A.K. Parichha, J.
1. This is an appeal by the unsuccessful plaintiff against the judgment and decree passed by the learned Civil Judge (Senior Division), Jagatsinghpur in M.S. No. 143 of 1992.
2. Plaintiff is a Nationalized Bank. Defendant No. 1 applied to the plaintiff-Bank for a loan of Rs. 1,65,000/- for purchase of a Tata Truck. The plaintiff-Bank after considering the said application sanctioned the loan. Defendant No. 2 stood as a guarantor for that loan. Pursuant to the sanction of loan, both the defendants jointly executed a deed of agreement making them jointly and severally liable for repayment of the loan with interest. It was agreed that the loan would be repaid by monthly, instalments of Rs. 3,900/- commencing from 1.12.1984. Defendant No. 1 defaulted in repayment of the loan in spite of demands by the officials of the plaintiff-Bank and a sum of Rs. 1,91,756.40 remained outstanding. Since this amount was not paid in spite of advocate's notice served by the plaintiff-Bank, suit was filed for recovery that amount along with pendentilite and future interest at the rate of 17.75% per annum. Prayer was also made for attachment and sale of Tata Truck bearing registration No. OAC-5261, which was under hypothecation with the plaintiff-Bank, as well as movable and immovable properties belonging to the defendants. Defendant No. 1 filed written statement, but did not contest the suit and was finally set ex parte. The present respondent No. 2, as defendant No. 2, filed written statement assailing the claim of the plaintiff and raising a counter claim for recovery of Rs.2 lakhs from the plaintiff-Bank. The specific case of the defendant No. 2 was that he no doubt stood as guarantor for the loan of defendant No. 1, but he had no liability for repayment of the loan until all the process against defendant No. 1 and his properties and the hypothecated truck had been exhausted. He also pleaded that he had, deposited Rs. 50,000/- with the plaintiff-Bank vide Vikas Cash Certificate No. 593690/88 on 28.9.1984 and the deposit was renewable after every six years. According to him, his certificate maturity amount had already become Rs. 2 lacs by 1.8.1995, but the plaintiff-Bank refused to release this amount on the plea that the maturity amount of Vikas Cash Certificate had already been adjusted in August, 1989 towards repayment of the loan of defendant No. 1. Defendant No. 2 specifically pleaded that the plaintiff-Bank had no authority to appropriate his Vikas Cash Certificate amount and therefore, decree be passed directing the plajntiff Bank to pay Rs. 2 lacs to him.
3. From the pleadings of the parties, learned trial Court framed the following issues:
1. Whether the plaintiff is entitled to realize the outstanding dues from the defendants ?
2. To what relief, if any, the plaintiff is entitle ?
3. Whether V.C.C. of Rs. 50,000/- can be returned to the defendant No. 2 .after maturity of two consecutive terms amounting to Rs. 2,00,000/- with interest.
4. Whether the counter claim will be decreed with cost ?
4. The plaintiff examined its Assistant Manager as the sole witness and produced the documents, such as, loan application of defendant No. 1, sanction letter of that loan, deed of agreement executed by the defendants, money receipt, acknowledgement of debts given by defendants, true copy of the statement of accounts of the loan, letters of security given by defendant Nos. 1 and 2, which were marked as Exts. 1 to 9 respectively. Defendant No. 2 examined himself as only witness in support of his case. He did not produce any document. On consideration of the evidence led by the parties, learned trial Court decreed the claim of the plaintiff, but at the same time also decreed the counter claim of defendant No. 2 for recovery of Rs. 2 lakhs from the plaintiff-Bank. The plaintiff-Bank has challenged that decree of counter claim in this appeal.
5. Mr. B.N. Ugdata,' learned Counsel for the appellant-Bank submitted that the decree on the counter claim passed by the trial Court is untenable as the same was passed under misconception of law and evidence. He explained that there was letter of security/authority, Ext. 9 given by defendant No. 2 authorising the plaintiff-Bank to adjust his Vikas Cash Certificate value towards the loan of defendant No. 1 if the latter failed to repay the loan and there was also statement of account, Ext. 7 to show that the value of Vikas Cash Certificate of defendant No. 2 was adjusted towards the loan account of defendant No. 1 as defendant No. 1 defaulted in repayment of the loan. He alleged that learned trial Court did not take note of the contents of Exts. 7 and 9 and committing error of record ruled that defendant No. 2 had not given any authority to the bank to adjust his Vikas Cash Certificate amount and that the Vikas Cash Certificate value was never adjusted towards the loan of defendant No. 1. He also argued that the counter claim was not maintainable as it was not in proper form and Court fee had also not been paid oh the claim.
