CORPORATION BANK Vs. RAMA INDUSTRIES

JUDGEMENT

(1.) The claim made by the plaintiff in the suit is admitted and a statement has been made that the suit may be decreed but have claimed concession in interest. The only point thus left is about the rate of interest after the institution of the suit.

(2.) Briefly, the facts are that plaintiff a Banking Corporate Body filed this suit for recovery of Rs. 5,67,285.72 P. on 22.5.1986. Defendant NO. 1 is a partnership firm and defendants 2 to 5 are its partners. The defendants for promoting their business had approached the plaintiff bank for Cash Credit facility and for that purpose the defendants had submitted application dated 13.10.93. Cash Credit facility of Rs. 2,50,000.00 was sanctioned for which various documents including a promissory note and the deed of hypothecation of their goods. The defendants duly availed this facility. Another facility of Rs. 40,000.00 was allowed on 19.11.1983 when the defendants had represented that they had to discharge the liability of Haryana State Industrial Development Corporation (HSIDC) and would create a mortgage on their property on discharge of their liability. This facility was availed but that mortgage was not created. First facility carried interest @ 6.5% per annum above the Reserve Bank of India rate subject to a minimum of 16.5% per annum compounded quarterly while in the second interest payable was 8.5% per annum above the Reserve Bank of India rate with a minimum of 18.5% p.a. and further over due interest @ 2% per annum. The defendants failed to make payments inspite of various letters/notices of demand. In the first facility a sum of Rs. 5,09,563.47 and in the second a sum of Rs. 57,722.25P. i.e. in all Rs. 5,67,285.72 P. became due on 20.5.1986 and this suit was instituted for recovery of these dues.

(3.) Written statement was filed on behalf of the defendants on 9.12.1986, raising various pleas legal and on fact disputing their liability. Even the constitution of the plaintiff as a Corporate Body was disputed and on merit it was inter alia stated t hat the signatures had been obained on blank forms and that those documents have been mis-utilised. However, availing of the facility was not disputed. Later on, defendants 2, 4 and 5 came with the plea that they had not signed the earlier written statement and wanted to file a fresh written statement. After the institution of the suit some payments have been made. Detailed facts and circumstances are noticed below. On various dates defendant No. 3 had promised to clear the liability but failed to do so. The matter has been prolonged and dragged for 12 years. Now the defendants contend that they are not liable to pay any interest or in any case not more than 6% p.a. and the learned counsel for the parties have stated that this controversy may be resolved by this Court.