IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO. 1492 OF 1990 SUIT NO. 1492 OF 1990 SUIT NO. 1492 OF 1990 BANK OF BARODA, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act V of 1970, having its Head Office at Mandvi, Baroda 390 006, and a Branch amongst others at 375/382, Mangaldas Market, 1st Floor, Kitchen Garden Lane, Bombay- 400 002. ... Plaintiff. V/s. 1. SHREE MOTI INDUSTRIES, a partnership firm, carrying on business and having its office at 395, Kalbadevi Road, Ruia Building, 5th Floor, Bombay- 400 002. 2. ALOK KUMAR GIRDHARILAL BAJORIA, of Bombay, Indian Inhabitant, carrying on business at 395, Kalbadevi Road, Ruia Building, 5th Floor, Bombay- 400 002. 3. VIMAL KUMAR SHREERAM BAJORIA, of Bombay, Indian Inhabitant, carrying on business at 395, Kalbadevi Road, Ruia Building, 5th Floor, Bombay- 400 002. 4. ANANT KUMAR GIRDHARILAL BAJORIA, of Bombay, Indian Inhabitant, carrying on business at 395, Kalbadevi Road, Ruia Building, 5th Floor, Bombay- 400 002. 5. GIRDHARILAL BAJORIA, Indian Inhabitant, resident at 187A, New Station Road, Hind Motors, Calcutta and carrying on business at 40, Strand Road, Room No.43B, 2nd Floor, Calcutta- 700 001. ... Defendants. O.Mohandas i/b. Little & Co. for the plaintiff. None for the defendants. CORAM : V.C.DAGA, J. CORAM : V.C.DAGA, J. CORAM : V.C.DAGA, J. Reserved on : 5th March 2008 Reserved on : 5th March 2008 Reserved on : 5th March 2008 Pronounced on : 13th May 2008 Pronounced on : 13th May 2008 Pronounced on : 13th May 2008 JUDGMENT : JUDGMENT : JUDGMENT : -------- -------- -------- . The plaintiff- Bank of Baroda ("Bank" for short) has filed this suit against the defendants for the recovery of their outstanding dues with claim for future interest thereon from the date of suit till realisation. The Facts : The Facts : The Facts : --------- --------- --------- 2. According to the plaint allegations, the defendant No.1 is a partnership firm of which defendant Nos.2 to 4 are the partners. Defendant No.5 is the father of defendant Nos.2 and 4, who has guaranteed the credit facilities advanced by the - 3 - plaintiff to the defendant No.1. Plaintiff’s Case : Plaintiff’s Case : Plaintiff’s Case : ---------------- ---------------- ---------------- 3. According to the plaintiff- bank, in the month of April, 1984, the Bank had advanced Cash Credit facility to the defendant No.1 in the sum of Rs.2,50,000/- on its executing necessary loan documents in favour of the plaintiff on 31st March, 1987; such as demand promissory note, undertaking not to allow withdrawals of loan and deposits obtained by it from its customers or relatives; deed of hypothecation of goods; letter of continuing security; letter of partnership; and deed of hypothecation of book debts. The plaintiff- Bank has further granted in favour of defendant No.1, the Bills Purchase/ Bills Discounting facility, on execution of the necessary loan documents by it in favour of the plaintiff on 31st March, 1987. The defendant No.1 availed the said bills discounting facility. 4. The defendant No.1, on 5th December, 1988, has again executed similar documents in favour of the plaintiff in respect of a further ad-hoc Cash Credit (Hypothecation) facility in the sum of Rs.1,00,000/-. - 4 - 5. The defendant No.5 on 17th October, 1988 executed deed of guarantee in favour of the plaintiff- Bank guaranteeing repayments of the various loan facilities availed by the defendant Nos.1 to 4 to the extent of Rs.5,00,000/-. 6. That the defendant No.2, with the consent of defendant No.5 deposited on 5th December, 1988 with the plaintiff- Bank, the title deed of the flat No.4, Hari Darshan, Bhayandar (West), Thane, owned by defendant No.5, so as to create equitable mortgage of the said property in favour of the bank. The defendant Nos.1 and 2 by their letter dated 28th February, 1989 have acknowledged their liability towards the plaintiff- bank. 7. According to the plaintiff- Bank since the defendant No.1 firm was irregular in maintaining its loan accounts, the plaintiff by their advocate’s notice dated 30th January, 1990 called upon defendant Nos.1 to 4 to make payment of their outstanding dues with interest thereon. 8. According to the plaintiff, the defendant No.5 vide his letter dated 20th February, 1990 acknowledged liabilities of defendant No.1 as well as its sister - 5 - concern and that on the date of filing of suit, Rs.4,41,610.16 were due and recoverable from the defendants under the Cash Credit (Hypothecation) account, whereas Rs.94,733.35 were due and recoverable under the Bills Purchase/ Bills Discounting facility. The plaintiff, on the above factual matrix, has filed this suit for recovery of their outstanding dues due and recoverable from the defendants in the sum of Rs.5,36,343.51 as on 23rd March, 1990 and sought money decree as well as declaration that movable and immovable properties have been validly charged in favour of the plaintiff- Bank and claimed reliefs in terms of various prayer clauses mentioned in the plaint. 