S SHANMUGHASUNDARAM Vs. INDIAN OVERSEAS BANK

JUDGEMENT

(1.) THE defendant has preferred the appeal challenging the judgment and decree dated 19. 2. 1999 made in O. S. No. 531 of 1995 on the file of the Court of the additional Subordinate Judge, Erode.

(2.) THE respondent herein filed the suit seeking for a Decree directing the defendant to pay the plaintiff Bank a sum of Rs. 3,53,547-95/- with subsequent interest thereon at 26% per annum from the date of suit till the date of realisation and for costs of the suit. The case of the plaintiff Bank is that the defendant is doing business in running a Boarding and Lodging under the name and style of "sri Ram Lodge" and on 16. 7. 1990, he opened the account at the regulated Market Extension Counter of the plaintiff Bank at Erode under Current account No. 149 and from then onwards, he was depositing amounts on various dates and withdrawing the same by issuing cheques on the Extension Counter and he also availed overdraft facility in the current account. It is further stated in the plaint that the defendant used to issue cheques and to credit the amount with credit challan in duplicate and the main challan would be kept in the bank and the counterfoil handed over to the defendant as acknowledgement for receipt of the amount and the plaintiff Bank has produced three cheques and three credit challans for the relevant period in the suit. According to the plaintiff Bank, on 17. 9. 1992 it was found that the large amount of overdraft facility was allowed to the defendant and notice of demand dated 10. 4. 1993 was issued to the defendant calling upon him to clear the balance outstanding in the account and he failed to respond or clear the dues and again on 4. 4. 1994, another registered notice was sent by the plaintiff Bank to the defendant and though he received the notice on 5. 4. 1994, he neither sent reply nor complied with the demand and hence, the suit. It is further stated in the plaint that the defendant is bound to pay interest at 26% per annum from the date of suit till the date of realisation since the transaction is commercial one and the defendant is not entitled to the benefits of the Debts Relief Act.

(3.) THE defendant in his written statement admitted that he had a current account with the Regulated Market Extension Counter of the plaintiff Bank at erode and he has stated that he was not granted with any overdraft facility and he did not avail himself of such facility and he does not owe any amount to the plaintiff Bank. According to the defendant, T. C. Sengappa and P. Manivannan working as Assistant Manager (in-charge) and Clerk respectively at the plaintiff bank were charged with the alleged offences of conspiracy, cheating, falsification of accounts, etc. and also under the Prevention of Corruption Act and they were sentenced to undergo imprisonment and to pay fine. It is further stated by the defendant that the plaintiff Bank, which faces huge loss, is resorting to file suits like present one in a desperate attempt to minimise the loss. It is further stated by the defendant that the period of limitation cannot be computed from 31. 12. 1992 and the suit is barred by limitation. According to the defendant, he was under the impression that it was not necessary to make any reply to the notice of demand since police investigation was going on against the Officers mentioned above.