THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY CITY CIVIL COURT APPEAL No.137 OF 1994 DATED: 27-10-2010 JUDGMENT: This appeal is directed against the judgment and decree, dated 18-02-1994, in O.S.No.433 of 1984 on the file of the learned IV Additional Judge, City Civil Court, Hyderabad, wherein the suit filed by the 1s t respondent herein-Andhra Bank, Nacharam Branch, Hyderabad, for recovery of Rs.14,12,076.76ps, was decreed and further directing the defendants 1, 2 and 5 to 7 to pay a sum of Rs.7,34,189.68 ps from out of the decretal amount and directing the 4th defendant to pay the balance amount of Rs.6,72,927.08 ps with subsequent interest @ 12% p.a. from the date of the suit till the date of realization and costs. 2. Heard learned counsel for the appellants. None appeared for the respondents in spite of posting the matter under the caption ‘for judgment’. Perused the record. 3. According to the 1st respondent herein, 1st defendant-firm, represented by its partners-defendants 2 and 3 engaged in manufacture of footwear and leather goods, was sanctioned open cash and credit up to a limit of Rs.3,30,000/- on 31-01-1981 on hypothecation of raw material and finished goods and was also sanctioned key cash credit limit of Rs.1,65,000/- and on the promise of the 4th defendant-LIDCAP the facility was enhanced to Rs.6,00,000/- on 08-06-1982. Plaintiff further pleads that the 1st defendant-firm has constituted the plaintiff bank as the power of attorney authorizing him to receive amount from 4th defendant-LIDCAP for all the material supplied by the defendants 1 to 3 and thus 4th defendant is liable to pay the amounts covered by the purchase bills emanating from the 4th defendant to the plaintiff bank. Plaintiff alleges that the 4th defendant failed to make the payments and instead connived with defendants 1 to 3. Hence, the suit. 4. Defendants 1 to 3 filed a written statement contending that it is the plaintiff’s responsibility to recover the amounts from the 4th defendant and defendants 1 to 3 are not liable to pay any amount. Defendants 1 to 3 further allege that the plaintiff highhandedly seized the machinery, goods and furniture of the 1st defendant on 09-03-1984 and caused heavy loss and damage to the 1st defendant. Defendants filed W.P.No.5339 of 1984 before this Court. 5. Defendants 5 to 7 were impleaded as legal representatives of D3, who died pendente lite. 6. On the strength of the pleadings, trial Court framed the following issues: 1. Whether the plaintiff is entitled for Rs.14,12,076.76 ps against the defendants 1 to 3 as prayed for? 2. Whether the plaintiff is entitled for Rs.6,77,927.08 ps against the 4th defendant? 3. Whether the suit is not maintainable as framed? 4. Whether the plaintiff is entitled for interest as claimed in the suit? 5. Whether the suit claim is barred by time? 6. To what relief? 7. The manager of the plaintiff bank was examined as P.W.1 and Exs.A1 to A20 were marked on behalf of the plaintiff. No oral evidence was adduced on behalf of the defendants, however Ex.B1-insurance policy for Rs.7,00,000/- for the seized goods was filed. 8. On a consideration of the evidence available on record, the trial Court held on issue No.5 that the suit is within time and on issue No.3, it was held that the suit is maintainable and on issue Nos.1, 2 and 4 the trial Court held that the plaintiff is entitled for recovery of the suit amount with interest @ 12% p.a. Accordingly, the suit was decreed for a total claim of Rs.14,12,076.76 ps and out of the said amount, 4th defendant was held liable to pay Rs.6,77,927.08 ps. Aggrieved by the same, Defendants 1 and 2 preferred the present appeal. 9. Learned counsel for the appellants would mainly contend that admittedly the risk is covered by the scheme under which Credit Guarantee Corporation would reimburse to the extent of 75% on the liability for which premium was deducted against the defendants in the account and a sum of Rs.3,44,737.61 ps is liable to be paid by the Credit Guarantee Corporation. He would further contend that the value of the stocks and machinery unauthorisedly seized by the bank in a sum of Rs.7,00,000/- is also liable to be given credit to. He would further contend that when the above two amounts of Rs.3,44,737.61 ps and Rs.7,00,000/- are given credit, nothing remains payable by the defendants 1 to 3 in view of the specific decree having been passed against the 4th defendant for a sum of Rs.6,77,927.08 ps. 10. Learned counsel for the appellants would further contend that the trial Court dealt with the material issue Nos.1, 2 and 4 in a cryptic manner without adverting to the contentions raised by the defendants and without adjudicating the real dispute. 