1 s-531-99 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi SUIT NO. 531 OF 1999. Canara Bank, a body corporate constituted established and functioning under the Banking Companies (Acquisition and transfer of Undertakings Act, 1970, havin its Head Office at Bangalore, Karnataka State and also amongst Branches a Branch Office at Colaba, Mumbai-400 039. ..Plaintiffs. vs. Aminex Chemicals Limited, a company registered under the Companies Act, 1956 and having its business office at Milap Bhavan, 10th Road, Santacruz (E), Mumbai-400 055. ..Defendant. .... Mr. R.C. Dubey, i/b. Sanjeev Kanchan & Co., for Plaintiffs. None for Defendant. .... CORAM : S.J. KATHAWALLA, J. DATE : 24TH MARCH 2011. JUDGMENT: By the present Suit, the Plaintiffs have prayed for an order and decree against the Defendant to pay to the Plaintiffs a sum of Rs.6,05,252.89 with further interest thereon at the rate of 18.36% per annum compounded quarterly or at such other rate as this Court deem fit and proper from the date of filing of the Suit till payment and/or realisation. After the Writ of 2 s-531-99 Summons was served on the Defendant, Advocate Shri A.J. Bijlani had filed his appearance for the Defendant. However, since no written statement is filed by the Defendant, the Suit was transferred to the list of undefended Suits and has appeared for passing of an ex-parte decree. 2. Shri Kiran Kalekar, Manager / Officer and Power of Attorney Holder of the Plaintiffs has filed the Affidavit of Evidence dated 16th March 2011 along with compilation of Documents. The original Power of Attorney is produced before this Court. A photostat copy of the same is also tendered before this Court. After comparing the two, the original Power of Attorney is returned to the Plaintiffs. The photostat copy is taken on record and marked Exhibit ‘P-1’. 3. In the Plaint as well as in the Affidavit of Evidence of the Plaintiffs, it is stated as follows :- 4. The Defendant Company maintained a current account with the Plaintiffs being 5119 and was operating the said current account for depositing the various cheques and also making withdrawals from time to time. The original account operating form dated 7th June 1989 is tendered in Court. The same has been signed by the Director of the Defendant and the Manager of the Plaintiffs. In the said account opening form, the Defendant has inter-alia agreed as follows :- “We request and authorise you to honour all cheques or other order/s drawn on the said 3 s-531-99 account or bill of exchange accepted or notes drawn on behalf of the company and we request you to debit such cheques and other orders and bills of exchange and notes as also the amount of any dishonoured bills, notes and cheques to the said account whether such account be for the time being in credit or overdrawn and we agree and undertake to pay interest on all such amounts debited to our account at the rate/s as may be applicable to the overdraft accounts from time to time from the date/s of overdrawing/s upto the date overdrawing/s is/are cleared by us.” The said account opening form is marked Exhibit ‘P-2’. 5. The Defendant at the meeting of the Board of Directors held on 3rd April 1989 appointed the Plaintiffs as bankers of the Defendant and passed the following resolution :- “RESOLVED THAT Canara Bank, Colaba Branch be and are hereby appointed Bankers to the Company. RESOLVED THAT a current account be opened with Canara Bank, Colaba Branch in the name of the Company. THAT Mr.Mahipatrai Jadavji Shah, Mr. Deepak M Shah, Mr. Mehul M Shah Directors of the Company be and are hereby authorised to draw, accept, endorse, and negotiate cheques, hundies, bill of exchange, promissory notes and all negotiable instruments or railway receipts or other documents relating to goods lodged for collection or negotiated with the Bank to sign balance confirmation, to give receipts for any moneys, deeds, securities or other document or papers or property etc. to give indemnities or 4 s-531-99 any other instrument or enter into any transactions on behalf of the Company relating to the said account or accounts with the said bank at any times. Account will be operated singly by Shri Deepak M Shah and jointly by Shri Mahipatrai J shah/Shri Mehul M Shah.” The relevant extract of the minutes of the Directors meeting dated 3rd April 1989 signed by the Directors is marked Exhibit ‘P-3’. 6. According to the Plaintiffs, due to dishonour of the discounted cheques on 22nd February 1996, the said current account no.5119 of the Defendant showed a debit balance. The Plaintiffs therefore by their letter dated 29th February 1996 brought this fact to the notice of the Defendant and called upon the Defendant to clear the outstanding dues. The Defendant assured to clear the balance of Rs.10,86,228.74 in the said current account. A copy of the said letter dated 29th February 1996 is marked Exhibit ‘P-4’. 