6. Mr. A. Swain, learned Counsel for the respondents supported the impugned judgment and stated that defendant No. 2 never gave any authority to the plaintiff-bank to adjust his Vikas Cash Certificate amount towards loan of defendant No. 1 and therefore, the bank was duty bound to release the maturity value of the Vikas Cash Certificate to him on his demand; and not having done so, the decree of counter claim was reasonable and proper. He submitted that even otherwise, the plaintiff-Bank never adjusted his Vikas Cash Certificate amount towards the loan of defendant No. 1 and therefore, it was legally bound to release the maturity value of Rs.2 lakhs in favour of defendant No. 2. In support of this stand, he cited the case of State Bank of India v. Akhtar Hussain : AIR1993Bom87 . Mr. Swain also argued that the documents like Exts. 7 and 9 cannot be taken into consideration because there was no pleading in the plain that defendant No. 2 had given authority to the plaintiff-Bank .to adjust his Vikas Cash Certificate amount towards repayment of the loan of defendant No. 1 or that such Vikas Cash Certificate amount was adjusted towards the loan of defendant No. 1. Regarding the decree passed in favour of the plaintiff, Mr. Swain submitted that the decree is untenable against defendant No. 2 because the plaintiff-Bank without proceeding against the properties of defendant No. 1 and the hypothecated truck can not proceed against the guarantor. According to him, the guarantor would be liable only when the hypothecated properties and the properties of the principal borrower are insufficient to satisfy the loan. In support of his contention, Mr. Swain cited the.case of Union Bank of India v. Manku Narayana : AIR1987SC1078 .
7. It is not disputed that defendant No. 1 availed loan from plaintiff-Bank and defendant No. 2 stood as his guarantor and both of them executed deed of agreement. It is also not disputed that defendant No. 2 had deposited Rs. 50,000/- in Vikas Cash Certificate No. 593690/88 on 28.9.1984 and that amount was renewable in every six years. The only dispute is whether the plaintiff-Bank was legally competent to adjust the maturity amount of that Vikas Cash Certificate of defendant No. 2 towards the loan of defendant No. 1 Ext.9 is the letter of authority, which reads as follows:
I/we enclose herewith my/our VCC Deposit Receipt/Certificate No. 593690/88 dated 1.8.83 for Rs.50,000/- due on 1.8.1990 duly discharged by me as security for the loan/overdraft account of Shri/Smt. H.B. Pal for Rs....the Bank is at liberty to adjust from the proceeds covered by the aforesaid Deposit Receipt/ Certificate or from proceeds of other receipts/Certificate issued on renewal thereof at any time without any reference to me/us, to the dues under the said loan/OD account.
I/we agree that the above deposit and renewal shall remain with the Bank, so long as any amount on any account is due to the Bank from me/ us or the said Shri Smt. H.B. Pal singly or jointly with others.
Yours faithfully,
From : Radhanath Jena
Radhanath Jena
Defendant No. 2, as D.W. 1 in his cross-examination admitted that he put his signature on the security form, Ext. 9 and 9/a in his signature. He however stated that he never gave authority in this document to the plaintiff-Bank to adjust his Vikas Cash Certificate amount towards the loan of defendant No. 1. Since defendant No. 2 admitted execution of Ext. 9, it was for him to specifically plead and prove that the document was obtained from him by fraud or misrepresentation. No such pleading or evidence was there from his side. On the other hand, he allowed this Ext.9 to be marked as exhibit without objection and admitted that it was a security form and he signed on it. When a document is admitted in evidence without objection and execution of the same is admitted by the executant and no pleading or evidence is there in that document obtained by fraud or misrepresentation, the contents of the document must be considered as proved and can be used as evidence. The contents of Ext. 9 clearly show that defendant No. 2 authorised the Bank to adjust the Vikas Cash. Certificate amount towards the loan of defendant No. 1 in case defendant No. 1 defaults in repayment of the loan. Ext. 7 is the true copy of the statement of accounts of loan of defendant No. 1. This document was also marked as exhibit without any objection and it was never contended by any of the parties that the contents of Ext. 7 are not correct. In Ext. 7 there is an entry in the month of August, 1989 that the amount of Vikas Cash Certificate No. 593690/ 88 amounting to Rs. 1,06,875/- was adjusted towards the loan of defendant No. 1. So, there was clear evidence that the Vikas Cash Certificate amount of defendant No. 2 was adjusted against the loan account of defendant No. 1. The statement of account further shows that defendant No. 1 did not repay the loan by regular Instalments and was a defaulter. With such evidence at hand, the trial Court was totally in error in its observation that defendant No. 2 had not extended any specific authority to the Bank to adjust his Vikas Cash Certificate amount towards the loan of defendant No. 1 in case of default by defendant No. 1 and that Vikas Cash Certificate amount of defendant No. 2 was never adjusted towards the loan account of defendant No. 1. Without going through the contents of Exts. 7 and 9 properly, learned trial Court unnecessarily went into irrelevant discussion about the general lien of the bank in respect of deposits made by the customers. In the above noted backdrop, the ratio of Akhtar Hussain (supra) had no application.
