HARBANS LAL Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) THE plaintiff has sued the defendant for a decree in the sum of Rs. 86,08,947 with costs along with decree for interest pendente lite and the future interest.

(2.) THE case of the plaintiff is that the premises at A-28A, Ring Road Market, Rajouri Garden, New Delhi consisting of basement, ground floor, first floor, mezzanine floor, and second floor with total built up area of 5017.3 sq. ft. (hereafter suit premises.) was given on lease to the erstwhile New Bank of India (NBI) for their Rajouri Garden Branch by the partnership firm of M/s Plywood Palace of which the plaintiff Harbans Lal was a partner. The lease deed was dated 1st July 1983. The rent was fixed at Rs. 24,503.17p. per month. The initial lease period of five years came to an end on 30th June 1988. A term of the lease was that if any loan was availed of by the firm, NBI would be entitled to appropriate the monthly rent towards the adjustment of the loan amount. It appears that on 7th December 1982 M/s. Plywood Palace was sanctioned by the NBI a cash credit loan facility and a demand draft up to a limit of Rs. 7,50,000/. As security the title deeds of the suit premises by way of equitable mortgage were deposited with the NBI on 25th February 1983. A cash credit facility of Rs. 2,00,000/- was sanctioned in 1986. By a letter dated 2nd April 1986 addressed to the Manager, NBI, the partner of M/s Plywood Palace declared that it had no other lease or document relating to the suit premises and that the property was free from encumbrances. With effect from 29th March 1988 the loan, and correspondingly the value of the mortgage charge, was increased to Rs. 10 lakhs. Clause 3 of the original lease deed had a renewal option. Accordingly the lease was renewed and the rent was revised from Rs. 28,175/- per month for the period from 1st July 1988 till 30th June 1993.

(3.) AT this stage it requires to be noticed that on 22nd October 1996 PNB filed Suit No.279 of 1996 against the plaintiff in the Court of the Additional District Judge (ADJ) under Order 34 CPC for recovery of Rs. 3,43,880.25 together with pendent lite and future interest at 22.75% per annum at quarterly rests. PNB claimed that the plaintiff had signed a bank balance and security letter on 21st October 1993 confirming that as on 30th September 1993 a sum of Rs. 7,19,621 was due to PNB. As on 19th October 1996 Rs. 3,43,880.25 was due. This was calculated by charging interest at quarterly rests at 22% per annum. In his written statement dated 27th May 1997, the plaintiff herein denied having signed any such balance and security confirmation letter dated 21st October 1993. Further it was pointed out that PNB had to give benefit of rent at the rate of Rs. 24,500 per month for the months of September and October 1983 and January and February 2004 and at the rate of Rs. 28,175 per month for the months of May and June 1990 working out to Rs. 1,54,350. If interest @16.5% was allowed for the entire period, the total amount payable to the plaintiff herein would be much more than the amount claimed in the suit.