STATE BANK OF INDIA Vs. N SATHIAH

JUDGEMENT

(1.) These appeals are preferred by State Bank of India, Arantangi Branch against the judgments in O.S. Nos. 9, 10, 12 and 11 of 1978 on the file of Sub-Court, Pudukottal. The said suits were filed for recovery of amounts due and payable by the respective defendants based on amounts borrowed by them by executing promissory notes and pledging their jewels on different dates agreeing to pay interest at 2% above State Bank of India advance rate with a minimum of 12% p.a. with quarterly rests. The loans were payable on demand. As Head Office of the Plaintiff Bank at Madras entertained suspicion on a large number of loans taken by one Sathiah, in July, 1975 a detailed verification of ornaments pledged by him, his relatives and associates of whom the defendants happened to be some; it was found that spurious jewels have been deposited, and therefore complaints were lodged with Arantangi Police, who investigated the matter and the same is pending. The jewels were seized by the Police along with the original promissory notes. Without prejudice to the rights of plaintiff to proceed by way of sale of pledged articles, as and when they are returned to the plaintiff by the Criminal Court the suits were filed, based on promissory notes, because in spite of reminders, no amount had been paid so far by defendants.

(2.) The defence taken was that, plaintiff has no right in law to base the cause of action on the promissory notes executed by way of security since the original cause of action was on pledge of gold jewels, and the relationship between the parties was based on contracts of pledge. Defendants are entitled to the return of specie i.e. with weight and description of jewels conforming to the details noted and accepted by the plaintiff Bank on various dates of pledges. Defendants have an obligation to pay the loan with interest, and in turn have a right to get back the jewels after satisfying the accepted descriptions at the time of the contract. Plaintiffs agent and other Officers noted down the quality of the jewel, the weight of the jewel, etc. in pencil in the respective demand promissory notes. Only genuine jewels have been pledged, and to cover up misdeeds committed by the Officers of the Bank, one of them gave a designedly false complaint to the Police. Defendants are prepared to pay the principal and interest up to date, only provided the plaintiff returns the items of jewels. If a decree is to be passed against the amounts covered by the suit items, it should be provided in the decree that the plaintiff is entitled to recover that amount, only on returning the jewels covered by the suit items. The defendants reserve their right to file separate suits after proving in the criminal case that they pledged only genuine jewels.

(3.) The trial Court while taking note of the fact that the defendants are prepared to pay the principal and interest up to date and also to avoid multiplicity of proceedings, decreed the suit as prayed for, on condition that the plaintiff should deposit the gold ornaments into Court within three months as per the description, weight, etc. mentioned in the Gold Loan Demand Register available with it, and that after satisfying the decree, the respective defendants are entitled to get back the pledged gold jewels from the Court, on payment of necessary Court-fees.