SHEILA ENTERPRISES Vs. UCO BANK

JUDGEMENT

(1.) This appeal has impugned the judgment and decree dated 05.2.2004 which has reversed the finding of the trial judge dated 17.3.1998. Vide judgment and decree dated 17.3.1998 the suit filed by the plaintiff i.e. UCO Bank had been dismissed. Vide the impugned judgment the finding of the trial judge was reversed and the suit of the plaintiff stood decreed.

(2.) Plaintiff had filed a suit for recovery of ' 51,850/- against three defendants. Defendant no.2 was the proprietor of defendant no.1. His account was introduced by defendant no.3. Defendant no.2 had requested for availing temporary over-draft facility which was permitted. Defendant no.2 had pledged his FDR in the sum of '1,00,000/- which was jointly in his name and in the name of his wife in the account of defendant no.3 and requisite formalities had been completed by defendants no.2 and 3 in this regard. Defendant no.3 availed over-draft facility on the strength of this FDR which was in the joint names of defendant no.2 and his wife. Since the account of the defendant no.3 was outstanding and he had failed to regularize it in spite of requests, the proceeds of the aforenoted FDR which was in the joint names of defendant no.2 and his wife were adjusted against outstanding account of defendant no.3. On 30.3.1992 the bank came to know that a wrong credit entry of '19,000/- dated 24.7.1990 had been made in the account of defendant no.1 Defendant no.1 through defendant no.2 wrote a letter dated 28.3.1992 to the bank wherein he requested the Bank that the FDR which he had pledged be adjusted against his account. The contention of the bank was that the said FDR already stood adjusted against the outstanding against defendant no.

(3.) On 8.3.1995 a legal notice (Ex.PW-1/16) was served upon the plaintiff informing him that since he had failed to regularize his account; he was called upon to pay a sum of '40,468.42/- which was outstanding as on 31.12.1993 along with interest failing which legal action would be taken against him. Present suit was accordingly filed. 3. In the written statement, the contention of the defendant No.1 was that he has pledged this FDR of '1,00,000/- against his own account; it was not pledged against the account of defendant no.3. The said FDR should have been adjusted against his account i.e. of defendant no.1; no amount is payable by the answering defendants no.1 and 2.