9. It appears that the plaintiff pending final disposal of the suit, had taken out notice of motion for injunction and appointment of Court Receiver with power to sell the mortgaged property. The said motion was made absolute by the learned single Judge of this Court (Shri B.N.Srikrishna, J.) (as he then was) vide order dated 18th February, 1993. However, there is nothing on record to indicate sale of the mortgaged property and realisation of proceeds therefrom. 10. It appears from the record and proceedings - 6 - that initially, Mr.Mahesh N. Vepari, Advocate had appeared for the defendants and filed his Vakalatnama. Writ of summons was served on the defendants through their advocate. However, thereafter, nobody has appeared for the defendants. The suit proceeded ex parte. 11. The plaintiff- Bank was directed to file affidavit of evidence and documents. The plaintiff filed affidavit of its Branch Manager Shri Shridhar Dhanda in lieu of evidence in support of suit claim in the nature of examination-in-chief marked as Exh.P. The plaintiff also examined the affiant in the Court on oath, as per law laid down by this Court in F.D.C.Ltd. v. Federation of Medical Representatives F.D.C.Ltd. v. Federation of Medical Representatives F.D.C.Ltd. v. Federation of Medical Representatives Association (I), Association (I), Association (I), AIR 2003 Bom. 371, who has deposed as under: From last eight months I am working with the plaintiff branch. The affidavit dated 30.10.2007 now shown to me bears my signature. It is filed on the basis of record maintained by the plaintiff- Bank. The contents of this affidavit are true and correct. The affidavit is marked as Exh.P. Exh.P. Exh.P. (Answer to Court Question : I have no personal knowledge about the suit transactions. The computerization has taken place in the year 1993 i.e. after filing of the suit. I do not know the reason as to why the plaintiff- Bank has not filed statement of accounts duly certified under the Bankers - 7 - Books Evidence Act. The outstanding balance, which is mentioned in the affidavit as due and recoverable from the defendants, is available on the computer maintained by the plaintiff. (emphasis supplied) 12. After the above evidence, learned counsel for the plaintiff- Bank closed the case of the plaintiff. He refused to argue. Consequently, left with no other alternative, following order-sheet was recorded in the open Court on 5th March, 2008: "The plaintiff has examined their witness. Learned counsel for the plaintiff submits that plaintiff does not want to examine any more witness. He has closed his evidence. He further submits that he does not want to advance any arguments. Accordingly, suit is closed for judgment." Questions for Determination :- Questions for Determination :- Questions for Determination :- --------------------------- --------------------------- --------------------------- 13. Faced with the above situation, I am called upon to decide this suit involving following questions:- (A) Whether in the facts and circumstances of the case, the plaintiff-bank has established proof of documents and proved the same as per the provisions of the Indian Evidence Act and can they be read in evidence? (B) Whether in the facts and circumstances of the case, the evidence tendered by the bank - 8 - in the form of typed photo copies or photo copies of the documents is admissible as legal evidence? (C) Whether in the facts and circumstances of the case, the equitable mortgage alleged to have been created by the defendant No.5 in favour of the plaintiff-bank is proved? (D) Whether the suit claim can be ascertained on the basis of material available on record? Consideration and Findings :- Consideration and Findings :- Consideration and Findings :- -------------------------- -------------------------- -------------------------- 14. The learned counsel for the plaintiff after having examined the witness Mr.Shridhar Dhanda made a statement that he did not want to advance any argument. This Court was, thus, required to close the case for judgment. Thus, this suit is being decided on the basis of evidence available on record. As to Question-A :- As to Question-A :- As to Question-A :- ---------------- ---------------- ---------------- 15. Now, let me turn to the evidence brought on record. The plaintiff-bank, by way of evidence, has filed affidavit of Mr.Shridhar Dhanda to establish suit claim. 