BANK OF MADURA LIMITED Vs. MANINDER SACHDEVA
LAWS(DLH)-1996-7-128
HIGH COURT OF DELHI
Decided on July 01,1996

BANK OF MADURA LIMITED Appellant
VERSUS
MANINDER SACHDEVA Respondents

JUDGEMENT

Lokeshwar Prasad, J. - (1.)The plaintiff has filed the present suit for the recovery of Rs. 6,06,799.60 against the defendants, named above. The case of the plaintiff, in brief, is that the plaintiff is a Banking Company, incorporated under the provisions of the Indian Companies Act, 1913, having its registered office at 33, North Chitrai Street, Madurai, Central Office at 758, Anna Salai, Madras and amongst others one of its Branches at F-144, Rajouri Garden, New Delhi and that Shri P.L. Muthiah, the Branch Manager of the plaintiff-Bank at Rajouri Garden Branch, is one of the principal officers of the plaintiff-Bank who is authorised to sign and verify the plaint and institute the present suit on behalf of the plaintiff-Bank.
1.2. It is alleged that defendant No. 1 is carrying on the business as a Transport Operator' and in connection with the above said business the said defendant applied for a 'secured loan' of Rs. 2,50,000.00 which was sanctioned in favour of the said defendant on 16.7.87. The above said loan was repayable in 48 monthly instalments, each of Rs. 5,210.00 exclusive of periodical in alments of interest. It is further alleged that the loan was sanctioned against hypo secation of a truck to be purchased at a cost of Rs. 3,35,702.00 . The said loan was father to be collaterally secured by extension of hypothecation of charges of the plaintiff-Bank on the vehicles (viz. two vehicles bearing No. URB 3825 and DEL 2343 both registered in the name of defendant No. l)which were already hypothecated against the advance of Supply Bills for Rs. l,00,000.00 given to M/s. Golden Transport Agency and also against hypothecation of one new Tata Model Truck, bearing Registration No. DIG 3510 purchased from the funds advanced by the plaintiff-Bank.

1.3. It is further alleged that in connection with the above said secured loan of Rs. 2,50,000.00 defendant No. 1 executed a Demand Promissory Note dated the 21st September, 1987 for Rs. 2,50,000.00 promising to pay the said sum to the plaintiff- Bank together with interest @ 2.5 % per annum over the Reserve Bank of India rate subject to a minimum of 12.5 % per annum with quarterly rests. On 21.9.87 defendant No. 1 addressed a Take Delivery Letter' to the plaintiff and also executed an Agreement of Hypothecation in respect of vehicle bearing registration No. DIG 3510 in favour of the plaintiff-Bank. On the same date i.e. on 21.9.87 defendant No. 1 also executed a letter of extension, extending the charge of vehicles bearing Registrations No. URB 3825, DEL 2343 in favour of the plaintiff-Bank.

1.4 It is averred that defendants 2 & 3 agreed to stand as surety for the repayment of the amount due in the account of defendant No. I and executed letters of guarantee in favour of the plaintiff-Bank on 21.9.87 itself as a result of which the liability of defendants 2 & 3 to pay the amount clamped in the suit is co-extensive with that of defendant No. 1.

1.5 It is also alleged that the defendants failed to adhere to the Bank's financial discipline. However, the defendants executed the revival documents on 24.6.90 including the guarantee letters executed by defendants 2 & 3.

1.6 As per the case of the plaintiff-Bank the defendants became irregular in the operation of the above account so much so that a sum of Rs. 5,03,780.55 was due from the defendants exclusive of interest upto 30.9.92. The plaintiff-Bank therefore got issued a legal notice dated the 10th November, 1992 call ing upon the defendants to pay the sum of Rs. 5,03,780.55 together with interest and other charges within fifteen days from the date of the service of the said notice but the said notice yielded no results. It is alleged that a sum of Rs. 6,06,799.60 is due and payable by the defendants to the plaintiff-Bank on the date of the filing of the suit and the liability of the defendants is joint and several. The plaintiff-Bank has prayed that a decree for Rs. 6,06,799.60 be passed in favour of the plaintiff-Bank and against the defendants, holding the defendants 2 & 3 also personally, jointly and severely liable for payment of the decretal amount, future interest, cost and incidental expenses alongwith defendant No. 1. The plaintiff-Bank has also claimed pendente lite and future interest @ 24.5% per annum with quarterly rests with costs. It has also been prayed by the plaintiff-Bank that the hypothecated trucks, bearing Registration Nos. DIG 3510; URB 3828 and DEL 2343 be ordered to be seized and sold by auction and the sale proceeds thereof be allowed to be adjusted towards the decretal amount and the balance be ordered to be recovered from the personal properties of the defendants.

(2.)Since the defendants did not care to appear despite service they were directed to be proceeded ex-parte in the present proceedings vide order dated 26.7.94 and 23.2.95.
(3.)The plaintiff-Bank in support of its case has filed the affidavit by way-of evidence of Shri Pazhaniappan, Branch Manager of the plaintiff-Bank of its F-144, Rajouri Garden Branch, New Delhi. Said Shri Pazhaniappan in his affidavit dated the 29th August, 1985 has supported the case of the plaintiff-Bank and has also proved and exhibited the material documents. The evidence of Shri Pazhaniappan, adduced by way of affidavit, has gone on record unrebutted and unchallenged. which I see no reason to disbelieve. On the basis of the facts, as disclosed by Shri Pazhaniappan in his affidavit, it is established that on a request, made by defendant No. 1, the plaintiff-Bank sanctioned a 'secured loan' of Rs. 2,50,000.00 in favour of the defendant No. 1 for the purchase of a Truck. It is further established that as per the terms of the sanction the truck to be purchased by the defendant was to be hypothecated and the loan was further to be collaterly secured by the extension of hypothecation of the charges of the plaintiff-Bank on the vehicles already hypothecated against the advance of supply bills for Rs. l,00,000.00 given to M/s Golden Transport Agency. It is also established that in consideration of grant of sanction and availing of the said loan, defendant No. I executed a Demand Promissory Note (Exhibit PW-1/3) for Rs. 2.5 lacs; an agreements of hypothecation (Ex.PW-1/5, Ex.PW-1/6 & Ex. PW-1/7); a letter of extension (Exhibit PW-1/8), extending the charge on vehicles bearing Nos. URG 3825 and DEL 2343. It is further established that defendants No. 2 & 3 have stood as a surety for the repayment of the amount of loan by defendant No. 1 and in that connection they executed letters of guarantee (Exhibit PW-1/9 and Exhibit PW-1/10) in favour of the plaintiff-Bank. Letter, addressed by defendant No. 1 dated the 24th June, 1990, acknowledging the liability, which is Exhibit PW-1/11 also stands proved. The other material documents i.e. revival of guarantee letters (Exhibit PW-1 /13 and Exhibit PW-1 /14) also stand proved, On, the basis of the ex-parte evidence adduced by the plaintiff-Bank by means of affidavit of Shri Pazhaniappan, Branch Manager of the plaintiff-Bank and other material on record it is established that a sum of Rs. 6,06,799.60 is due and payable by the defendants jointly and severely to the plaintiff-Bank together with costs and interest.
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