7. On 19th March 1996, the Chief Manager of the Plaintiffs Shri S.N. Gholba once again addressed a letter to the Defendant wherein after referring to the earlier letter of the Plaintiffs dated 29th February 1996, it was recorded that the Defendant has not taken any steps to clear the overdrawings of Rs.10,86,228.74 allowed in its subject current account. The said letter is marked Exhibit ‘P-5’. 5 s-531-99 8. According to the Plaintiffs, the Defendant thereafter under cover of its letter dated 3rd April 1996 issued a cheque of Rs.3,00,000/- for clearing the overdraft in the current account maintained by the Plaintiffs. The said letter is marked Exhibit ‘P-6’. The said cheque upon deposit was dishonoured. Thereafter, the Defendant by its letter dated 25th April 1996 forwarded to the Plaintiffs seven cheques aggregating to Rs. 5.25 lacs. The said seven cheques when presented were honoured leaving a balance of approximately Rs.5.60 lacs. The said original letter dated 25th April 1996 is marked Exhibit ‘P-7’. 9. The Manager of the Plaintiffs by his letter dated 16th May 1996 addressed to the Defendant acknowledged the payment of Rs.5.25 lacs. and requested the Defendant to arrange to clear its balance overdrawings immediately. The letter dated 16th May 1996 is marked Exhibit ‘P-8’. Since the Defendant failed to clear the said outstanding, the Plaintiffs by their Advocate’s letter/ Notice dated 6th May 1998 called upon the Defendant to pay an amount of Rs.5,14,166.89 along with interest at the rate of 18.36% with effect from 1st April 1998 within seven days from the receipt of the said notice, failing which the Plaintiffs would be constrained to take appropriate legal action. The notice dated 6th May 1998 is marked Exhibit ‘P-9’. 10. Since the Defendant failed to respond to the said notice or to pay any amounts outstanding to the Plaintiffs, the 6 s-531-99 Plaintiffs filed the above Suit seeking an order and decree against the Defendant to pay to the Plaintiffs a sum of Rs. 6,02,252.89 with further interest at the rate of 18.36% per annum compounded quarterly or at such other rate as this Court deems fit and proper from the date of filing of the Suit till payment and/or realisation. 11. I have gone through the averments made in the Plaint and also the contents of the Affidavit of Evidence along with the compilation of Documents filed by the Plaintiffs. From Exhibit ‘P-2’, it is established that the Defendant had opened a current account with the Plaintiffs and had requested and authorised the Plaintiffs to honour all the cheques or other orders drawn on the said account and further requested the Plaintiffs to debit the said cheques and other orders and bills of exchange and notes as also the amount of any dishonoured bills, notes and cheques to the said account whether such account is for the time being in credit or overdrawn. The Defendant also agreed and undertook to pay interest on all such amounts debited to its account at the rate/s as may be applicable to the overdraft account from time to time from the date of overdrawing/s upto to the date overdrawing/s is/are cleared by them. From Exhibit ‘P-8’, it is established that the overdrawings in the current account of the Defendant was in the sum of Rs. 5.75 lacs. as on 16th May 1996. From Exhibit ‘P-9’, it is established that though the Defendant was called upon to pay the balance outstanding along with interest at the rate of 18.36% with effect from 1st April 1998 within seven days from 7 s-531-99 the date of receipt of the said letter, the Defendant failed and neglected to pay any amounts to the Plaintiffs. From the Statement of Accounts maintained by the Plaintiffs marked Exhibit ‘P-10’, it is established that the Plaintiffs have maintained an account of the Defendant, and as on 28th January 1999 an amount of Rs.6,05,252.89 is due and payable by the Defendant to the Plaintiffs at the foot of the said account. The Writ of Summons was served on the Defendant pursuant to which on 26th March 1999 the Advocate for the Defendant filed his appearance. However the Defendant has thereafter not filed its written statement and none appear for the Defendant to defend the Suit. In view thereof, what is stated by the Plaintiffs has gone unchallenged. There is no reason why what the Plaintiffs have stated in the Plaint as well as in the Affidavit of Claim should not be accepted. 12. In the above circumstances, in my view, the reliefs sought by the Plaintiffs are required to be granted. In view thereof, I pass the following order :- (i) The Defendant is ordered and decreed to pay to the Plaintiffs a sum of Rs.6,05,253/- with further interest thereon at the rate of 18% per annum from the date of filing of the Suit till the payment and/or realisation. (ii) The Defendant shall pay costs of this Suit to the Plaintiffs. 8 s-531-99 (iii) Plaintiffs will be entitled to refund of Court fees, if any, as per Rules. (iv) The Suit is accordingly disposed of in favour of the Plaintiffs and against the Defendant. [ S.J. KATHAWALLA, J. ]