BANK OF RAJASTHAN LIMITED Vs. PALA RAM GUPTA

JUDGEMENT

(1.) Plaintiff filed this suit, inter alia, alleging that it is a Banking company having its registered office at Clock Tower, Udaipur (Rajasthan) and a branch office at 82, Janpath, New Delhi. Plaint has been signed, verified and suit instituted by L.N. Sapra (Manager of the said branch) who is the principal officer and also holds power of attorney in his favour. Defendants who are the owners of Plot No. G-39, Green Park, New Delhi, wanted to construct a building thereon. They approached the said branch of plaintiff Bank for grant of loan being short of funds. Bank agreed to advance loan of Rs. 75,000/- to them on the terms and conditions set out in the letter dated 25th August, 1975 salient features of this letter have been given inub-paras (a) to (i) of Para 4 of the plaint. It is further alleged that defendants on 3rd September, 1975 created equitable mortgage of the property to be constructed on said plot G-39, Green Park by depositing title deeds with the said branch of the Bank. Total amount of loan of Rs. 75,000.00 was received by the defendants from plaintiff by 11th December, 1975. It is stated that a registered lease deed between the parties was executed on 9.12.1975 and the Bank agreed to take on rent the entire first floor and mezzanine floor of said property for running a branch therein. Salient features of the said lease deed are incorporated in para 9 of the plaint.

(2.) It is further pleaded that defendants failed to complete the construction and deliver possession of first and mezzanine floors to the plaintiff Bank by the stipulated date which was 30th December, 1975. In the meantime plaintiff also came to know that said portions of property agreed to be let out, could be used only for residential purpose and its use for commercial purpose was an offence under the Delhi Development Act, 1957. Acccordingly, said L.N. Sapra approached the defendants and asked them to approach DDA to obtain permission for use of the said floors for commercial purpose. Instead of obtaining permission for commercial use, the defendants sent a letter which was received by the plaintiff Bank on 10th June, 1976, informing that construction was completed by the date stipulated in said lease deed and the plaintiff Bank was called upon to take possession within 10 days failing which said portions would be considered as having been taken on rent by the Bank. It is claimed that the averments made in the said letter were false to the knowledge of defendants as they never informed the Bank prior to issue of that letter that construction had been completed. Thus, the plaintiff through its Counsel sent a reply dated 22nd June, 1976 denying the averments made in the said letter. Defendants were further informed that after receipt of the said letter, L.N. Sapra alongwith Vinod Verma of M/s. Riviera Traders (P) Ltd. visited the said building on 22nd June, 1976 and it was found that no internal electric wires had been laid nor electric connection provided. Grills too were not provided and mezzanine floor was incomplete. Said two floors thus were not capable of occupation. The defendants were further informed that on enquiries made by plaintiff Bank it had transpired that said two floors could not be acquired for commercial purpose and the assurance given by defendants about commercial use thereof was untrue to their knowledge. Defendants were, therefore, asked to approach the concerned Authorities and obtain certificate that said two floors could be used for commercial purpose. It is stated that defendant No. 1 refused to take delivery of the said letter and same was received back with the report "Avoid to take". Said letter sent to defendant No. 2 was initially received by him and he also signed AD in token of having received it but on second thought he scored off his signature on AD and refused to take delivery thereof. Thereafter defendants never intimated the plaintiff Bank that said two floors had been completed in every respect and they had obtained certificate from the concerned Authorities. Plaintiff Bank thus could not enter into possession of the said two floors. It is further alleged that plaintiff Bank served notice dated 13th October, 1976 through its Counsel to the defendants requiring them to repay the loan amount of Rs. 75,000.00 alongwith interest at the agreed rate of 13% per annum with monthly rest amounting to Rs. 84,666.92. The defendants vide their reply dated 8th November, 1976 falsely stated that said amount of Rs. 75,000.00 had been given as advance and it was not to carry any interest. It was further stated that defendants never created any equitable mortgage by deposit of title deeds with the plaintiff Bank in respect of the said property and title deeds were given to the Bank only for the purpose of verification of title of defendants to the said property and said amount was be adjusted towards rent. The plaintiff through its Counsel sent reply dated 6th December, 1976 to the communication dated 8th November, 1976 denying the allegations made therein. It is further alleged that defendants through their Counsel sent to the plaintiff a notice dated 15th November, 1977 stating that they had spent Rs.20,000.00in constructing a strong room and Rs.15,000.00 in certain order facilities exclusively meant for Bank purposes. It further stated that the plaintiff had not paid rent since January, 1976 onwards and approximately Rs. 42.000.00 had become due by way of rent from the Bank and said amounts are liable to be adjusted towards advance amount of Rs. 75,000.00. Plaintiff Bank got a reply sent through its Counsel to the said notice. It was prayed that a preliminary decree for Rs. 1,06,705.06 be passed in favour of the plaintiff Bank and against defendants. In default of payment of the amount due under the preliminary decree, a final decree for sale of said property with costs arid interest pendente lite and future @ 13/o be passed against, the defendants. Personal decree is also sought to be made against the defendants for such amount which may remain due after sale of the mortgaged property.

