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. 414 OF 1990 SUIT NO. 414 OF 1990 SUIT NO. 414 OF 1990 Bank of Maharashtra, a banking Corporation having its Head Office at "LOKMANGAL", 1501, Shivaji Nagar, Pune- 5, and one of the Branch Offices at Bombay Samachar Marg at Fort Bombay. ... Plaintiff. V/s. 1. Messrs. Chemicals and Machinary Private Ltd., a company registered under the Companies Act and having its Registered office at PNB House, 2nd Floor, Sir P.M.Road, Fort, Bombay. 2. P.K.Choksi of Ahmedabad Indian Inhabitant carrying on business as Sole Proprietor of A.G.Trades, having his Registered office at 1, Sahakar Niketan, Navrangpura. ... Defendants. U.Mahajan i/b. Divekar & Co. for the plaintiff. None for the defendants. CORAM: V.C.DAGA, J. CORAM: V.C.DAGA, J. CORAM: V.C.DAGA, J. DATED: 15th February, 2008. DATED: 15th February, 2008. DATED: 15th February, 2008. JUDGMENT : JUDGMENT : JUDGMENT : -------- -------- -------- . The plaintiff- Bank of Maharashtra ("Bank" for short) has filed this suit against the defendants for the recovery of their outstanding dues in the sum of Rs.5,25,487.90 together with future interest on Rs.2,55,300.00 and against defendant No.1 for the recovery of Rs.1,77,277.00 with future interest on Rs.1,11,486.30. The defendant No.1 is a proprietorship concern, whereas defendant No.2 is the sole proprietor of defendant No.1. 2. It is the case of the plaintiff that on or about 1st September, 1980, the defendant No.1 approached the plaintiff- Bank and requested to sanction them Bill Discounting facility upto the limit of Rs.3,30,000/-. Accordingly the said facility was granted by the plaintiff- Bank to defendant No.1 against its customers for goods sold and delivered to them, in favour of or endorsed to the plaintiff advance moneys of the bills of exchange to defendant No.1 against the security of bills of exchange drawn on and accepted by its customers and endorsed in favour of the plaintiff- Bank. As and by way of collateral security, the defendant No.1, on 1st September, 1980, executed a promissory note in favour of the plaintiff for a sum of Rs.3,30,000/- thereby promising the plaintiff to pay the said sum of Rs.3,30,000/- with interest thereon at the rate of 17% per annum. On the same day, defendant No.1 executed Letter of Continuing Security; Letter of Arrangement and Bills Agreement. On 3rd May, 1983, defendant No.1 - 3 - renewed the said documents including a Letter of Continuing Security; Joint and Several Pronote; and Bills Agreement. 3. It is further case of the plaintiff that pursuant to the said Bill Discounting facility, the defendant No.1 drew several bills of exchange on defendant No.2 and handed over the same to the plaintiff duly accepted by defendant No.2 and endorsed in favour of the plaintiff. Against the said bills of exchange, plaintiff- Bank advanced to defendant No.1 the moneys comprised in each of the bill of exchange. All the bills of exchange were accepted in Ahmedabad for payment in Bombay by defendant No.2 at their respective due dates. The details of those bills of exchange drawn by defendant No.1 on defendant No.2 during the period from 1st March, 1984 to 13th August, 1984, which were accepted by defendant No.2 but not paid by him, are given in Annexure-A to the plaint. 4. The plaintiff has further contended that on 8th January, 1986, defendant No.1 by way of renewal executed fresh set of documents including promissory note and a letter of continuing security, letter of arrangement and bills agreement. - 4 - 5. It is the case of the plaintiff that as on 31st January, 1986, a sum of Rs.3,01,300/- was due and recoverable from defendant No.1 under the said bill discounting facility. The defendant No.1 by its letter dated 8th February, 1986 confirmed the execution of aforesaid documents and also confirmed the debit balance of Rs.3,01,300/-. After respective due dates, defendant No.2 was called upon by the plaintiff on several times to pay the amount of Rs.2,55,300/- due and recoverable from the defendants under 24 bills. The defendant No.2 did not pay the said amount or any part thereof. The defendant No.2 by his letter of acknowledgment dated 12th January, 1987 acknowledged his liability and promised to pay to the plaintiff the amount due and recoverable under several bills mentioned therein along with interest. Since the defendants failed to pay the said amount, plaintiff called upon both defendants to pay the amount of Rs.2,55,300/- with interest. The defendant No.2 neither sent any reply to the said notice nor paid the amount. The defendant No.1 by its balance-cum- security confirmation letter dated 27th December, 1988 agreed and confirmed the balance of Rs.2,55,300/- under bill discounting facility and also - 5 - confirmed the documents already executed till that date. 6. It is further case of the plaintiff that on 26th February, 1984, defendant No.1 applied for a recurring temporary overdraft facility to the extent of Rs.1,00,000/-. The said facility was granted to defendant No.1 on its executing promissory note and continuing security. Accordingly an account was opened in the name of defendant No.1. On 8th January, 1988, by way of renewal, defendant No.1 executed fresh promissory note promising to pay to the plaintiff Rs.1,00,000/- with interest and also executed letter of continuing security and letter of arrangement on the same day. 7. On 31st January, 1986, there was a debit balance of Rs.1,12,513.50 in the account of defendant No.1 exclusive of interest. The defendant No.1 by its letter dated 8th February, 1986 acknowledged the debt and confirmed execution of the documents. On 6th December, 1988 there was debit balance of Rs.1,11,445.50 in the said account. The defendant No.1 again by letter dated 27th December, 1988 acknowledged the debt and confirmed execution of - 6 - documents. 