8. Now the next question is whether the documents Exts. 7 and 9 can be considered to record a finding that the Vikas Cash Certificate amount of defendant No. 2 was adjusted towards the loan of defendant No. 1 by the Bank, when there was no specific pleading in the plaint about such authorisation and adjustment. Learned counsel for the respondent vehemently argued that in absence of any specific pleading, the plea of adjustment cannot be considered by the Court and the evidence in this regard can not be allowed. No doubt, Order 6, Rule 2, C.P.C. says that evidence is not to be allowed on matters, which are not there in the pleadings of the parties. But such principle is to be considered in a broad way because the parties are supposed to plead their case and the material facts in a concise form and not to putforth the pleadings about all the evidence they intend to lead. This view is fortified by the observations in the case of Doshei Dei and Ors. v. Rama Routa and Ors. : AIR1985Ori77 , Girijanandini Devi v. Bijendra Narain Choudhury : [1967]1SCR93 as well as Thakar Prasad Sahu v. Mohammed Musa AIR 1925 Patna, 410. In this regard, it would be profitable to quote the observation of the apex Court in the case of Girijanandini Devi (supra).
Whether evidence in support of a party's case is reliable may be raised by the other party without incorporating the contention relating thereto in his pleading. If the rule suggested by counsel for the appellants were to be followed, trial of suits would be highly inconvenient, if not impossible, because at every stage where a party contends that the evidence relied upon by the other side is unreliable, he would in the first instance be required to amend his pleading and to set up that case. The Code of Civil Procedure does not contemplate any such procedure and in practice it would, if insisted upon, be extremely cumbersome and would lead to great delay and in some cases to serious injustice.
9. In the present case though there were no specific pleading in the plaint that defendant No. 2 had given authority to the Bank to adjust the Vikas Cash Certificate amount towards the loan of defendant No. 1 in case of default of repayment and that Vikas Cash Certificate amount of defendant No. 2 was adjusted towards repayment, but it was mentioned in the plaint that as per the statement of account attached to the plaint, a sum of Rs. 1,91,756.40 was outstanding. In the written statement, defendant No. 2 pleaded that the amount under Vikas Cash Certificate was illegally adjusted towards the loan of defendant No. 1. The suit was for recovery of the outstanding loan amount of defendant No. 1. By annexing the statement of account to the plaint, the plaintiff indicated the repayments, the adjustment and the outstanding amount. In order to establish the outstanding amount, it produced the evidence of repayment and adjustment by way of Exts. 7, 8 and 9. In such a situation, these evidence were relevant and admissible and cannot be discarded. These documents along with the surrounding circumstances clearly establish that defendant No. 2 had given authority through Ext. 9 and utilizing that authority, the Vikas Cash Certificate amount of defendant No. 2 was adjusted towards the loan of defendant No. 1.
10. The plea of defendant No. 2 is that the plaintiff-bank could not have adjusted his Vikash Cash Certificate amount towards the loan of defendant No. 1 before proceeding against the hypothecated truck and movable and immovable properties of defendant No. 1. According to the learned Counsel for respondent No. 2, the guarantor becomes liable for repayment of the loan only after the hypothecated properties and the properties of the borrower become insufficient for satisfaction .of the loan. The trial Court accepted this plea relying on the case of Union Bank of India v. Manku Narayan (supra). In that case, the decree in execution was a composite decree, personally against the principal debtor, the guarantor and also against the mortgaged properties and a portion of the decree was covered by the mortgage. There it was observed that for execution of the composite decree, the decree holder bank has to proceed against the mortgaged properties first and then proceed against the guarantor. The facts situation and nature of that case and the present case are totally different. There, composite decree was being executed in an execution proceeding. Here the Bank adjusted some deposit of the guarantor towards repayment of the loan under specific authority given by the guarantor
11. The agreement, Ext. 3 clearly shows that both the defendants made themselves jointly and severally liable for repayment of the loan. In such backdrop, the Bank had authority to proceed against both the defendants for realization of the loan and was legally entitied to adjust the deposits of the defendants as per the authority given under Exts. 8 and 9. It is also worthwhile to note that the counter claim of defendant No. 2 was neither in proper form nor required Court fee was paid on the claim. A counter claim must have all the features of a plaint and must contain the cause of action, valuation etc. and the required Court fee must also to be paid on the claim. In such scenario, the counter claim of defendant No. 2 was misconceived and was not liable to be allowed.
12. For the aforesaid reasons, the decree passed on the counter claim is set aside and the appeal is allowed on contest with cost.