16. The above affidavit does not refer to any power of attorney having been given in favour of the - 9 - affiant/deponent to depose on behalf of the plaintiff- Bank. 17. The suit transaction is of 1987. At the relevant time, Mr.Shridhar Dhanda was not in the said branch. In the first paragraph of his affidavit, he has, categorically, stated that the facts stated in the affidavit are on the basis of record maintained by the plaintiff-bank. He, in reply to the Court question, has categorically admitted that he did not have personal knowledge about the suit transactions. That he did not know the reason as to why the plaintiff bank has not filed statements of accounts duly certified under the Banker’s Books Evidence Act. That the outstanding dues, mentioned in the affidavit, as due and recoverable from the defendants, were available on the computer maintained by the plaintiff-bank. The affiant/deponent has neither said that he was the scribe of the documents nor claimed to be the witness to the documents relied upon in support of the suit claim. The perusal of the affidavit would show that except making reference to the documents produced, neither signatures of the defendants are identified nor the contents thereof are proved. 18. With the aforesaid quality of evidence on - 10 - record the question for consideration is; whether proof of documents has been established or whether the loan documents are proved in accordance with the Evidence Act, so as to enable this Court to read those documents in evidence. 19. At this juncture, Sections 61, 62 and 63 of the Evidence Act need to be looked into. Section 61 lays down that contents of the documents may be proved either by primary or secondary evidence. This Section is based upon the principle that "best evidence" in the possession or power of the party must be produced. What the best evidence is, depends upon facts and circumstances of each case. Generally speaking, the original document is the best evidence. The contents of every written paper are, according to the ordinary and well established rules of evidence, required to be proved by the original document, and by that alone, if the document is in existence. 20. The mode of proving the contents of the documents has been dealt with in sections 61 to 66. As already stated hereinabove mere production of the documents purporting to have been signed or written by certain persons is no evidence of its authorship. It is necessary to prove their genuineness and execution. - 11 - Proof, therefore, has to be given of the handwriting, signature and execution of a document. No writing can be received in evidence as a genuine writing until it has been proved to be a genuine one, and none as a forgery until it has been proved to be a forgery. A writing, by itself, is not evidence of the one thing or the other. A writing, by itself, is evidence of nothing, and therefore is not, unless accompanied by proof of some sort, admissible as evidence. 21. Section 67 refers to documents other than documents required by law to be attested. It says that the signature of the person alleged to have signed a document (i.e. execution) must be proved by producing evidence to the effect that the signature purporting to be that of the executant is in fact in his handwriting as laid down by the Apex Court in Venkatachala v. Thimmajamma, Venkatachala v. Thimmajamma, Venkatachala v. Thimmajamma, AIR 1959 SC 443 and the other matter in the document (i.e. its body) must also be proved by proof of the handwriting of the person or persons purporting to have written the document. The term "execution" is not defined in any statute. It means completion, i.e. the last act or acts which complete a document and in English Law this is known as "signing, sealing and delivering". The ordinary meaning of executing a document is signing it - 12 - as a consenting party thereto. 22. The execution or authorship of a document, being a question of fact, can be proved like any other fact by direct or circumstantial evidence. The internal evidence provided by a document may also be of some help. In most cases the nature of evidence will depend on the nature of the documents and the circumstances of each case. 23. The definition of "proved" given under section 3 must be read along with section 67 which requires that there must be specific evidence that the signature purporting to be that of the executant is in the handwriting of the executant. Until this is done, the Court cannot proceed to consider whether execution is proved. In other words section 67 makes proof of execution of a document something more difficult than proof of matter other than execution of a document. Original of the public document must be proved in the manner required by the provisions of the Evidence Act (see C.H.Shah v. S.S.Malpathak C.H.Shah v. S.S.Malpathak C.H.Shah v. S.S.Malpathak, AIR 1973 Bom 14). 