ISHAR DAS Vs. PUNJAB NATIONAL BANK LTD

JUDGEMENT

(1.) This is an appeal by Ishar Dass (now deceased and represented by his legal representative) against the Punjab National Bank. The appellant was the petitioner in an application under Section 13 of the Displaced Persons (Debts Adjustment) Act, 1951., In that application he claimed the recovery of Rs. 85,155/9/5 with interest against the Punjab National Bank. According to the application, the petitioner was a guarantee broker of the Bank with respect of various branches which are now in Pakistan. There was an agreement between the parties on 24th January, 1942, setting out the terms of the contract. The petitioner alleges that in furtherance of the said guarantee he gave a cash security of Rs.1,08,155/9/6 as well as the security of immovable property a life insurance policy and also some other securities. The Bank advanced loans to a number of debtors introduced by the petitioner on the security of moveable and other securities approved by it as well as against goods pledged by those debtors. However, on account of the partition of the country particularly all the debtors had to leave their original place of business and came to India and the pledged securities also became unavailable for the purpose of the loan. It was claimed that the petitioner's liability as guarantee broker had terminated as a result of the communal disturbances before and after 15th August 1947, as the goods pledged and the securities furnished to the Bank had been looted, burnt or destroyed because of the Bank's failure to take proper precautions. Consequently, the Bank was responsible for the loss, destruction and non-availability of those goods an securities etc., and the Bank was therefore disentitled to recover the debts from the guarantee given by the petitioner. The Bank had further threatened the petitioner with suits and liability regarding all the debts of the principal debtors and thus was in a position do dominate the will of the petitioner to furnish a fresh settlement with the petition on 17th September, 1949. Under this agreement, the Bank had retained Rs.85,155/9/5 out of the cash, security furnished by the petitioner under original agreement dated 24th January, 1942. It was stated that the terms of the said agreement dated 17th September, 1949, was not a voluntary act of the petitioner but was brought about by the Bank under threat and undue pressure and the terms were thus unconscionable unjust and inequitable and the agreement was void, unenforceable and contravened the provisions of Section 17(b) of the Displaced Persons (Debts Adjustment) Act and was thus not binding upon the petitioner. I have set out the main features of the case of the petitioner though it is not really necessary to do so for the purpose of this appeal.

(2.) The Bank was stated to have finally adjusted Rs.85,155/9/5, which was left as a result of the agreement dated 17th September, 1949, by debiting to the said amount two sums of Rupees 11,387/3/8 and Rs.71,003/1/10 which had been held to be irrecoverable by Shri. Yoh Raj, General Manager and Shri. B.N. Puri, Secretary which were respectively due from Kapur Singh Darshan Singh, Chuhar Khanna and Kaushal Singh Nirmal Singh, Chuhar Khanna, now in Pakistan. It was claimed by the petitioner that these amounts could not be appropriated and could not have been retained by the Bank and the same were liable to be refunded with interest to the petitioner. The Bank contested this position and took up on its part the plea that under the original agreement the 13,12,577/13/3 which was the amount which was guaranteed under the original agreement. The mutual settlement dated 17th September 1949, was intended to fully discharge and satisfy the claim of the Bank and thus a full and final settlement which cannot be reopened under Act No. 70 of 1951. It was also pleaded that the petitioner was not a creditor of the Bank, but, rather the Bank was the creditor of the petitioner and hence the application was not maintainable under Section 73 of the Act. It appears that all the evidence were recorded but the petition has been decided on the preliminary issues which are in the following terms:

(3.) The first question in this case is whether the petitioner now appellant in this Court can be said to be a creditor of the Bank. For this purpose, it is necessary to refer to the agreement dated 24th January, 1942 and also to the agreement, dated 17th September, 1949. The said agreements are Exhibits R-2 and R-1 respectively on the record of this case. Under the original agreement of 24th January, 1942, the petitioner was a guarantee broker and it is necessary to set out some of the relevant terms for the purpose of this appeal. Clause 5 of the agreement is as follows: