Decided on June 16,2006



Meena V.Gomber, - (1.) THE applicant Bank filed this claim against defendants named hereinabove on 20th December, 2001 for recovery of a sum of Rs. 19,59,223.78 along with costs, pendente lite and future interest @ 17.75% per annum with quarterly rests in O.C.C. account and @ 16% per annum in CANMOBILE loan account with quarterly rests.
(2.) Briefly stated facts of the case as mentioned in the Original Application are that defendant No. 1, a sole proprietorship concern of defendant No. 2, had, at the request of defendant Nos. 1 and 2, been sanctioned cash credit facility on 21st November, 1995. In consideration thereof, necessary loaning and security documents detained in paras 5(C)(i) to (viii) were executed on 21st November, 1995 and thereafter on 31st October, 1996 at his request a CANMOBILE loan of Rs. 1.79 lacs was sanctioned for purchase of new Maruti car. The said loan was to be repaid in 60 monthly instalments starting from November, 1996. In consideration thereof necessary documents as detailed in paras 5(D)(i) to (vi) were executed. On 8th November, 1996 again the O.C.C. facility was enhanced from Rs. 2.00 lacs to Rs., 3.50 lacs and necessary documents in this regard as detailed in paras 5(E)(i) to (viii) were executed. At this time the acknowledgement of debt dated 8th November, 1996 for Rs. 2,97,627.57 had also been executed by defendant No. 2. Defendant No. 3 stood surety by executing guarantee deed on 8th November, 1996. Thereafter, O.C.C. limit was again enhanced from 3.50 lacs to 6.00 lacs on 13th October, 1997 and from Rs. 6.00 lacs to Rs. 8.00 lacs on 14th February, 1999 and from Rs. 8,00 lacs to 12.00 lacs on 21st September, 1999 and the necessary documents in this regard as detailed in paras 5(G)(i) to (viii), 5(I)(i) to (ix) and 5(J)(i) to (vi) were executed on 13th October, 1997, 14th February, 1999 and 21st September, 1999 respectively. Additional ad hoc O.C.C. limit of Rs. 75,000/-on 11th April, 1997, of Rs. 2.00 lacs on 5th October, 1999 and of Rs, 2.00 lacs on 23rd January, 2000 had also been sanctioned for which also necessary documents as detailed in para 5(K)(i) to (xi) were executed at relevant time. Defendant Nos. 3 to 7 stood surety by executing their continuing guarantees on 14th February, 1997 and 21st September, 1999 for all the facilities. In order to further secure repayment initially defendant No. 3 created equitable mortgage of her property on 8th November, 1996 whereafter said mortgage was extended by executing necessary documents on 8th October, 1999. In the same manner, defendant No. 7 also mortgaged her property on 8th October, 1999 to secure repayment. The interest agreed to be payable was to vary as per R.B.I, guidelines and was @ 14.5% per annum with quarterly rests in C.C. account and @ 18.75% per annum with quarterly rests in CANMOBILE loan account at the time of sanction/disbursement. However, at the time of filing of Original Application the prevalent rate of interest was @ 15.75% and @ 14% per annum with quarterly rests respectively. Besides, defendants also obligated to pay additional penal interest @ 2% per annum in case of default. Thus, according to Bank the interest payable comes to @ 17.75% per annum with quarterly rests in O.C.C. account and @ 16% per annum in CANMOBILE loan account with quarterly rests. Defendants availed the facilities but did not maintain financial discipline. Defendant No. 2, however, confirmed debit balance of Rs. 86,812/- in CANMOBILE account on 26th April, 1999. Despite repeated requests and reminders and even despite legal notice dated 14th September, 2C00, defendants did not regularize the accounts and the accounts were classified as N.P.A. w.e.f. 1st October, 2000 and interest although accrued was not applied. According to Bank it maintains regular books of account in the ordinary course of business wherein a total sum of Rs. 19,59,223.78 along with accrued and applied interest as per breakup shown in para 5(W) was outstanding in both the accounts. The Bank has prayed for issuance of recovery certificate for the said sum of Rs. 19,59,223.78 (Rs. 19,05,897.78 in C.C. account with interest @ 17.75% p.a. and Rs. 53,326/- in CANMOBILE account with interest @ 16% per annum) with quarterly rests and the said sum has been prayed to be realized by the sale of mortgaged properties of defendant Nos. 3 and 7 detailed in paras 5(M) and 5(N) and also from sale of personal properties of defendant Nos. 5 and 6 as detailed in para 5(S) and in case of shortfall from hypothecated assets and personal assets of defendants. Defendant Nos. 1 and 2 filed their joint written statement whereas defendant Nos. 4 and 5 filed their separate written statements. Defendant Nos. 3, 6 and 7 however chose to remain ex parte.
(3.) DEFENDANT Nos. 1 and 2 in their written statement raised the preliminary objections of filing of Original Application by incompetent person, of charging exorbitant rate of interest, of claim being based on wrong statement of facts, of Bank being guilty of commission and omission in letting the stocks go out of control. In parawise reply on merits, they raised the plea of limitation with regard to CANMOBILE account but admitted their approaching the Bank and availing the facilities. According to them Bank did not disburse the loan in time and on account of general slump in the market, they had to borrow from the market for the firm's expenses on day to day basis but Bank did not cooperate. They did not deny execution of alleged documents but alleged rate of interest being exorbitant, statement of account being incorrect and even creation of equitable mortgage of properties by defendant Nos. 3 and 7 was also denied. In the end they prayed for dismissal of Original Application with no costs against them.;

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