STATE BANK OF INDIA Vs. P ABRAHAM

JUDGEMENT

(1.) By this suit, the plaintiff bank seeks to recover Rs. 7,72,488.93 paise with pendente lite and future interest @ 13% p.a. from the date of the suit till realisation with costs of the suit. The case set out in the plaint is that the plaintiff bank is a body corporate constituted by the State Bank of India Act, 1955, having its central office at Bombay and branches, amongst other places, at Najafgarh Road, Delhi, which is under the Administrative Control of local head office at NewDelhi; that defendant No. 1 carries on business as the sole proprietor in the name and style of M/s. Jasper India who manufactures electrical and mechanical equipments etc; that Defendant No. 2 is the guarantor/surety to the plaintiff for defendant No. 1 in respect of the dealings of defendant No. 1 with the plaintiff-bank; that defendant No. 1 got the account opened with the plaintiff-bank as the proprietor of M/s. Jasper India: that in the year 1973 defendant No. 2 as the sole proprietor of Jasper India, approached the plaintiff and obtained the facilities, namely, (a) Medium Term Loan (M.T.L.[Clean]) for Rs. 51,880.00 , (b) M.T.L. (Machinery) for Rs. 92,800.00 ; that for availing the aforesaid facilities, defendant No. 1 executed Articles of Agreement, Demand Promissory Note for Rs. 51,800.00 , both dated 9.11.1973 and Articles of Agreement for M.T.L. against pledge of movable machinery dated 9.11.1973; that as the guarantor-defendant No. 2 besides endorsing the promissory note in favour of the plaintiff-bank, also executed certain documents averred in the plaint; that the plaintiff-bank sanctioned cash credit (Spl. Hypothecation) limit of Rs. 1.00 lakh in February, 1974; that defendant No. 1 as the proprietor of Jasper India also executed agreement of hypothecation and guarantee and demand promissory note for Rs. 1.00 lakh, both dated 18.2.1974 in favour of defendant No. 2; that defendant No. 2 as guarantor also endorsed the DP note besides executing the agreement for hypothecation and guarantee; that defendant No. 1 also availed cash credit (clean) facility to the tune of Rs. 2.09 lakhs and the defendants executed necessary documents for the said facility on 8.11.1977; that defendant also availed of cash credit (nursing account) of Rs. 15000.00 and also executed necessary documents for the said facility on 27.5.1978; that defendant No. 1 availed the aforesaid facilities and as on 14.5.1980, Rs. 7,72,488-93 paise became due and payable by the defendants to the plaintiff under various facilities enjoyed by the defendants inclusive of interest upto 14.5.1980; that the plaintiff called upon the defendants to pay up the amount due and regularise the account but the defendants did not pay any heed to the same and the plaintiff is constrained to file the present suit for the reliefs aforestated, averred more particularly in Clauses (a) to (c) at page 20 of the plaint,

(2.) The defendants, by filing written statement, resisted the suit claim of the plaintiff, inter-alia, contending that the suit is barred by limitation and that the documents were blank when they were signed by the defendants. It is admitted that defendant No. 1 as the proprietor of M/s. Jasper India carries on the business of manufacturing the electrical and mechanical equipments and that defendant No. 1 was maintaining the account with the plaintiff-bank. It is averred in para 10 that certain facilities were given but monies were paid back also. It is denied that any thing is due to the bank. It is further stated that the bank, byreason of its breaches and by reason of negligence with the consequent damage, has caused great loss to the answering defendants and the defendants have lost about Rs. 10.00 lakhs in the process. It is denied that Rs. 7,72,488.93 or any amount, as alleged by the plaintiff, is due or payable by the defendants. It is averred that the plaintiff has deliberately not stated about the payments made by the defendant in their account. In substance, the defendants deny the suit claim and pray for dismissal of the suit.

(3.) In view of the pleadings on record, following issues were framed on 15.10.1981: