INDIAN BANK Vs. B PATNAIK MINES PRIVATE LIMITED

JUDGEMENT

(1.) The Indian Bank as Plaintiff filed Money Suit No. 159 of 1977 for recovery of Rs. 3,11,500.43 with interest pendente lite and future and for other ancillary reliefs based on a Demand Promissory Note coupled with a deed of mortgage and other collateral documents duly executed by the defendants in favour of the Bank.

(2.) Bereft of all unnecessary details, the facts averred in the plaint which are necessary for effectual adjudication are :- Defendant No. 1, a Private Limited Company of which defendants 2 to 5 are the Directors, approached the plaintiff, which is a Nationalised Bank, for a cash credit loan in the year 1959. After examining the viability, the plaintiff-Bank agreed to advance a cash-credit loan to a tune of Rs. 9 lakhs to the defendants. As collateral security, defendant No. 1-Company mortgaged all its assets to the Bank and created a charge in accordance with Sections 125 to 130 of the Companies Act on 2/07/1960. Defendants 2 to 5 executed a Demand Promissory Note and other documents and made themselves liable as co-obligators. There was regular transaction with the bank and the defendants executed documents acknowledging the balance outstanding in the account time and again. The last document was executed on 17/04/1974 accepting the liability of Rs. 2,50,000.00 for open cash credit account and Rupees 1,75,000.00 by hypothecation on demand cash-credit account. The total amount due from the defendants with interest till 31/03/1977 was Rs. 3,11,300.00 as per the details or the accounts enclosed and made part of the plaint. Along with the plaint the loan documents executed by the defendants were filed in support of the averments made. It was specifically averred in the plaint that the outstanding loan amount was not time-barred and it was prayed to pass a decree against all the defendants for realisation of the suit amount. Two sets of written statements have been filed by the defendants, one by defendant No. 1-Company represented through the liquidator, and the other by defendants 2 and3.

(3.) It is pertinent to mention here that before filing of the suit, the Company came under liquidation and Company Act Case No. 12 of 1978 was filed in this Court. It would be evident from Ext. 2 dated 27/11/1978, the order passed by this Court in the Company Act Case, that on the basis of the petition filed by the Plaintiff-Bank and on the basis of the undertaking filed in Court, permission was accorded to the Bank to proceed with the suit (M.S. No. 159/77) subject to the condition that it will not be open to the Bank to execute the decree without leave of this Court.