24. In the case in hand, the person who can vouch for truth of the facts in issue has not been examined. Hence, documents cannot be said to have been proved in - 13 - accordance with the provisions of the Evidence Act. Consequently, they cannot be read in evidence. As to Question-B :- As to Question-B :- As to Question-B :- ---------------- ---------------- ---------------- 25. Let me now deal with the photo copies of some of the documents filed on record. Section 63 of the Evidence Act provides- for leading secondary evidence. Secondary evidence cannot be accepted without sufficient reason being given for non production of the original. The loss of original document must be established in order to lead secondary evidence. Secondary evidence of the document can be allowed to be lead only where original is proved to have existed but was lost or misplaced (see Filmistan Private Ltd Filmistan Private Ltd Filmistan Private Ltd v. The Municipal Corporation for Greater Bombay, v. The Municipal Corporation for Greater Bombay, v. The Municipal Corporation for Greater Bombay, AIR 1973 Bombay 66). The document unless shown to have been compared with original one, mere copy of the document does not become secondary evidence. The person giving oral evidence, who accounts for the contents of the document, must have himself seen the original document and not a mere copy. "Seen" here will obviously mean "read". A person who proposes to testify the contents of a document, either by copy or otherwise, must have read it. The contents of private documents may be proved as secondary evidence by any - 14 - witness who has in fact read them. The secondary evidence is required to be proved in the same manner in which primary evidence is proved. 26. Section 65 of the Evidence Act provides that in each type of cases secondary evidence relating to the document may be given. This section enumerates the seven exceptional circumstances in which secondary evidence is admissible. Secondary evidence is of the contents which cannot be admitted without production of document in such a manner within one or the other of the cases as provided for in the said section. 27. The prior permission of the Court is required to be taken for producing secondary evidence of the documents on the ground that original documents were lost. To sum up, when anybody wants to lead secondary evidence, two things are required to be proved; there must be evidence of the existence of the original documents, and there must be evidence of their loss. 28. So far as the present case is concerned,no permission to lead secondary evidence was obtained by the plaintiff-bank. The entire correspondence between the plaintiff and the defendants filed on record cannot be said to be primary evidence since they are merely typed copies without carrying signature of the - 15 - author of the documents (see Exhs."O" to "R"). Whereas some of the documents are mere photo copies (see Exhs."S" to "U"). No evidence is on record to show that, at any time in the past, original documents of which copies are produced were in existence and that they were lost. Nobody has deposed with respect to the fact of having seen and compared copies produced with the original documents. The secondary evidence of the contents of document is inadmissible until non-production of the original is first accounted for, so as to bring it within one or the other category of the cases provided for in section 65 of the Evidence Act. 29. For the reasons recorded above secondary evidence tendered is inadmissible. It cannot be read in evidence. Hence, the documents (Exhs."O" to "U") referred to hereinabove, are excluded from consideration. 30. So far as two demand notices both dated 30th January, 1990 are concerned, the same are also photo copies of the typed documents without having signatures of the Advocate, who had allegedly issued those demand notices. Nobody has proved contents thereof. There is no evidence on record showing - 16 - despatch of these notices or receipts thereof. No acknowledgments evidencing receipt of these notices by any of the defendants are on record. Under these circumstances, these notices cannot be said to be a legal evidence of demands made, as such demand has not been proved. For want of demand, liability of the continuing guarantor does not spring. (see Margaret Margaret Margaret Lalita v. Indo Commercial Bank Ltd. Lalita v. Indo Commercial Bank Ltd. Lalita v. Indo Commercial Bank Ltd., AIR 1979 SC 102). 