1 S.4510.97.sxw JPP IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO. 4510 OF 1997 State Bank of India. ... Plaintiffs. V/s. M/s. Garuda Aviation & Ors. ... Defendants. Mr. Lokhandwalla for the Plaintiffs. None for the Defendants. CORAM : R.Y. GANOO, J. DATED : 24th FEBRUARY 2011. ORAL JUDGMENT :- The Plaintiffs have instituted this Suit to recover from the Defendants Rs.5,19,387.65 together with interest thereon at the rate of 19% per annum from the date of the Suit till payment or realization and for costs. 2. Few facts necessary for the disposal of this Suit are as under :- The Plaintiffs are a Bank established under the State Bank of India Act. The Plaintiffs in their course of business as bankers do grant over draft facilities to their clients. Defendant No.1 is the partnership firm of which Defendant 2 S.4510.97.sxw Nos.2,3 and 4 are the partners. Defendant No.1 by their letter dated 27th September 1996 at Exhibit - P sought over draft facility of Rs.12,00,000/-. According to the Plaintiffs, the said over draft facility was granted and the Defendants enjoyed the said over draft facility. The Defendants by their letter dated 22nd April 1997 at Exhibit P-1 informed the Plaintiffs that very shortly they would be receiving a cheque from M/s. Mahindra & Mahindra Ltd. to the tune of Rs.1,00,000/- and that the same amount will be used to repay the debt. The Plaintiffs by letter dated 6th May 1997 at Exhibit P-3 called upon the Defendants to comply with their word contained in letter dated 22nd April 1997. Looking to the fact that the Defendants are not paying the amount, the Plaintiffs by their Advocate’s notice dated 28th June 1997 at Exhibit P-4 called upon the Defendants to pay Rs.4,80,180.65 ps. alongwith interest at the rate of 20% per annum up till 31st December 1996 and alongwith the interest at the rate of 19% per annum from 1st January 1997 up to 31st March 1997. A similar request was made in terms of letter dated 23rd July 1997 at Exhibit P-5 by the Advocate for the Plaintiffs. It is noticed that the Defendants, by their letter dated 29th September 1997 at Exhibit P-6 recorded that they had paid a sum of Rs.25,000/- by cheque dated 17th September 1997 and they extended promise to pay the balance amount. The Defendants did not pay the said amount and that is how the Plaintiffs were compelled to file this Suit for recovery of the loan amount and accordingly, the Suit was filed on 1st December 1997. 3 S.4510.97.sxw 3. The Writ of Summons was served upon the Defendants. The Defendants failed to appear before the Court and no written statement was filed. Hence, this Suit was treated as undefended Suit. 4. The Plaintiffs examined their Officer Mr. K. Ilango as the witness and placed before the Court their evidence. The Plaintiffs also placed the documents mentioned aforesaid. The Plaintiffs relied upon the documents which consisted of exchange of correspondence between parties and the statement of accounts which is at Exhibit P-7. The Defendants remained absent at the stage of recording of evidence and that is how the Suit is taken up for hearing. 5. Learned Counsel Mr. Lokhandwalla appearing on behalf of the Plaintiffs took me through the various documents discussed above and submitted that the letter at Exhibit P-1 being letter dated 22nd April 1997 as well as letter at Exhibit P-6 being letter dated 29th September 1997 clearly record an admission on part of the Defendants to pay off the Bank dues. Learned Counsel Mr. Lokhandwalla had drawn my attention to the statement of accounts at Exhibit P-7 and pointed out that a sum of Rs.4,63,647.24 ps. was found at the foot of the account after giving due credit to the monies paid by the Defendants. Learned Counsel for the Plaintiffs had submitted that the principal amount is Rs.4,63,647.24 ps. and the Plaintiffs have claimed interest at the rate of 19% per annum 4 S.4510.97.sxw from 20th September 1997 being the amount last paid by the Defendants till little few days of filing of the Suit. 6. Learned Counsel Mr. Lokhandwalla had taken me through the evidence of PW-1 Mr. Ilango and had submitted that the evidence of Mr. Ilango, PW-1 has gone unchallanged and therefore, the Plaintiffs’ case is required to be accepted and an appropriate order is required to be passed in favour of the Plaintiffs. 7. I have considered the record and the submissions advanced by the learned Counsel for the Plaintiffs. The correspondence on record produced before the Court starting from Exhibits P to P-7 clearly indicates that the Plaintiffs had granted over draft facility to the Defendants and that the Defendants had enjoyed the same. It also shows that the Defendants had admitted their liability and had made part payments and promised the Plaintiffs to repay the debt. The correspondence at Exhibits P-1 and P-6 being letter dated 22nd April 1997 and 29th September 1997 respectively, go to indicate that the Defendants had admitted the liability and had requested the Plaintiffs to bare with the Defendants. This in my view is sufficient to hold that the Defendants had enjoyed the over draft facility. The evidence of Mr. Ilango, PW-1 coupled with the statement of accounts goes to establish that at the foot of the account a sum of Rs. 4,63,647.24 ps. was due and payable. The Plaintiffs would be entitled to the decree to that extent. 5 S.4510.97.sxw 8. On the question of interest, evidence of Mr. Ilango, PW-1 shows that the Plaintiffs were entitled to recover interest at the rate of 20% per annum upto 31st December 1996 and at the rate of 19% per annum from 1st January 1997 till 31st March 1997 with further interest at the rate of 19% per annum from 1st April 1997 till payment, has gone unchallenged. However, in the plaint, the Plaintiffs while mentioning the particulars of claim have calculated the interest at the rate of 19% per annum only and in the prayer also the Plaintiffs have prayed interest at the rate of 19% per annum. If this be so, I am inclined to grant the Plaintiffs interest at the rate of 19% per annum on the outstanding amount of Rs.4,63,647.24 ps. This amount of Rs.4,63,647.24 ps. is found to be outstanding as of 29th September 1997. Hence, the interest could be awarded to the Plaintiffs at the rate of 19% per annum from 30th September 1997 till passing of the decree. So far as the question of interest from the date of the passing of the decree, I am inclined to grant interest at the rate of 19% per annum as the transaction between the Plaintiffs and the Defendants was a commercial transaction inasmuch as the Defendants had the benefit of the loan amount and the said amount was used by them for their business. The Plaintiffs of course, will be entitled to costs of the Suit. 9. Before I part with the Judgment, it is required to be mentioned that the last amount paid by the Defendants was on 29th September 1997. The present Suit has been filed by 6 S.4510.97.sxw the Plaintiffs on 1st December 1997 and hence the institution of this Suit is within the period of limitation. 10. For the reasons mentioned aforesaid, I pass the following decree :- (i) The Defendants do pay to the Plaintiffs Rs. 4,63,647.24 ps. (ii) The Defendants do pay to the Plaintiffs interest at the rate of 19% per annum on Rs.4,63,647.24 ps. from 30th September 1997 till realization. (iii) The Defendants do pay to the Plaintiffs costs of the Suit. (R.Y. GANOO, J.)