ALLAHABAD BANK Vs. ALOK PRAKASH JAIN

JUDGEMENT

(1.) The plaintiff bank instituted a suit for recovery of Rs.5.79.617.46 (Rs. Five lacs seventy nine thousand. six hundred seventeen and forty six paise only) with costs against Mr Alok Prakash Jain. defendant No.1 herein and his wife Smt. Sushila Jain, defendant No.2 herein.

(2.) The plaintiff's case in brief is. that the defendants. Shri Alok Prakash Jain and Smt. Sushila Jain, had approached the plaintiff bank for credit facilities through their Calcutta Branch in 1966. The defendants were extended credit facilities. The defendants had further pledged 18,000 equity shares of Punjab National Bank Limited, the name of which was subsequently changed to PNB Finance Limited, as security for the overdraft amounts and credits extended.. The account of the defendant was transferred from Calcutta to Scindia House. Branch New Delhi on 28th March, 1969. The debit balance on the dale of transfer was Rs.2.46.959.27 From time to lime the plaintiffs account was credited with the amount of dividend received on the equity shares that had been pledged as security. The account of the defendant was debited w ith interest '"that accrued @ 15% per annum with quarterly rests and 2% per annum as penal interest. The defendants despite several assurances and promises to pay and liquidate the amount, did not do so and the account remained irregular The defendants have admitted the liability in writing number of times. The plaintiff there upon instituted the suit for recovery of Rs. 5,79,617.46 as stated.

(3.) The defendants were duly served in the suit and filed the written statement. wherein they denied that the plaint has been signed and verified and the suit instituted by a competent person. The defendants did not dispute the grant of credit and overdraft faciities and admitted the pledging of the equity shares. It was claimed that 18,600 equity share, had been pledged as security. The defendants disputed the correctness of the debit to their account on transfer, on the ground that the plaintiff bank had charged exorbitant interest at penal rates. The defendants contended that the plaintiff bank was to charge simple interest @ 9% per annum and not 15% interest per annum with quarterly rests or penal interest. The defendants denied that the plaintiff bank was entitled to sell the pledged shares.