SYNDICATE BANK Vs. POLYNET INDUSTRIES AND ORS.

JUDGEMENT

(1.) Syndicate bank through Shri. Y.M. Pai, Manager and Principal Officer of the bank has filed this suit for recovery of Rs. 1,76,290.80 against M/s Polynet Industries and others. The case as set up is that defendant no. 1 a partnership firm and defendants 2 to 5 its partners had been enjoying bank facilities and financial accommodations from plaintiff banks Modi Nagar Branch. Defendants 6 and 7 joined the loan transactions as surety/co-obligants. In Nov., 1974 banking facilities and financial accommodations to the extent of Rs.50,000.00 in the nature D.B.D. and Rs. 40,000.00 in the nature of ODH and Rs. 95,000.00 in the nature of loan-OSL were sanctioned in favour of the defendants in consideration of which the defendants executed agreement dated .18.11.1974. Defendants also executed letter of personal guarantee and other banking documents. They also executed demand promissory note fora sum of Rs.40/XX)/- and a letter of request for over-draft facilities and deed of hypothecation of goods. Defendants had been availing and enjoying these facilities when their loan account OSL 27/74 was transferred from Modinagar Branch to Asaf Ali Road Branch , New Delhi in 1977 . The liability of the defendants in the said account is to the tune of Rs. 74,647.50 on which account an interest in the sum of Rs. 15,00520 was due on 25th April, 1977. Thus as on the date of transfer there was a debit balance of Rs. 89,625.70 was due and in the ODH account the liability of the defendants was to the tune of Rs. 39,352.93 when the account was transferred from Modinagar Branch to Asaf Ali Road mach. Defendants were also allowing banking facilities and financial accommodations in the nature of ODGH to the extent of Rs.40,000.00 and in ODGP to the extent of Rs. 20,000.00 and limit for issuing bank guarantees to the extent of Rs. 12,000.00. For this the defendants 1 to 3 executed further banking documents and deed of hypothecation. Defendants 2 and 3 made themselves individually liable to the extent of Rs.72,000.00 each in respect of these three facilities. These three facilities were granted in the trade name of defendant No. 1. The defendants agreed to pay interest on the amounts at the rate of 5% per annum above the Reserve Bank of India rate with a minimum of 14% compounded quarterly. Defendants had been operating and availing the over-draft facilities against the hypothecation of stocks. The payments received from the defendants on various dates were credited in their account. As per banking practice on 14th March, 1984 on account of lodging DIGC (SSI) claims the liabilities obtaining at the relevant time were amalg mated and the amounts then due were transferred to DICGC claims lodged accounts. These two accounts of the defendants were amalgamated and the same were put under Heading DICGC claims lodged account against which defendant r.o.l was liable to pay Rs. l,76,290/.80 as on 10th Dec., 1986. The defendants have not been paid this amount inspite of repeated reminders though the defendants had been admitting their liabilities but still the amounts have not been paid. Hence the suit.

(2.) Defendants 1 and 2 filed the written statement and took the objection that the suit was barred by time and that it has not been instituted by a duly authorised person. Moreover the present suit has been filed for recovery of interest amount which is usurious excessive and against the provisions of Usurious Loans Act, and against the directions of Reserve Bank of India and as such the suit is not maintainable and that the documents were got signed when they were blank and have been subsequently filled up. Other defendants 3 to 7 did not file any written statement. They were proceeded ex-parte because inspite of service through publication appearing in the newspaper "Statesman" they did not appear.

(3.) On the pleadings of the parties, following issues were framed: