STATE BANK OF INDIA Vs. G G FOAM

JUDGEMENT

(1.) This is a suit for recovery of Rs. 1,76,082.46 togetherwith future interest @ 14% per annum from the date of filing of the suit tillrealisation.

(2.) The facts of the case, briefly stated, are that the plaintiff bank isa body coporate constituted by the State Bank of India Act, 1955 having itsCentral and Registered Office at Bombay and one of its Regional Head Officeat 11-Parliament Street, New Delhi. The plaintiff has its branches throughout India and one of its branches is situated at Mayapuri, New Delhi. Shri B.R. Nanda, who has signed and verified the present plaint is duly authorisedto institute the present suit and in this regard he holds a Power of Attorneyfrom the plaintiff-bank. As per the averments made in the plaint, defendantNo. 2 representing himself as sole proprietor of defendant No. 1 approachedthe plaintiff-bank for sanction of the Cash Credit facilty and agreed to payto the plaintiff-bank interest @ of 15% per annum on the amount, so advanced. He further agreed to charge, hypothecate/pledge the goods owned bydefendant nos. 1 &2 with the plaintiff-bank. Accordingly, on 12.1.1983,defendant no. 2 on behalf of defendant No. 1 was sanctioned Cash Creditfacility to the extent of Rs. 2.00 lacs (Rs. two lacs only) and the defendantedexecuted various documents, namely, Demand Promissory Note dated12.1.1983 for Rs. 2.00 lacs (Rs. two lacs only), D.P. Note Delivery Letterdated 12.1.1983 duly signed by defendant no. 2 on behalf of defendant No. 1and Form 'I-Special' a Guarantee Bond executed by defendant no. 3 on12.1.1983. It has further been stated in the plaint that defendant no. 2 onbehalf of defendant No. 1 also submitted statement of stock on 12.1.1983hypothecating the stocks to the plaintiff-bank by deposit of certified copy ofthe sale deed executed on 3,4.1969 in favour of defendant no. 2. Defendantno. 2 also submitted an affidavit duly attested by Metropolitan Magistrate,Delhi deposing therein that he had lost the original title deed.

(3.) It is further stated in the plaint that the plaintiff-bank issued anarrangement letter dated 12.1.1983 containing therein the terms and conditions of the Cash Credit limit and the said arrangement letter was signed byall the defendants in token of acceptance of terms and conditions. It isfurther alleged that defendant no. 2 on behalf of defendant No. 1 agreed topay interest @ of 15% per annum on the Cash Credit facility (factory type)rising and falling thereto and now is stated to be 14% per annum.