SYNDICATE BANK Vs. WEST BENGAL CEMENTS LIMITED

JUDGEMENT

(1.) The plaintiff, Syndicate Bank, has filed this suit for recovery of Rs. 33,39,026.75p. The case as set up in the plaint is that the bank amongst various other facilities sanctioned overdraft limit of Rs. 10,00,000.00 to defendant 1 company against hypothecation of fiat cars, jeeps and commercial vehicles. The defendants, in consideration of the said overdraft limit, executed a demand promissory note dated 2- 2-1972 for said sum of Rs. 10,00,000.00 carrying interest at 10% per annum for the time being. The defendants also executed further documents as set out in the plaint and availed of the said overdraft limits of Rs. 10,00,000.00. The defendants acknowledged their liabilities in writing to the extent of Rs. 11,83.327.95 p. as on 31st of December, 1974 by acknowledgment of debt dated 31st of January, 1975. It is further claimed that in spite of acknowledgment of liability the defendants failed to deposit money in the said over draft account and when called upon to deposit the sale proceeds of the hypothecated vehicles, the defendants stated that the same had been utilised elsewhere and they were not in a position to pay the same to the bank. By Resolution dated 7th of January, l977,defendants again acknowledged their liabilities in respect of the said overdraft account. Once again by Resolution dated 14th of November, 1977 the defendants acknowledged their liabilities in respect of the said overdraft account and also confirmed the previous acknowledgment dated 31st of January, 1975. By acknowledgment of debt dated 16th of November, 1977 defendants admitted their liabilities to the extent of Rs. 17,38,401.85p. as on 31st of December, 1976 with interest thereon from 1st of January, 1977 under the promissory note dated 2nd of February, 1972. The defendants failed to pay anything despite the bank writing numerous letters to them. The bank further claims that originally the rate of interest was 10% per annum and because of enhancement in the bank rate, by Reserve Bank of India, the interest chargeable from the defendants also stood enhanced and the defendants had agreed to be bound by the various rules and regulations of the bank regarding enhancement of interest and the same has been charged at the rate of 16% per annum and has been computed accordingly in the statement of account filed in the suit. Accordingly it is claimed that a sum of Rs. 33,39,826.75 p. is due from and payable by the defendants to (he bank.

(2.) The written statement on behalf of defendant 1 was filed about four years after service of summons on the said defendant. Although adjournment was taken to file written statement on behalf of other defendants but no written statement was filed. The plea taken by the defendant 1 in the written statement is that the said defendant became a sick unit and as such is no- liable to pay any interest. The averments made in the plaint were not specifically controverted as required by R. 5 of 0. 8 of Code of Civil Procedure. The rate of interest was also not specifically controverted nor execution of the-various documents. The substance of the plea of defendant 1 is given in additional pleas in the written statement in the following words:

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