OMAN INTERNATIONAL BANK SAOG Vs. DAWOOD & CO

JUDGEMENT

(1.) Plaintiffs have filed the suit against the present defendants based on two letters of guarantee which are Exhibit "A" and Exhibit "B" to the plaint. It is the contention of the plaintiffs that defendant Nos.1 and 2 stood as guarantors in respect of loans advanced to members of Jeevan Vikas Co-operative Cottage Leather Industries Ltd. In terms of the Letter of Guarantee the liability of the guarantors was not to exceed Rs.3.00 crores together with interest as stipulated therein. By virtue of Clause 11 on service in writing under the hand of the Manager, Sub-Assistant Manager or other Officer of the bank stating the amount at any particular time due and payable to it under the guarantee, was to be conclusive evidence of the amount dues. By virtue of Clause 13 the guarantor agreed that the demand mentioned above shall be deemed to have been made by the bank on the guarantor if it is made in writing and addressed and sent to the guarantor by Registered Post A.D. at the Guarantor's last known address. The names of the members of the Co-operative bank to whom the loans were advanced are at Exhibit "C". Exhibits "F" and "G" are the certificates setting out the amounts due and outstanding as on 28th November, 1996. The plaintiffs in the particulars of claim have claimed principal amount along with interest at 12% per annum.

(2.) On Summons for Judgment being taken out which is supported by an affidavit the defendants have filed their reply. In the reply various defences have been raised. It is principally contended that the agreement based on which the Summary Suit is filed could not be the basis on which the Summary Suit would lie. In the guarantees, it is contended, the number of Cobblers to whom loans were to be given is set out as 1200 and loan amount as Rs.3.00 crores. In the suit filed the plaintiffs have claimed that loans were advanced to 800 cobblers and the amount advanced was Rs.2.00 crores and that the figures in the guarantee were written through inadvertence. It is contended that unless the guarantee itself is rectified on the ground of mutual mistake no summary suit would lie on the guarantee. It is also contended that in the year 1994 the defendant No.2 who has filed an affidavit on his behalf and of defendant Nos.1 and 3, realized that Jeevan Vikas Co-operative Industries Ltd.. was not functioning properly. There were huge over dues. The moneys advanced to the said Co-operative Society were misappropriated by one Mr.Rauf Memon, son of an Ex-Officer of the Income-tax Department, who on his retirement had been engaged by the defendants. On realising the said fraud, it is contended that the defendants stopped dealing with the said Co-operative Society. It is then contended that the guarantees relied upon do not relate to the cause of action in the present suit. It is also specifically set out that the guarantees at Exh."A", "B" is a misused, interpolated, forged and fabricated guarantee. In an additional affidavit dated 16th February, 1999 it is further contended that the guarantees were sent to handwriting expert, who has opined that the signatures on the guarantees are in fact not the signatures of the affiant. Considering the above, it is contended that there are triable issues and the defendants as such should be given unconditional leave to defend.

(3.) Affidavit in rejoinder has been filed on behalf of the bank. It is pointed out that the number of members and the loan is a mistake as the society itself had asked for release of loan for 800 members. Number of members and the amount mentioned in the guarantee is by inadvertence. It is further pointed out that the guarantees are stamped in 1993 and have nothing to do with the previous loans for which the defendants had stood as guarantors for the said society. Both parties have cited judgments in support of their respective contention. I may at this stage, before proceeding further, point out that in view of the judgment of the Division Bench of this Court in the case of M/s Dawood & Co. & Ors. vs. Bank of Baroda in Appeal No.540 of 1998 in Summons for Judgment No.580 of 1996 in Summary Suit No.2949 of 1996 dated 12th November, 1998 learned Counsel for the defendants contends that though he has raised the same contentions as dealt with in that judgment he does not propose to reiterate the said contentions. He, however, contends that inspite of the said judgment there are still contentions available in respect of which the defendants are entitled to unconditional leave to defend.