1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.158 OF 1998 Bank of India ...plaintiffs vs. 1 Bipin Hiralal Shah 2 Mrs.Nayana Bipin Shah ...Defendants Mr.O.A.Das for the plaintiffs None for the defendants CORAM :A.S.OKA,J. DATE : DECEMBER 17, 2009 JUDGMENT : 1 The plaintiffs have filed this suit essentially for recovery of money which is due and payable by the defendants. The case of the plaintiffs is that the defendants were having overdraft account with the plaintiffs at its Bullion Exchange Branch. The case of the plaintiffs is that the defendants made a request for grant of overdraft against pledge of shares with a limit of Rs.1,00,000/-. Accordingly the request was granted. The defendants executed a demand promissory note in the sum of Rs.1,00,000/-. On the same date, a letter of continuing security, a letter of lien and set off and a letter of pledge in respect of the shares was executed by the defendants in favour of the plaintiffs. According to the case of the plaintiffs, the shares of 2 certain limited companies were pledged by the defendants in favour of the plaintiffs by way of security. The particulars of the shares are mentioned in Exh.F. As the defendants committed defaults, the present suit has been filed. The claim in the suit is for a decree in the sum of Rs.1,66,335.77 together with interest thereon at the rate of 17% per annum with quarterly rests. 2 The suit was contested by the defendants by filing a written statement. The defendants admitted that the overdraft facility was granted to them. It was contended that the said overdraft facility was not granted against the collateral security of equity shares. No other contentions were raised by the defendants. 3 On 31 st August 2009 issues settled which read thus : 1. Whether the plaintiffs prove that the defendants have executed and delivered the documents more particularly mentioned in Exhibit `A to `E to the plaint ? 2. Whether the plaintiffs prove that the defendants have availed the overdraft facility ? 3. Whether the defendants prove that they have instructed the plaintiffs to sell the pledged shares ? 4. Whether the plaintiffs is entitled to the reliefs 3 prayed for ? 5. What order ? 4 The plaintiffs examined one Mr.Madhukar Modak, authorised officer by filing his affidavit in lieu of examination-in-chief. The plaintiffs have produced various original documents relied upon by them. When examination-in-chief of the said witness was recorded on 3 rd December 2009, none appeared for the defendants and the said witness was not cross examined. Even thereafter, the defendants have not appeared. 5 The demand promissory note in the sum of Rs. 1,00,000/- dated 10 th February 1995 executed by the defendants has been duly proved. The defendants have also proved the execution of the letter of continuing security of the same date, a Letter of lien and set off of the same date and a letter of pledge in respect of the shares. The execution of the documents by the defendants has been duly proved by the witness examined by the plaintiffs. An office copy of the demand notice dated 30 th October 1997 has been placed on record. A certified extract on accounts of the defendants is placed on record which shows the debit balance of Rs.1,66,335.77 as on 15 th December 2009. 4 6 In the affidavit in lieu of examination-in-chief the witness stated that on 12th September 2003 the first defendant submitted a letter to the plaintiffs requesting the plaintiffs to sell the pledged shares and appropriate sale proceeds against his liability under the overdraft account. It is stated that accordingly, the shares were sold and sale proceeds have been credited to the account. In the affidavit, it is disclosed that the defendants have paid a sum of Rs.25,106/- during the pendency of the suit. It is disclosed that certain dividends were received on the said shares. During the pendency of the suit, the plaintiffs have received a sum of Rs.1,44,668/- towards the dividends, sale proceeds of the shares and the aforesaid amount of Rs.25,106/-. The learned counsel for the plaintiffs stated that all pledged shares have been sold. 7 On the basis of the documents at Exh.P-1 to P-8, the plaintiffs have proved that on the date of institution of the suit the liability of the defendants was to the extent of Rs.1,66,335.77. Therefore, the issues will have to be answered in favour of the plaintiffs. The plaintiffs have claimed further interest on the overdraft amount at the rate of 17% per annum at the quarterly rests. A substantial amount has been recovered by selling the pledged shares. Considering these facts, further interest will have to be granted at the rate of 9% per annum. 8 Hence, I pass the following order : i) The suit is decreed in terms of prayer clauses (a) and (h) with modification that further interest will be payable at the rate of 9% per annum from the date of filing the suit till realisation. The plaintiffs 5 shall give credit of a sum of Rs.1,44,668/- to the defendants which was received from time to time from the defendants by adjusting the amounts against the amount due on the respective dates on which the amounts were received. JUDGE