IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA. RSA No. 90 of 1998 Date of Decision : 18.7.2008 United Commercial Bank …Appellant Versus: Lalit Kishore and another …Respondents. Coram: The Hon’ble Mr.Justice Sanjay Karol, Judge. Whether approved for reporting?1 Yes For the appellant : Mr. Bimal Gupta, Advocate. For the respondents : None Sanjay Karol, J. (Oral). The appellant herein-United Commercial Bank, a National Bank Financial Institution filed a suit for recovery for a sum of Rs.44,978/- against Shri Lalit Kishore Negi- defendant No.1 (principal borrower) and Shri Chander Sain Mehta- defendant No.2 (guarantor). The plaintiff’s Civil Suit No.39-1 of 1994 was dismissed by the Sub Judge, Rampur vide judgment and decree dated 17.7.1996 on the ground that the plaintiff had failed to prove the Balance Confirmation Letter dated 31.3.1991, therefore, his suit was barred by limitation. 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 2. The plaintiff assailed the aforesaid judgment and decree by way of Civil Appeal No.123 of 1996 but, however, the District Judge, Kinnaur Civil Division at Rampur Bushahr (H.P.) dismissed the appeal in terms of judgment and decree dated 18.10.1997, upholding the finding of facts recorded by the trial Court. 3. Against the same, the plaintiff has filed the present appeal, which stands admitted on the following substantial questions of law:- “1. Whether in the instant suit which was filed under Order 37, Code of Civil Procedure, when the defendants did not appear and were proceeded ex- parte in the suit and also they did not apply for leave to defend the suit, in this situation the suit was to be decreed on the basis of averments made in the plaint? 2. Whether the learned District Judge has misconstrued the statement of PW-1 with respect to proof of Ext.P-10, more particularly when there is no cross-examination to this witness and also there is no rebuttal? 3. Whether the whole of the suit amount has become barred by time when the loan documents were executed on 5.5.1988 and the loan was to be re- paid in 36 monthly equated installments starting from July, 1988 and the suit has been filed on 30.3.1994? 4. Whether the learned District Judge has misconstrued, misinterpreted the material on record and the view taken by his (sic.) is not possible on the basis of material on record?” 3 4. Facts necessary for adjudication of the present appeal are as under:- On 2.5.1988, defendant No.1 approached the plaintiff bank seeking financial assistance in terms of applications Ext.P-1, Ext.P-2 & Ext.P-3. A sum of Rs.18,772.50 paise was recommended for sanction. The said amount was to be re-paid by defendant No.1 in 36 monthly installments. Prior to the disbursement of the sanctioned loan, a formal agreement dated 5.5.1988 (Ext.P-4) was executed between the plaintiff and the principal borrower- defendant No.1. It was agreed that in the event of default, the plaintiff was entitled to recover interest @6% over and above the Reserve Bank rate subject to the minimum of 16% per annum. If however, the amount was paid in time, the bank was to charge interest @13.5% per annum. The principal borrower also executed a deed of hypothecation (Ext.P-5). Defendant No.2 stood guarantee on behalf of defendant No.1 and issued a letter of guarantee dated 5.5.1988 (Ext.P-6). The loan was disbursed and in terms of the scheme under which the loan was disbursed, the goods were purchased vide invoice memos Ext.P-7 & Ext.P-8. 5. After disbursement of the entire sanctioned amount, defendant No.1 failed to pay any installment. Notice dated 23.3.1990 Mark ‘X’ was issued to defendant No.1 vide registered letter, the postal receipt of which is Ext.P-9. The same was neither replied nor any amount was deposited. However, on 4 31.3.1991, defendant No.1 executed the balance sale confirmation letter Ext.P-10 confirming and acknowledging a sum of Rs.28,573.50 paise due and payable to the bank. 6. Since defendant No.1 failed to pay any amount even thereafter, the bank was left with no option but to file the civil suit on 30.3.1994 for recovery for a sum of Rs.44,978/-. 7. Inspite of the service, defendant No.1 chose not to contest the suit and accordingly he was proceeded ex-parte. 8. In order to prove its case, the plaintiff examined two witnesses, namely, S/Shri Satpal Sharma (PW-1) and Jawahar Lal Bhalaik (PW-2). Shri Jawahar Lal Bhalaik (PW-2) proved the statement of account Ext.P-12 and also the Power of Attorney Ext.P-11 authorizing him to institute the suit in accordance with law. From the statement of account Ext.P-12, it is clear that a total sum of Rs.44,978/- was due and payable to the plaintiff bank as on 31.3.1994. It is also evident that since the disbursement of the loan amount, there is not even a single credit entry, meaning thereby that no amount whatsoever was paid by defendant No.1 either towards the principal amount or the interest due and payable in terms of the agreement Ext.P-4. 9. Shri Satpal Sharma (PW-1) has categorically deposed that he is an employee in the Branch since 1970. He has worked under various Bank Managers including Shri K. B. Rai Sagar and also Shri Jawahar Lal Bhalaik and recognizes the signatures of the said persons. It is evident from his deposition that the entire 5 transaction has taken place in the bank in his presence. He has deposed that defendant No.1 visited the branch on 3.5.1988 and also on 5.5.1988 in relation to the disbursement of the loan and various documents Ext.P-1, Ext.P-2, Ext.P-3, Ext.P-4, Ext.P-5 & Ext.P-6 were executed in the bank. He has deposed that the bank had issued legal notice and a credit report had also been obtained prior to the disbursement of the loan. Further, he has categorically deposed that on 31.3.1991 defendant No.1 visited the bank and signed the balance confirmation letter Ext.P-10. He has emphatically stated that defendant No.1 had admitted the debt due and payable to the bank. He has further deposed that the Bank Manager Shri O. P. Thakur had signed in his presence and he recognizes his signatures. From his statement, it is evident that the exhibited documents including Ext.P-10, the balance confirmation letter, duly stand proved in accordance with law. 10. Under the Indian Evidence Act, 1872, the signatures can be proved by a person who is either acquainted with the hand writing or has seen the person sign the same. Shri Satpal Sharma (PW-1) has categorically stated that the entire transaction took place in his presence. In fact he has filled-in certain documents being Ext.P-5 & Ext.P-6. In no uncertain terms, it has been stated by him that defendant No.1 had visited the branch and had signed the balance confirmation letter on 31.3.1991. 11. Further, perusal of the signatures on the documents Ext.P-1, Ext.P-2, Ext.P-3 & Ext.P-4 tally with the signatures on 6 Ext.P-10 and are of the very same person, who has signed all the documents as defendant No.1. Therefore, in my view, the document Ext.P-10 stands duly proved in accordance with law. 12. The suit of the plaintiff ought to have been decreed by the Courts below and the entire amount due and payable by defendant No.1 stood proved by the plaintiff in accordance with law. In my view, the Courts below have seriously erred in dismissing the plaintiff’s suit on the ground of limitation. The material on record, the documents and oral have not been appreciated in its correct perspective. It is apparent that the First Appellate Court has misinterpreted and misconstrued the material on record. 13. Mr. Bimal Gupta, Advocate has contended that the suit filed under Order 37 ought to have been decreed keeping in view the provisions of Order 37(2)(3) CPC. Undisputedly, the entire amount was to be paid in 36 equal installments. The last installment due and payable was in May, 1991. The suit was filed in March, 1994, therefore, for such of those installments which were not time barred, the suit could not have been dismissed and decree ought to have been passed by the Courts below keeping in view the aforesaid provisions more particularly when the suit was filed under Order 37 and the defendants inspite of the service chose not to seek leave of the Court and contest the suit. The questions of law are answered accordingly. 7 For the aforesaid reasons, the judgment and decree passed by the trial Court dated 17.7.1996 as also the First Appellate Court dated 18.10.1997 are set aside. The plaintiff’s suit is decreed against both the defendants jointly and severally. The plaintiff shall be entitled to a decree of a sum of Rs.44,978/- along with interest @13.5% per annum pendente lite and future till the date of realization. The plaintiff shall also be entitled to costs throughout. ( Sanjay Karol ), Judge. July 18, 2008. (rana)