(3.) Both the defendants have contested the suit by filing joint written statement. By way of preliminary objections it is pleaded that the suit as framed is not maintainable. On merits, it is denied that L.N. Sapra is competent to sign and verify the plaint and institute suit on behalf of the Bank. It is admitted that defendants are the owners of plot No. G-39, Green Park. However, it is denied that they approached the plaintiff Bank for grant of loan for raising construction on the said plot as alleged. It is asserted that it was the plaintiff Bank who was keen to open its branch in the said locality and, therefore, had approached the defendants for leasing out the property to be constructed on said plot. It is denied that amount of Rs. 75,000.00 was given by way of loan to the defendants on the terms and conditions as set out in alleged letter dated 25th August, 1975. It is claimed that said amount was given as advance rent to the defendants for finalising construction on the said plot. It is denied that the said amount was to carry interest @ 13% per annum as alleged. Sale deeds of the said plot were taken to the plaintiff Bank for verification of title of the defendants to the said plot. It is denied that sale deeds of the plot were deposited with plaintiff Bank for creatain of equitable mortgage as alleged. It is pleaded that defendants are illiterate persons. Defendant No. 1 does not know English while defendant No. 2 can sign in English but cannot read or write English. The lease deed was got drafted by the plaintiff Bank and signatures of defendants were obtained thereon without explaining the contents thereof to them. Defendants at no point of time were told about the clauses of the said lease deed as mentioned in Para 9 of the plaint. It is alleged that building was constructed much before 30th December, 1975 and defendants had been thereafter constantly requesting the plaintiff to occupy the two floors. It is denied that plaintiff Bank came to know that the two floors could not be used for commercial purpose under Delhi Development Act as stated by it. There was no false assurance given by the defendants that property could be used for commercial purpose. At that time several Banks were functioning in nearby areas even on first floor and there was absolutely no prohibition from the side of DDA with regard to lease of property for Banking purpose. It is denied that L.N, Sapra or any other person told the defendants that the property could be used only for residential purpose or that the plaintiff Bank ever asked the defendants to approach the concerned Authorities for permission to use the two floors for commercial purposes. It is denied that no internal electric wires had been laid or electric connections not obtained till 30th December, 1975 as alleged. It is further denied that mezzanine floor was incomplele. It is asserted that the property was complete in all respects by 30th December, 1975 and the plaintiff Bank was repeatedly asked to occupy it. Receipt of the plaintiff's notice dated 30th October, 1976 is not denied. Reply of the plaintiff dated 6th December, 1976 to the answering defendants' communication dated 8th November, 1976 is further not denied. Liability to pay the suit amount is emphatically denied.