DENA BANK Vs. GLORPHIS JAMES

JUDGEMENT

(1.) THIS is an appeal by the plaintiff. Suit is for recovery of money. Under three heads, plaintiff instituted the suit. Defendants have borrowed money from the plaintiff/bank under bill purchase account, hypothecation account and cash credit pledge. We are now concerned in this appeal only with regard to the decree that has been denied on cash credit pledge. In regard to the other two items, a decree has been granted by the trial court and the defendants have not filed any appeal and that part of the decree has become final.

(2.) AS regards the cash credit pledge, only a short point that has to be considered in this case. The case of the plaintiff/bank is that an amount of Rs. 3,83,906/- is to be realised from defendants 1 and 2 under cash credit facility with interest at the rate of 18. 5%. The transaction is admitted by defendants 1 and 2. This amount was advanced on the security of a key loan pledge of certain goods - paints.

(3.) THE trial court, after considering the various aspects of the matter found that the plaintiff is not entitled to a decree for the amount claimed under the cash credit facility, since the Bank was not able to re-deliver the articles pledged under that business head. In considering this aspect of the matter, the. Trial court observed that the Bank is in the position of a bailer and the Bank has not taken the proper care that was expected of a bailer and in that event, the Bank has no entitlement to get a decree. THE exemption clause in the agreement of pledge also was considered by the trial court. But the trial court held that the exemption clause will not be potent enough to exonerate the liability of the plaintiff/bank as a bailer under Ss. 151 and 152 of the Contract Act, For this, the trial court relied on the decision reported in 1967 SC 1322 (Lallan Prasad v. Rahmat Ali ). Of course, in that decision, the Supreme Court, has said, relying on certain English decisions, that the pledge cannot maintain a suit for recovery of debt and retention of the pledged property.