Judgment:
ORDER
A.K. Sikri, J.
1. The plaintiff Bank has filed this suit for recovery of Rs. 5,36,969.34 paisa. It is stated in the plaint that the plaintiff Bank is a Banking Company duly constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 having its head office at bangalore and branch office, amongst others, at 269, Fruit & Vegetable Market, Okhla Industrial Estate, New Delhi-110020. Shri J.G. Bhat being a Divisional Manager is one of the Principal Officers of the plaintiff Bank, is fully conversant with the facts of the case and is competent to sign and verify plaint and file the present suit. He also holds powers of attorney in his favor duly executed by the plaintiff Bank in his favor and as such is authorised, competent and empowered to file the suit for and on behalf of the plaintiff Bank, to sign and verify the pleadings, affidavits, engage Advocates and to do all what is just, necessary and in the interest of the plaintiff Bank in connection with the suit and to do all other co-relate acts on behalf of the plaintiff Bank. The present suit is accordingly being singed, verified and instituted by said Shri J.G. Bhat. It is also averred that the defendant No.1 is a Private Limited Company registered under the Companies Act, 1956 having its registered under the Companies Act, 1956 having its registered office at A-85, D.D.A. Shed, Okhla Industrial Area, Phase-II, New Delhi-110020. It is engaged in the manufacturing of digital phones etc. It is further mentioned that in or about December, 1987, defendant No. 1 who had a current account with the plaintiff Bank in the name and style of M/s Prestel Communication (Pvt.) Ltd. through its Directors/defendants 2 to 4 approached the plaintiff Bank for grant/sanction of following loan facilities as detailed below:
(a) Open cash credit limit of Rs. 2.50 lacs (for short hereinafter referred to as OCC Limit).
(b) Supply Bill Limit of Rs. 1 lac.(S.B.Limit for short).
2. The defendants 2-4, as Directors of defendant No.1 offered and stood personal guarantees for repayment of the outstanding dues of the defendant No.1. It is also stated that pursuant to the above request of the defendants 1 to 4, the plaintiff Bank granted/sanctioned to defendant No.1 on 22nd December, 1987 the OCC limit of Rs. 2.50 lacs and supply bill limit of Rs. 1 lacs. In order to further secure the outstanding dues against the defendant No.1 in the aforesaid OCC limit and supply bill limit, the defendants 1 to 4 hypothecated and charged in favor of the plaintiff Bank, the following goods, commodities, raw materials etc:-
(a) All the goods, commodities, raw materials, stocks of R.M. WIP & PG such as K.S. key pads, microphones and all the other goods belonging to the defendant No.1, as detailed in relevant Agreement; opening of cash credit (open loan) dated 22nd December, 1987.
(b) Machines, accessories, tools etc. executed or installed or stored at the premises bearing No. A-85, D.D.A.Shed, Okhla Industrial Area, Phase II, New Delhi-110020 and detailed in hypothecation of Deed-Machinery dated 22nd December, 1987 executed by defendants 1 to 4 and in form No. F-1208 dated 23rd December, 1987 submitted by defendants 1 to 4.
(c) All the books, debts, outstandings, money receivable, claims and bills due or to be fallen due or owned/to be owned by defendant No.1 and as detailed in Agreement to hypothecation or Book Debts dated 22nd December, 1987 between the parties.
3. The aforesaid OCC limit and supply bill limit were secured by the personal guarantees of defendants 2 to 4 and hypothecation of stocks, raw materials, machineries and books debts of defendant No.1. The plaint further disclosed that in consideration of and in connection with the grant/sanction of aforesaid OCC limit and supply limit, the defendants 1 to 4 signed and executed the requisite loaning documents on 22nd December, 1987 and 23rd December, 1987 including the following:
(a) Letter of undertaking not to avail OCC facility elsewhere dated 22nd December, 1987.
(b) Request for overdraft facilities in F-372 dated 22nd December, 1987.
(c) Demand promissory note dated 22nd December, 1987 for Rs. 2.50 lacs(F-254) whereby the defendant no.1 secured the aforesaid OCC limit and also agreed to pay the amount of Rs. 2.50 lacs on demand with interest as detailed therein.
(d) Agreement regarding opening of open cash credit limit dated 22nd December, 1987 in F-491a whereby the defendant No.1 hypothecated in favor of the plaintiff Bank all the goods, commodities, stocks, raw materials etc. pertaining to it and lying or stored at whichever place(s) in possession of the defendant No.1 to secure the loan facilities enjoyed by defendant No.1.
(e) Agreement for discounting of supply bills in F.900 dated 22nd December, 1987 whereby the defendant No.1 agreed besides other terms and conditions to make payable direct to the plaintiff Bank, the amounts receivable by defendant No.1 under several contracts of sale (in respect of which advances are sought) either by tendering supply bills for the amounts in accordance with the relative contracts of sale or by executing necessary documents in conformity with terms of contract in favor of the plaintiff Bank. The defendant no.1 also undertook that the supply bills discounted under the said limit shall not outstand beyond a period of forty five days.
(f) Demand Promissory Noted dated 22nd December, 1987 in F-1190 for Rs. 1 lac along with Taking Delivery Letter to DPN dated 22nd December, 1987 whereby the defendants 1 to 4 secured the aforesaid supply bill limit and agreed to pay Rs. 1 lac on demand besides interest as detailed therein.
