OM PRAKASH Vs. UCO BANK

JUDGEMENT

(1.) This appeal is filed by the guarantors challenging the decree passed in favour of bank against the borrower and guarantors. Appellants submitted that the suit filed by the bank is barred by limitation and therefore the suit deserves to be dismissed.

(2.) Facts of the case are that respondent No. 1 Bank has filed a civil suit against all the defendants i.e. borrower and guarantors for recovery of Rs.1,17,000/- and interest at the rate of 16.5% p.a. from the quarterly rates as per the rate fixed by the Reserve Bank of India. It was also prayed that the property of defendants No. 3 and 4 be auctioned and decretal amount be recovered. Loan was taken by Rishabhchand Jain S/o defendant Nos. 1 and 2 and the application for term loan and cash credit was submitted on 16-12-88. Bank has decided to grant loan to said Rishabhchand Jain on 1-1-1989. Rishabhchand Jain on 2-3-1989 was given a loan of Rs. 34,000/- for manufacture of his product and on 2-3-1989 facility of cash credit of Rs. 28,000/- (working capital) was given. Said Rishabhchand Jain utilised the facility w.e.f. 3-3-1989 and 10-3-1989. Rishabhchand Jain died on 2-11-1995. Defendants No. 1 and 2 have received the property of the deceased i.e. machinery and stock of the firm. Therefore, defendants No. 1 and 2 are the necessary parties. Defendants No. 3 and 4 stood guarantor for the loan of said Rishabhchand Jain. Borrower has admitted and acknowledged the loan on 1-4-1992 for renewal of loan on 24-7-1992 and on 26-2-1994 and signed the documents and handed over to the bank. Rishabhchand Jain has also agreed to extend the loan facility and submitted the guarantee of Defendant No. 5 Radheshyam Rathore. Documents of extension was executed on 1-4-1992, 24-7-97 and 26-2-1994. Borrower Rishabhchand Jain died on 2-11-1995. Since the amount was not paid then the notice was issued on 9-9-1996 and in spite of notice since the amount was not paid suit was filed.

(3.) In written statement main plea about limitation of suit has been raised. This appeal is filed by the guarantors Defendants No. 3 and 4. only ground urged by the appellant/guarantors is that the suit is barred by limitation. The loan was given to said Rishabhchand Jain on 2-3-1989 and Rishabhchand died on 2-11-1995. It is contended by the counsel for guarantors that it was the duty of the bank to sale the hypothecated goods and thereafter balance amount, if any is liable to be recovered. Even otherwise suit as filed is barred by limitation. Counsel for the appellants submitted that the loan was taken in the year 1989 and the said loan was extended from time to time, but the extension of period was without the consent of the guarantor. It is further contended that mere deposit of amount in the Bank in the name of borrower will not bring suit within limitation. It is contended by the appellants that any person can deposit the amount in the account of borrower but the deposit by the borrower must be proved by the bank and under the Banker's Books Evidence Act, 1891 it was the duty of bank to prove that the amount was deposited by the borrower in his account. He submitted that the deposit of amount of Rs. 300/- on 10-1-1994 in account vide Ex.P/1 and Rs. 200/- on 26-3-1994 vide Ex.P/2 must be proved by the bank. He submitted that the said deposit is not sufficient to extend limitation unless bank has proved that the said deposit was by the borrower in acknowledging the loan.