1 fa478 ssp IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELATE JURISDICTION FIRST APPEAL NO.478 OF 1992 Laxman Malhari Sable ...Appellant vs. 1 Punjab National Bank 2 Jayantilal Chunilal Gundecha ...Respondents Mr.S.G.Page for the appellant None for the respondents CORAM : A.S.OKA,J. DATE : JULY 13, 2011 JUDGMENT: 1 The appellant who is the original defendant no.1 has taken an exception to the Judgment and Decree dated 27 th March 1991 passed by the learned Joint Civil Judge (S.D.), Raigad at Alibag in a suit filed by the first respondent-bank. 2 According to the case of the first respondent bank, the appellant (first defendant) approached the first respondent-bank for grant of loan for carrying on his business. The first respondent sanctioned loan of Rs. 75,000/- for the purpose of purchase of machinery. On the request made by the appellant, the first respondent bank sanctioned a cash credit facility of Rs.40,000/-. The second respondent (second defendant) guaranteed the repayment of the amounts under the said facilities. Reliance is placed by the first respondent-bank on the various documents executed by the appellant and the second respondent such as demand promissory notes, deeds of hypothecation, deed of guarantee etc. The first respondent also relied upon the letters of acknowledgment of liability signed by the appellant on 15 th February 2 fa478 1982, 2nd August 1984 and 4th February 1985. Reliance is placed on letters of acknowledgment issued by the appellant in respect of the cash credit facility . A legal notice was issued by the first respondent to the appellant and the second respondent calling upon them to repay the outstanding amount with interest. As the amounts were not paid, the first respondent filed a suit on 2nd February 1988 for recovery of the amount. A sum of Rs.1,10,175.65 was claimed on account of the amount due and payable under the term loan account and a sum of Rs.94,075.50 was claimed on account of the amount due and payable under the cash credit facility. 3 The appellant contested the suit by filing a written statement and additional written statement. The appellant denied the execution of various documents. According to the case of the appellant, the first respondent was in need of a premises for its office purpose and the appellant was constructing a new premises. According to the appellant, the amount was paid to him by the first respondent as a deposit for newly constructed premises and it was agreed that the said amount should be adjusted from the rent of the present premises of the first respondent which was situated in the building owned by the appellant. It was contended that in the year 1974, the present premises of the first respondent was taken on rent from the appellant. It was contended that though the officers of the first respondent agreed to enhance the rent, the officers did not execute any rent note. It was contended that a sum of Rs.9,00,000/- is outstanding with the first respondent towards the rent. 4 The Trial Court passed a joint and several decree against the appellant and the second respondent in the 3 fa478 sum of Rs.2,04,246.15 together with future interest at the rate of 13.5% per annum with quarterly rests from the date of filing of the suit till realization of the entire amount. 5 The learned counsel for the appellant submitted that the suit for recovery was barred by limitation and in fact, letters of acknowledgment relied upon by the first respondent-bank were obtained from the appellant at one and the same time and the dates were filled in subsequently. It was contended that a sum of Rs.75,000/- was accepted by the appellant as a deposit for the premises of the appellant taken on rent by the first respondent-bank. He submitted that as per the terms and conditions of the agreement between the parties it was never agreed that the first respondent bank should adjust the rent amount towards installments of loan and a sum of Rs.1500/- being the rent amount was illegally adjusted. He submitted that the grant of interest at the rate of 13.5% with quarterly rests is illegal. None appears for the first respondent. 6 I have perused the pleadings as well as notes of evidence. I have perused the impugned Judgment. The first respondent-plaintiff examined Shri Vijaykumar Ramchandra Mule, Shri Pandurang Purushottam Yedgaonkar, Shri Gurumukh Prabhasane Talaraja and Shri Arvind Vishnu Joshi as witnesses who were its officers. The appellant stepped into witness box and denied the execution of the documents. 7 Perusal of the evidence of the officers of the first respondent shows that the execution of the demand promissory note in the sum of Rs.75,000/- and execution of hypothecation deed executed by the appellant were duly 4 fa478 proved. Even the guarantee signed by the second respondent was duly proved. The said documents were executed by way of security for repayment of loan of Rs. 75,000/-. A demand promissory note in the sum of Rs. 40,000/- dated 2nd February 1981 and hypothecation deed of the same date were proved to be executed by the appellant. The said documents were executed by way of security for repayment of the amount payable under the cash credit facility. Letters of acknowledgment signed by the appellant in connection with both the facilities were duly proved. Even the extracts of loan account and cash credit facility were duly proved. 8 The appellant came out with a case that the first respondent had agreed to pay an amount of Rs.1,25,000/- to him as a deposit amount, but only a sum of Rs. 1,15,000/- was paid as deposit towards rent. 9 The appellant stated that his signatures on 10 to 12 forms were taken by the officers of the first respondent and before taking the signatures, the forms were not read over. He stated the signatures of the second respondent were also taken in a similar manner. He stated that the signatures of the second respondent were taken as a witness. He claimed that a sum of Rs.9,00,000/- was due and payable by the first respondent towards rent. In the cross examination, he admitted that though the notice demanding amount advanced was received by him, he did not issue any reply to the said notice. He admitted that for a period of 25 to 30 years, he is dealing with business as a big contractor. He admitted that he has raised funds from the other banks prior to the year 1981. He admitted that he was maintaining the accounts of the business but he was unable to show that the amount was taken by him from the first respondent by way of 5 fa478 deposit. He admitted that he had not filed any suit for recovery of rent against the first respondent. He also admitted that after receipt of demand notice, he realized that his signatures were taken by the Bank Authorities on printed forms. He stated that he has not filed any police complaint or private complaint against the officers of the first respondent-bank. 10 Thus, execution of the promissory notes, deeds of hypothecation and letters of acknowledgment was duly proved by the first respondent by examining its officers. The appellant admitted his signatures on various documents. However, he could not prove that his signatures were obtained on blank documents. Though the appellant was aware that his signatures were obtained, he has not filed any complaint to the authorities against the action of the first respondent of allegedly obtaining signatures. The extracts of accounts were produced by the first respondent to prove liability of the appellant. The letters of acknowledgments bring the suit within limitation. Though the appellant claimed that in fact the first respondent-bank is liable to pay arrears of rent of Rs.9,00,000/-, admittedly, he has neither made any such demand nor filed any proceedings for recovery of the said amount. That is the reason why the Trial Court has completely discarded the defence of the appellant. The Trial Court rightly held that the first respondent has established the liability of the appellant and the second respondent. 11 As far as the rate of interest is concerned, the documents executed by the appellant provide minimum rate of interest @ 13.5% with quarterly rests. Therefore, rate of interest was fixed as per the agreement between the parties. 6 fa478 12 Hence, there is no merit in the appeal and the same is dismissed with no order as to costs. Civil application no.2015 of 1992 does not survive and the same is disposed of. JUDGE