CENTRAL BANK OF INDIA Vs. DHIREN TEXTILES

JUDGEMENT

(1.) The plaintiff- Central Bank of India ("Bank" for short) has filed this suit against defendant No.1- M/s.Dhiren Textiles, a partnership firm and defendant Nos.2 and 3 being partners of defendant No.1 for the recovery of their outstanding dues in the sum of Rs.5,79,138.48 under current account of defendant No.1 and also claimed future interest thereon from the date of suit till realisation.

(2.) It is the case of the plaintiff that since May 1988 the plaintiff- Bank, in their ordinary and regular course of banking business, was maintaining a current account in the name of defendant No.1 in its Buleshwar Branch. At the request of the defendants, the Bank permitted them to make withdrawals in the current account against the cheques which had been deposited by them for collection with the Bank in their current account. Such withdrawals were permitted by the Bank even before the cheques so deposited for collection were cleared and the proceeds thereof received by the Bank on behalf of the defendants. It is further case of the plaintiff- Bank that specifically at the request of the defendants said withdrawals were permitted by the bank as and by way of overdraft and the amounts so permitted to be withdrawn under the current account by the defendants were in the nature of loans and advances granted by the Bank to the defendants, which the defendants were bound and liable to repay to the Bank with interest.

(3.) It is the case of the plaintiff that by such withdrawals and the temporary overdraft granted by the plaintiff bank to the defendants under the said current account and by reason of the cheques deposited for collection not being realised, the said current account became overdrawn. That as on 21st October, 1988, a sum of Rs.4,30,992.97 was overdrawn and stood to the defendants debit under the said current account. The defendants by their letter of acknowledgment have acknowledged their liability to the Bank in the said amount as on 21st October, 1988 and agreed and undertaken to pay the same with interest within three months. In consideration of the plaintiff- Bank having permitted the said overdrawings to be made by the defendants in the said current account and in order to secure repayment thereof the defendants have executed, in favour plaintiff- Bank, a promissory note for Rs.4,30,992.97 duly signed by defendant Nos.2 and 3 as partners of defendant No.1 as also in their individual capacity; a letter of continuing security; and a letter of partnership to the effect that defendant Nos.2 and 3 being partners are liable to the plaintiff s dues, all dated 21st October, 1988. By further letter dated 19th December, 1988, the defendants have agreed and undertaken to make payment of their above mentioned dues to the Bank. Accordingly, the plaintiff- Bank continued to maintain the said account in the name of defendant No.1.