT, the 3rd defendant has stated that she is not aware of the transaction between the Bank and defendants 1 and 2 and others and she never executed any documents agreeing to stand as guarantor for D1 and D2 and she never offered her properties as security and she never created any mortgage by deposit of title deeds and she approached the Bank for certain financial facility in the year 1984 and she agreed to offer her properties as security and the Bank has obtained her signatures on papers but the Bank has not sanctioned the loan stating that the loans of defendant No. 1 were irregular for which D2 is the Managing Director who is her husband, and she is unnecessarily implicated as party and the properties are added in the OA. The 3rd defendant has stated one version in the written statement and a different version in her Affidavit. IN her written statement she has stated that her husband obtained her signature in blank papers in 1984 and the plaintiff Bank in connivance with D1 has filled up the blank forms and in her Affidavit she has stated a different version stating that she only applied for loan in the year 1984 and at that time she offered her properties as security and the Bank has obtained her signatures but the Bank did not sanction the loan. As I have already stated, there is no proof with regard to D3 applying for loan to the Bank.


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