INDIAN OVERSEAS BANK HAVING ITS OFFICE AT NO 806 MOUNT ROAD MADRAS 600 002 AND CARRYING ON BUSINESS INTER ALIA AT 477 KILPAUK GARDEN ROAD KILPAUK MADRAS Vs. BISMILLA TRADING CO HAVING ITS OFFICE AT NO 106 LINGHI CHETTY ST MADRAS 1 AND

JUDGEMENT

(1.) THE defendant is the appellant. THE respondent herein, as plaintiff, filed a suit in C.S.No.561 of 1984 on the file of the High Court against the appellant/defendant, praying the court to grant a decree against the appellant/defendant for a sum of Rs. 12,43,240.93 together with interest at 19.5% thereon from the date of the suit till realisation.

(2.) THE case of the respondent/plaintiff is that it had a cash credit facility to the extent of Rs.17 lakhs with the appellant/defendant Bank since 26.3.1983 and for which, as directed by the defendant, the plaintiff gave a Fixed Deposit of Rs.25 lakhs to the defendant. Apart from that, it had also hypothecated its stocks in trade worth more than Rs.l crore with the defendant by way of security for repayment of loan. It is the case of the respondent/plaintiff that the defendant without any reason whatsoever, dishonoured three cheques issued by it viz., [a] Cheque No.0577368 dated 2.9.83 for a sum of Rs.29,645; [b] Cheque No.0577369 dated 2.9.83 for Rs.55,317.50 and [c] Cheque No.0577362 dated 29.8.83 for a sum of Rs.2,102.50. When the plaintiff enquired as to the reason for dishonouring of those cheques, the defendant replied that it was because of the closure of plaintiff s accounts. As far as the plaintiff is concerned, it never stopped the operations in the cash credit account. It is the case of the pl aintiff that the defendant had no business to act unilaterally in dishonouring the cheques issued by the plaintiff, when the credit facility was in force, backed by huge security. THE plea of the plaintiff is that' consequent of such dishonouring of the cheques, the plaintiff's reputation was jeopardised heavily and its business was totally paralysed. THE plaintiff would contend that since it had sufficient funds in its account, the defendant could not have returned the cheques and because of such illeg al act, the plaintiff had suffered damages to the tune of several lakhs since its name was defamed. THE plaintiff claimed that the defendant is liable to pay huge damages, but however, it restricted its claims to Rs. 1,00,000. THE further contention of the plaintiff is that due to such unilateral, high-handed and illegal action of stopping operation of the accounts, the business of the plaintiff was wrecked and in fact, the plaintiff was making profit of not less than Rs. 1,00,000 per month and that roughly the plaintiff had suffered a business loss of Rs. 10,00,000. THE plaintiff, on 4.9.1983, wrote a letter to the defendant, calling upon him to adjust the Fixed Deposit amounts as against the loan due and payable by it and s ettle its whole account. But however, the defendant took its own sweet time to close the account and in fact, the account was closed on 8.1.1984. That being so, neither in law, nor in equity, the defendant was entitled to charge interest and debit the same to the plaintiff's account and consequently, the defendant is bound to pay a sum. of Rs.81,406.10 to the plaintiff. THE plaintiff also questioned the correctness of the statement of accounts sent by the defendant inasmuch as the defendant had debited interest to the tune of Rs.29,317 towards the charge on cheques against clearance. THE plaintiff claims that this amount should also be refunded. THE further case of the plaintiff is that the defendant had debited another unlawful charge of Rs.100 towards lawyer's notice, which amount, the plaintiff was not liable to pay. On the above basis, the plaintiff claimed that the defendant owed a sum of Rs.12,10,895.10.

(3.) AT this juncture, it may be mentioned for the purpose of completeness that the respondent/plaintiff did not file any appeal or any cross-objection in respect of disallowed claim.