CANARA BANK MANNARKKAD Vs. BHAVANI OIL COMPANY CHEMMANNUR

JUDGEMENT

(1.) This appeal is filed by the plaintiff - Canara Bank against the judgment and decree in O.S. No. 80 of 1988 of the Sub Court, Ottappalam. Defendants are four in number, the first defendant being a Partnership Firm.

(2.) According to the plaintiff - Bank, the Firm was being advanced amounts by way of loan by the Bank and the Firm was its standing customer. In pursuance of the request of the Firm, the plaintiff - Bank permitted the said Firm to avail of an open cash credit loan of Rs. 1 lakh. Among the documents executed in respect of the loan, as security for the loan, an agreement, which is marked Ext. A4 by which the defendants hypothecated such movables as stocks of raw materials like vettiver roots and other belongs to the Firm which includes movables shown in A Schedule item to the plaint while there are other documents, was also executed. But we are not concerned with that now in this case.

(3.) The main argument raised in this case is regarding the loss of a barrel of vettiver oil. The Firm consigned one barrel of vettiver oil manufactured by it to Mysore. According to the plaintiff, about 220 Kgs. of the said oil were returned by the consignees on the ground that it was adulterated. Thereafter, the defendant as Managing Partner of the Firm, requested the plaintiff - Bank by letter dated 17.5.1985 to take the returned consignment of oil in its custody, as the godown of the Firm had to be vacated on or before 4.6.1985. The second defendant also informed the Bank by this letter that the Firm will be taking necessary steps to get the said goods marketed at the earliest and that the custody by the Bank of the said oil was entirely at the risk and responsibility of the Firm. According to the plaintiff, as the said quantity of oil was in fact part of the hypothecation and on the basis of the above letter dated 17.5.1985, which is produced as Ext. A26 in this case, the Bank took the oil in custody and kept it in the Bank premises. Subsequently, when the Bank shifted to its new premises in early 1986, the said oil was transferred to in the annexure building leased by the Bank for storage and other purposes.