UNIT TRUST OF INDIA Vs. INDIAN OVERSEAS BANK

JUDGEMENT

(1.) THIS revision petition is filed by a public limited company against the order passed by the Sub Court, Kottayam in I. A. No. 512 of 2000 in O. S. No. 455 of 1993. The revision petitioners are defendants 4 and 5 in the suit. The suit was filed by the first respondent for realization of an amount of Rs. 1,27,984/- from the defendants. As per the plaint averments, the plaintiff wanted to realize the amount due from defendants 1 and 2. Defendants 1 and 2 available a loan of Rs. 75,000/- from the first respondent bank, plaintiff in the suit, for domestic purpose on 10. 5. 1990, on executing a demand promissory note in favour of the plaintiff, promising to pay off the said amount on demand with interest at the rate of 17. 5% per annum. It is also averred in the plaint that as security for the loan defendants 1 and 2 secured Unit Certificate No. 672307690 of the revision petitioners, valued for Rs. One lakh as constituted by 1000 units of Rs. 100/- each. Since defendants 1 and 2 made default in repayment of the loan amount, the plaintiff bank informed the matter to the revision petitioners. Thereafter, the Certificate pledged by defendants 1 and 2 along with Authorization Letter were forwarded to Unit Trust of India, Madras, 5th defendant, under registered post requesting them to re-purchase the units and to remit the proceeds to the plaintiff bank for liquidating the outstandings in the loan account of defendants 1 and 2. The authorization made in favour of the plaintiff by defendants 1 and 2 was witnessed by the plaintiff's Assistant Manager and another senior staff. Since the proceeds were not forthcoming from the fifth defendant, the plaintiff reminded them on various dates such as 23. 4. 1991, 4. 8. 1991, 15. 4. 1992 and 19. 5. 1992. Even after the reminders, there was no reply from the fifth defendant or any remittance of proceeds by them. Hence, the then Senior Manager of the plaintiff visited the office of the fifth defendant at Madras and it was found that the authorization made in favour of Indian Overseas Bank was scored of cross-wise and the name of Canara Bank, Kottayam, the sixth defendant, with Savings Bank Account No. 21094/37 was interpolated.

(2.) DEFENDANTS 1 and 2 were introduced to the plaintiff by Mr. Aniyan Athikayam, the third defendant. He is the father of the second defendant Mrs. Anitha Abraham John. Mr. Aniyan Athikayam is dealing with the plaintiff for the past several years and he is credit worthy also. The plaintiff informed the above incidents to the third defendant and he promised to adjust the account shortly. Hence, for the definite repayment of the loan with interest, on 29. 9. 1992 he executed a Guarantee letter in favour of the plaintiff guaranteeing the payment of all monies which shall at any time thereafter during the continuance of the said guarantee be due from defendants 1 and 2. Since the authorization/endorsement was witnessed by the plaintiff's Assistant Manager and another senior staff with IOB Address, that portion is seen left undisturbed. Since no authentication or alteration was made by the plaintiff, the interpolation was made by the Unit Trust of India, Madras, the fifth defendant, within the connivance of defendants 1 and 2 for getting unlawful gain. It was further understood that the Unit Trust of India, Madras had issued four cheques numbering 20/4188 to 4191 for Rs. 23,000/- each and dispatched on 7. 2. 1992 vide registered post. The cheques were drawn on Canara Bank, Kottayam marked payable at par in the name of the beneficiaries, namely, defendants 1 and 2, quoting SB Account No. 21094/37. Only to establish the said fact, Canara Bank, Kottayam is made a formal party in this suit. It was further understood from Canara Bank, Kottayam, the sixth defendant, that the four cheques referred above amounting to Rs. One lakh were credited in defendants 1 and 2's SB Account No. 21094/37 on 12. 2. 1992 and the proceeds were withdrawn by defendants 1 and 2. Since Unit Trust of India, Madras, the fifth defendant has also joined in committing fraud, fourth and fifth defendants are jointly and severally liable for the plaint amount along with defendants 1, 2 and 3. Hence the plaintiff Bank filed the suit for recovery of a total amount of Rs. 1,24,636/- as the amount outstanding in the name of defendants 1 and 2.

(3.) THE revision petitioners being entrusted with the Certificates, they were made parties to the suit. The revision petitioners were represented before the lower court by counsel. But the revision petitioners were declared exparte and a decree against the revision petitioners and other defendants was passed on 30. 11. 1995. The decree holder filed E. P. No. 177 of 1997 in O. S. No. 455 of 1993 for execution of the decree. On receiving notice in the execution petition, the revision petitioners filed I. A. No. 510 of 2000 for setting aside the exparte decree and I. A. No. 512 of 2000 for condoning the delay in filing the petition for setting aside the exparte decree. I. A. No. 512 of 2000 was dismissed by the court below. Consequently, I. A. No. 510 of 2000, "the revision petitioners filed this revision.