WEST BENGAL CEMENT LIMITED Vs. SYNDICATE BANK

JUDGEMENT

(1.) A number of appeals have been filed against the judgment of the learned Single Judge dated 10.10.1988. By this judgment we propose to dispose of all the aforesaid appeals. These appeals involve an important and interesting question of law whether the amount initially advanced can alone be treated as principal sum?

(2.) For the sake of convenience facts of only RFA (OS) No.22/89 are recapitulated as under:

(3.) The respondent/plaintiff has filed a suit for recovery against the appellants/defendants. The respondent bank provided facility of overdraft limit of Rs.10 lakhs to the appellant company against hypothecation of fiat cars, jeeps and commercial vehicles. The appellants in consideration of the said overdraft limit executed a demand promissory note dated 2.2.1972 for the said amount of Rs.10 lakhs carrying interest @ 10% p.a. for the time being. The appellants also executed further documents as set out in the plaint and availed of the said overdraft limit of Rs.10 lakhs. The appellants admitted their liability in writing to the extent of Rs.11,83,327.95 as on 31.12.1974. Inspite of the acknowledgment of the liability, the appellants failed to deposit money in the said overdraft account and when called upon to deposit the sale proceeds of the hypothecated vehicles, the appellants stated that the same had been utilised elsewhere and they were not in a position to pay the same to the bank.