11. As rightly contended by the learned counsel for the appellants, paragraph Nos.15 and 16 of the impugned judgment do not disclose as to how the liability for the suit amount came to be fastened on the defendants and how a portion of the liability for a sum of Rs.6,77,927.08 ps was cast on the 4th defendant alone. The specific contentions raised by the defendants 1 to 3 regarding the correctness of the statement of account and the various amounts which according to them are liable to be deducted, have not been adverted to. It is however to be noted that the defendants 1 to 3 have not taken any specific plea in the written statement that there is coverage of the risk by the Credit Guarantee Corporation and a sum of Rs.3,44,737.61 ps is liable to be paid by the Credit Guarantee Corporation towards risk coverage. Similarly, there is no specific plea raised by the defendants in the written statement that the value of the goods seized is of Rs.7,00,000/- and the same is also liable to be deducted. Though they filed copy of the insurance policy-Ex.B2, defendants have not adduced any evidence in support of their contentions either regarding the risk coverage by the Credit Guarantee Corporation or giving credit to the value of the goods seized. As there is no specific plea raised in that regard, no specific issues also framed and consequently, no finding is recorded. The said contentions are raised for the first time in the appeal, but without there being any adjudication in the trial Court, the said contentions cannot be taken into consideration at this stage. 12. No doubt, in the written statement, reference is made to pendency of W.P.No.5339 of 1984 filed by the defendants challenging the seizure of the goods and machinery by the plaintiff bank. It is not disputed that by order, dated 09-09-1987, the said Writ Petition was disposed of with liberty to the defendants to move the civil Court in appropriate proceedings for the redressal of its grievance or for obtaining such interlocutory orders as may be necessary in the case. It was further observed that the dispute regarding the holding of the machinery and other implements of trade of the petitioner-firm kept under a lock and key by the bank for such an indefinite period gives raise to the question of what the terms and conditions of the loan are between the defendant-firm and the plaintiff-bank, which may have to be decided by the civil Court, but unfortunately the civil Court has not adjudicated upon the said question, perhaps owing to lack of necessary pleadings in that regard. Even after the disposal of the Writ Petition, with liberty to the defendants as stated above, the defendants have not chosen to amend the pleadings by incorporating the additional pleas regarding the risk coverage by the Credit Guarantee Corporation and giving credit to the value of the goods seized. 13. In the circumstances, having regard to the observations made in the order passed in W.P.No.5339 of 1984 by this Court and the specific contentions raised by the appellants in this appeal, virtually claiming that the entire liability stands wiped out if the amounts due by the Credit Guarantee Corporation and the value of the goods seized are given credit to, it is considered just and necessary that an opportunity be given to the defendants to raise the said additional pleas before the trial Court and seek adjudication thereon inasmuch as in the absence of such adjudication over the claims made by the defendants by way of set off, grant of any relief at this stage cannot be considered. 14. In the circumstances, the matter is remitted back to the trial Court with liberty to the parties to raise additional pleas by way of amended pleadings and adduce such further evidence as they may choose to and for fresh disposal in accordance with law. Having regard to the fact that the suit is of the year, 1984, the trial Court is directed to dispose of the same within four months from the date of receipt of a copy of this order and both parties shall cooperate in expeditious disposal of the suit. In the circumstances, the impugned judgment and decree of the trial Court are set aside and the matter is remitted to the trial Court for fresh disposal of the suit in the light of the observations made hereinabove. 15. In the result, the appeal is allowed as stated above. There shall be no order as to costs. _______________________ G.V.SEETHAPATHY, J 27th October, 2010. Tsy