ORIENTAL BANK OF COMMERCE Vs. EAGLE BOOK BINDERS

JUDGEMENT

(1.) This order will govern the disposal of I.A. 14121/92 filed by defendant No. 3 seeking leave to defend the suit.

(2.) . Suit under Order XXXVII, Civil Procedure Code was filed by Oriental Bank of Commerce, inter-alia, alleging that it is a body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertaking) Act, 1980 having its head office at Harsha Bhawan, 8, E-Block, Connaught Place and, amongst others, a branch at Nehru Place, New Delhi. M.R. Aggarwal has been authorised in terms of letter of authorisation dated 21st September, 1990 (Annexure 'A') issued pursuant to Board's Resolution No. F-11 dated 23rd April, 1987, to sign and verify the plaint and institute suit on behalf of plaintiff Bank. Defendant No. 2 is the sole proprietor of defendant No. 1 firm. Said branch of the plaintiff on being approached by defendant No. 2, granted overdraft facility upto a limit of Rs. 20,000.00 to defendant No. 1. In consideration of grant of that overdraft facility, defendant No. 2 executed, (a) letter of request, ..take delivery and continuity; (b) letter of waiver; and (c) demand promissory note, all in the sum of Rs. 20,000.00 in favour of plaintiff Bank. Defendant No. 3 who stood as guarantor for repayment of the said amount with interest by defendants 1 and 2, also executed agreement of guarantee in favour of the Bank on 16th May, 1987. It is further alleged that on 10th November, 1987 defendant No. 1 through defendant No. 2 requested the plaintiff Bank to enhance the said overdraft limit by another sum of Rs. 50,000.00 to meet its urgent financial requirements. On plaintiff's agreeing to that request, defendant No. 2 additionally executed, (a) letter of request, take delivery and continuity; (b) letter of waiver and undertaking; (c) demand promissory note; and (d) agreement of opening cash credit, all in the sum of Rs. 70,000.00 on 10th November, 1987 in favour of the Bank. Defendant No. 3 also gave his personal guarantee of Rs. 70,000.00 and he further executed agreement of guarantee in the said sum on 10th November, 1987 in favour of plaintiff Bank. Rate of interest agreed to be charged was 6.5% p .a. over and above the RBI rate of interest with minimum of 16.5% p .a. with quarterly rests. It is pleaded that the plaintiff Bank maintains books of account in usual course of business and a sum of Rs. 1,27,070.00 including interest and other charges was due from the defendants upto 30th October, 1990 in the said overdraft facility account which they have failed to pay despite request and service of legal notices dated 1st September, 1988 and 6th June, 1990. It was prayed that a decree for Rs. 1,27,070.00 alongwith interest pendente lite and future @ 18.5% p.a. be passed in favour of the plaintiff and against defendants jointly and severally.

(3.) . On failure of defendants 1 and 2 to enter appearance within 10 days time from the date of receipt of summons in Form IV in Appendix "B" of Order XXXVII, Civil Procedure Code, suit was decreed against them for the suit amount with costs and interest pendente lite and future @ 18.5% p.a. thereon by the order dated 31st July, 1991.