(g) Deed of hypothecation of Machinery dated 22nd December, 1987 in F-1007 and particulars of Machinery dated 23rd December, 1987 in F-1208, whereby the defendants 1 to 4 hypothecated in favor of the plaintiff Bank all the machineries, accessories, tools etc. lying stored or installed at A-85, D.D.A.Sheds, Okhla Industrial Area, Phase-II, New Delhi-110020 and detailed in above F-1208 to secure all the loan facilities availed of/to be availed of by defendant No.1.
(h) Agreement to hypothecation of Book debts dated 22nd December, 1987 in F-928 whereby the defendant No.1 hypothecated and charged to the plaintiff Bank by way of first charge all the book debts, outstandings, money receivable, claims and bills which have fallen due/to be fallen due, owned/to be owned by defendant No.1 to secure all the loan facilities availed of/to be availed of by defendant No.1.
(i) Guarantee covering letter along with guarantee letter/agreement dated 22nd December, 1987 executed by defendant No.2 to secure all the loan facilities availed of/to be availed of by defendant No.1.
(j) Guarantee covering letter along with guarantee letter/agreement dated 22nd December, 1987 executed by defendant No.3 to secure all the loan facilities availed of/to be availed of by defendant No.1.
(k) Guarantee covering letter along with guarantee letter/agreement dated 22nd December, 1987 executed by defendant No.4 to secure all the loan facilities availed of/to be availed of by defendant No.1.
4. Further facts mentioned in the plaint are that the plaintiff Bank, on request of the defendants 1 to 4 had discounted from time to time to defendant no.1 various supply bills under the aforesaid supply bill limit. One such supply bill is 31/88 dated 7th March, 1988 for Rs. 1,34,972/- which was discounted under the supply bill limit to defendant No.1 for Rs. 1 lac on 14th March, 1988 was drawn on and accepted for payment by defendant No.5. The defendant No.5 thus become liable to pay to the plaintiff Bank the amount outstanding on account of said supply bill. However, the aforesaid supply bill detailed above when presented to defendant No.5 for payment was not honoured by it and it is well within the knowledge of the defendants. The defendant No.5 having accepted its liability to honour and pay the aforesaid supply bill has refused and failed to honour and pay at the stipulated time in terms of agreement for discounting of supply bills dated 22nd December, 1987. The defendants failed to fulfill their promises and commitments in this regard despite repeated requests and demands including a notice dated 15th September, 1990 of demand and the dishonour of the supply bill from the counsel for the plaintiff Bank to the defendants. As a consequence of the failure of the defendant No.5 to honour the aforesaid supply bill, a sum of Rs. 86,499.60 paisa besides interest thereon has become due and payable as on 12th December, 1990 from the defendants to the plaintiff Bank. The defendant No.5 has thus become jointly and severally liable with defendants 1 to 4 to pay the aforesaid amount of Rs. 86,499.60 paisa and interest pendente lite and future at rate of 17.5 per cent per annum compounded quarterly and inclusive of penal interest at the rate 2 per cent per annum from 13th December, 1990 till the date of realisation. Without prejudice to the rights and interests of the plaintiff Bank, it is submitted that defendant No.5 is only liable to the extent of Rs. 86,499.60 paisa besides interest thereon as mentioned hereinabove. It is also stated that defendants acknowledged and confirmed their liabilities. However, they failed to keep up their promises and clear the outstanding notice dated 15 September, 1990 as was sent by the plaintiff Bank through counsel but without any success. thereforee, the plaintiff filed the present suit as per which as on 12th December, 1990 following amounts are outstanding:
S.No. Name of Limit Amount Due Rate of Interest---------------------------------------------------------(a) Occ Limit Rs. 4,50,469.74 17.5% p.a.(b) Supply Bill Rs. 86,499.60 17.5% p.a.Limit ---------------Rs. 5,36,969.34---------------
5. The plaintiff has prayed for decree against defendants 1 to 4 jointly and severally in the sum of Rs. 5,36,969.34 paisa and against defendant No.5 for Rs. 86,499.60 paisa.
6. The defendant no.1 was served by ordinary process and counsel for defendant no.1 appeared and was given opportunities to file the written statement. However, the written statement was not filed and defendant No.1 stopped appearing. Defendants 2 to 5 could not be served by ordinary process and were ultimately served through publication. Nobody appeared on behalf of defendants 2 to 5. thereforee, they were proceed ex-parte. The plaintiff was permitted to lead evidence by way of affidavit. The plaintiff has filed affidavits of Sh. B.Krishna Moorthy, Manager and Shri J.G. Bhat, Assistant General Manager of the plaintiff Bank. In these affidavits, the case put up in the plaint has been affirmed on oath and various documents and other documents executed by the defendants are proved on record as Ex.PW-1/1 to Ex.PW-1/11 and Ex.PW-2/1 to Ex.PW-2/11. from this unrebutted testimony of the two witnesses as well as documents proved on record, I am satisfied that the plaintiff Bank has been able to prove its case. Accordingly decree is passed to the following effect:
a) Decree for Rs. 5,36,969.34 paisa in favor of the plaintiff Bank and against the defendants as under:
(1) That the defendants 1 to 4 being jointly and severally liable to pay Rs. 4,50,469.74 paisa, a decree is passed for Rs. 4,50,469.74 paisa is passed in favor of the plaintiff Bank and against the defendants 1 to 4.
(2) That the defendants 1 to 5 being jointly and severally liable to pay Rs. 86,499.60 paisa, a decree is passed in favor of the plaintiff Bank and against the defendants 1 to 5.
7. The plaintiff Bank shall also be entitled to pendente lite and future interest at the rate of 17.5 per cent per annum from 13th December, 1990 till the date of realisation as well as cost of the suit. Decree sheet be prepared accordingly.
8. The suit stands disposed of.