8. As the defendants did not pay any amount in spite of notice dated 2nd March, 1988, the plaintiff again by its advocate’s letter dated 5th January, 1990 called upon the defendants to pay the entire dues in respect of the said bills. By separate letter dated 5th January, 1990 plaintiff called upon defendant No.1 to pay the dues due and recoverable from them under recurring overdraft facility. The case of the plaintiff is that defendant No.1 being the drawer and defendant No.2 being drawee are liable to pay the amount due and recoverable under the said 24 bills with interest. The plaintiff has, therefore, filed this suit for recovery of Rs.5,25,487.90 due and recoverable from defendant Nos.1 and 2 under bill discounting facility and for Rs.1,77,277/- from defendant No.1 under the recurring overdraft facility with interest thereon. 9. On being summoned, the defendants appeared to oppose the suit claim. The defendants had filed summons for judgment bearing No.626/1990 for grant of unconditional leave to defend suit. Vide order dated - 7 - 27th September, 2007, learned single Judge (Khanwilkar, J.) was pleased to dispose of the said summons for judgment by granting unconditional leave in favour of the defendants with further directions to them to file written statement within six weeks from the date of the order. In spite of the aforesaid order, the defendants failed to file written statements. In view thereof, vide order dated 22nd November, 2007, suit was ordered to proceed in default of written statement. The plaintiff was directed to file affidavit in support of suit claim along with documents. 10. Pursuant to the aforesaid order dated 22nd November, 2007, an affidavit in lieu of evidence in support of the suit claim together with original documents including extracts of accounts duly certified under the Bankers Books Evidence Act were filed by the plaintiff- Bank. The affiant has entered the witness box to verify his affidavit. All the documents were proved by the plaintiff through their affidavit. Nobody was present on behalf of the defendants either to cross-examine the affiant or to challenge the legality or validity of the documents executed by defendant Nos.2, 3 and 4 in favour of the - 8 - plaintiff- Bank. Under these circumstances, evidence of the plaintiff together with documents went unchallenged. The plaintiff- Bank has proved their claim together with their right to recover the amount with interest thereon. The plaintiff- Bank has also proved existing liability against the defendants and outstanding dues due and recoverable from them on the basis of the extract of accounts duly certified under the Bankers Books Evidence Act. The plaintiff has also proved that the bill discounting facility was granted by the plaintiff in favour of the defendants after their executing loan documents. That the said facility was was utilised by the defendants and that an amount of Rs.5,25,487.90 was due and recoverable from them under the said facility together with future interest. It is also proved that recurring overdraft facility was granted in favour of defendant Nos.1. It was utilised by them and that an amount of Rs.1,77,277/- was due and recoverable from defendant No.1 under the said facility together with future interest. The suit claim is not barred by limitation. The plaintiff has not claimed any excess amount by way of interest. As such, plaintiff- Bank is entitled to a decree in terms of the suit claim. - 9 - 11. In the above view of the matter, suit filed by the plaintiff deserves to be decreed in toto with slight modification of rate of future interest on the decretal amount which has to be at the prevailing rate of bank interest. Hence the following order: ORDER (i) The suit is decreed in terms of the prayer clauses incorporated in the plaint. (ii) The defendant Nos.1 and 2 do jointly and severally pay Rs.5,25,487.90, with future interest on Rs.2,55,300/- calculated from the date of suit till payment or part payment thereof at the rate of 10% per annum with costs. (iii) The defendant No.1 do pay Rs.1,77,277/- with future interest on Rs.1,11,486.30 calculated from the date of suit till payment or part payment thereof at the rate of 10% per annum with costs. - 10 - (iv) Decree be drawn in terms of this order. (V.C.DAGA, J.) (V.C.DAGA, J.) (V.C.DAGA, J.) - 11 - 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 SUMMARY SUIT NO. 414 OF 1990 SUMMARY SUIT NO. 414 OF 1990 SUMMARY SUIT NO. 414 OF 1990 Bank of Maharashtra. ... Plaintiff. V/s. Messrs. Chemicals and Machinary Private Ltd. & anr ... Defendants. Rahul Yadav i/b. S.Ashwinikumar & Co. for the plaintiff. None for the defendants. CORAM: V.C.DAGA, J. CORAM: V.C.DAGA, J. CORAM: V.C.DAGA, J. DATED: 15th February, 2008. DATED: 15th February, 2008. DATED: 15th February, 2008. OPERATIVE PART OF THE JUDGMENT : OPERATIVE PART OF THE JUDGMENT : OPERATIVE PART OF THE JUDGMENT : ------------------------------ ------------------------------ ------------------------------ . For the reasons separately recorded in the judgment the following order is passed: (i) The suit is decreed in terms of the prayer clauses incorporated in the plaint. (ii) The defendant Nos.1 and 2 do jointly and severally pay Rs.5,25,487.90, with future interest on Rs.2,55,300/- calculated from the date of suit till payment or part payment - 12 - thereof at the rate of 10% per annum with costs. (iii) The defendant No.1 do pay Rs.1,77,277/- with future interest on Rs.1,11,486.30 calculated from the date of suit till payment or part payment thereof at the rate of 10% per annum with costs. (iv) Decree be drawn in terms of this order. Sd/- (V.C.DAGA, J.) (V.C.DAGA, J.) (V.C.DAGA, J.)