31. The upshot of the discussion is that none of the documents can be read in evidence. Hence all the documents relied upon by the plaintiff- Bank are excluded from consideration. As to Question-C :- As to Question-C :- As to Question-C :- ----------------- ----------------- ----------------- 32. So far as the question of creation of equitable mortgage is concerned, I must refer to some of the sub-paras of para-5 the affidavit of the plaintiff’s witness- Mr.Dhanda relating to the said question, which read as under:- "(f) I say that on 5th December 1988 Defendant No.2 with consent of Defendant No.5 deposited with the Plaintiff title deed of immovable property being Flat No.404 on the 4th Floor of "Hari Darshan" situated at Bhayander (West) District Thane. I say that I am having original title Deed immovable property being - 17 - Flat No.404 on the 4th Floor of "Hari Darshan" situated at Bhayander (West) I produce the same which may be marked as Exhibit-‘M’ Exhibit-‘M’ Exhibit-‘M’. ..... ..... ..... ..... "(m) I say that on 27th February, 1990, defendant No. 5 wrote to Advocate for the plaintiff falsely denying the creation of mortgage, but authorizing the Plaintiff search for a purchaser of the mortgaged flat. I say that the plaintiff has irrecoverably lost/misplaced the Original letter sent by Defendant No.5 and has got a typed copy and I produce the same which may be marked as Exhibit-T Exhibit-T Exhibit-T". (emphasis supplied) 33. As already stated hereinabove, firstly; the guarantee deed (General Form of Guarantee Deed) has not been proved in accordance with the provisions of the Evidence Act. Secondly; so far as demand to invoke guarantee is concerned, the same has also not been proved. Thirdly, so far as creation of equitable mortgage is concerned, witness has stated that defendant No.2 with the consent of defendant No.5 deposited with plaintiff-bank title deed of immovable property. In para 5(f) of the affidavit reproduced to hereinabove, a reference is made to the original title deed of the immovable property. Reading of this para 5(f) makes it clear that defendant No.5 himself did not deliver title deed to the bank. It was delivered by defendant no.2 as per the case propounded by the - 18 - plaintiff. It is neither pleaded that any authority letter was issued by defendant No.5 in favour of defendant No.2 authorizing him to deliver title deed nor any such letter is placed on record. No evidence in this behalf is on record. Thus, the authority on behalf of defendant No.5 to deliver title deed has not been established or proved. 34. Assuming for the sake of argument that an authority to tender document of title deed was in favour of defendant No.2, being a son of defendant No.5, even then there is no document on record to spell out intention that title deed was delivered with a view to provide security for the loan advanced by the bank. This was necessary in view of the assertion of defendant No.5 pleaded in para 5(m) of the affidavit of Shri Dhanda that, according to defendant No.5, document was given to find out purchaser for the property. With this quality of evidence, this Court has to consider the question, whether the equitable mortgage has been legally created. If answer is in the affirmative, then only it would be enforceable at law. 35. The relevant aspects of the law pertaining to mortgage by depositing of the title deed is to be - 19 - found in the case of K.J.Nathan v. Maruthi Rao, K.J.Nathan v. Maruthi Rao, K.J.Nathan v. Maruthi Rao, AIR 1965 SC 430; wherein the Apex Court ruled as under: "Section 58(1) of the Transfer of Property Act defines a mortgage by deposit of title deeds thus: "Where a person in any of the following towns, namely, the towns of Calcutta, Madras and Bombay ... delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title deeds." Under the definition the essential requisites of a mortgage by deposit of title deeds are, (i) debt, (ii) deposit of title deeds, and (iii) an intention that the deeds shall be security for the debt. Though such a mortgage is often described as an equitable mortgage, there is an essential distinction between an equitable mortgage as understood in English law and the mortgage by deposit of title deeds recognised under the Transfer of Property Act in India. In England an equitable mortgage can be created either, (1) by actual deposit of title-deeds, in which case parol evidence is admissible to show the meaning of the deposit and the extent of the security created, or (2) if there be no deposit of title deeds, then by a memorandum in writing, purporting to create a security for money, advanced: see White and Tudor’s Leading Cases in Equity, 9th edition, Vol. 2 at p.77. In either case it does not operate as an actual conveyance though it is enforceable in equity; whereas under the Transfer