IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION SUIT SUIT SUIT NO. 762 OF 1996. NO. 762 OF 1996. NO. 762 OF 1996. Central Bank of India, a body corporate constituted under the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 with its Head Office at Chandermukhi, Nariman Point, Bombay 400 021, and a branch amongst others at Purnima Apartments, 23, Pedder Road, Mumbai 400 026. ... Plaintiff. Versus. 1. Shri Balkrishna Govind Bhosle, of Bombay Indian Inhabitant and sole Proprietor of M/s.Vishal Packaging Works, having his office at a) Gala No.3, Amin Compound, Sonawala Cross Lane No.2, Goregaon (East), Bombay 400 063 and residing at b) Hanuman Nagar, Sawant Chawl No.2, Kurer Village, Malad (East), Mumbai 400 064. 2. Shri Kishore G.Savla of Bombay, Indian Inhabitant, residing at A-3, Padam Natakwala Lane, Borivali (West), Bombay 400 092 and proprietor of M/s.R.K.Industries C/9, Sukla Street, Oshiwara, Jogeshwari (West), Bombay. ... Defendants. Ms.Nityananthi Nadar i/by M/s.N.C.Dalal & Co. for the Plaintiff. None for the Defendants. CORAM CORAM CORAM : ABHAY S.OKA, J. : ABHAY S.OKA, J. : ABHAY S.OKA, J. DATED DATED DATED : 2nd November, 2007. : 2nd November, 2007. : 2nd November, 2007. ORAL ORAL ORAL JUDGMENT.: JUDGMENT.: JUDGMENT.: 1. The Plaintiff has filed this suit for recovery of various amounts due and payable by the Defendants at : 2 : 2 : 2 : the foot of the cash credit account as well as the term loan account. 2. According to the case of the Plaintiff, the 1st Defendant is carrying on business as the sole properietor of M/s.Vishal Packaging Works. On his request in April 1988 the Plaintif-Bank granted term loan facility in the sum of Rs.1 lakh and cash credit facility in the sum of Rs.50,000/- to the 1st Defendant. The 1st Defendant executed various documents for securing the loan. The 2nd Defendant guaranteed repayment of the amount due and payable under both the facilities by executing letters of guarantee. As the Defendants committed defaults, correspondence was made by the Plaintiff with the Defendants. On 30th April 1991 the 1st Defendant acknowledged the amount payable by executing a letter of acknowledgement. On 14th September 1991 the 1st Defendant executed a fresh set of security document in favour of the Plaintiff. Two more such letters were executed by him on 12th August 1994. The present suit is filed for recovery after giving a legal notice. 3. The 1st Defendant filed written statement raising various contentions. The 1st Defendant contended that the term loan facility was granted by the Plaintiff in favour of M/s.Pratap Machine Tools Co. The : 3 : 3 : 3 : other contention raised by the 1st Defendant was that he could not repay the amount payable under the cash credit facility as automatic printing machine on which loan was provided was not functioning properly. Another contention raised by the 1st Defendant is that he had paid a sum of Rs.34,000/- in the year 1995 to the Plaintiff. The 1st Defendant also disputed the rate of interest claimed by the Plaintiff. 4. Issues were settled as under: (i) Whether Plaintiff is entitled to a decree jointly and severally against Defendants Nos.1 and 2 in the sum of Rs.1,80,534.72 ps. which is inclusive of interest upto the date of filing of the suit with further interest at the rate of 19.75% p.a. with quarterly rests from the date of filing of the suit till payment or realization in respect of Cash Credit facility as prayed for in prayer (a) of the Plaint and costs of the suit? (ii) Whether Plaintiff is entitled to a decree jointly and severally against Defendants Nos.1 and 2 in the sum of Rs.66,488/- which is inclusive of interest upon the date of filing of the suit with further interest at the rate of 19.75% p.a. with quarterly rests from the date of filing of the suit till payment or realisation of Term Loan facility as prayed for in prayer (b) of the Plaint and costs of the suit? (iii) Whether the Defendant proves that the Plaintiff has suppressed any material facts from this Hon’ble Court as alleged by the Defendant No.1 in para No.1 of it’s written statement? (iv) Whether the Defendant proves that the Plaintiff has charged interest at : 4 : 4 : 4 : exorbitant rates and not in accordance with R.B.I. Rules as alleged by Defendant No.1 in the Written Statement? (v) Whether the Plaintiff is entitled to a declaration from this Hon’ble Court that the decretal amounts mentioned in issues Nos.1 and 2 are legally and validly secured by hypothecation of all moveable property like products, stock-in-trade and goods? (vi) Whether the 2nd Defendant is jointly and severally liable alongwith Defendant No.1 under the guarantees given to the Plaintiff for payment of decretal dues with further interest and costs of the suit? (vii) Whether the Defendant proves that the Law of Limitation bars the claim of the Plaintiff as alleged in para 15 of the Written Statement and as denied by the Plaintiff in para 19 of the plaint? (viii) Whether the Defendant proves that any of the documents and statements of accounts annexed to the plaint or referred to and relied upon in the plaint are false fraudulent or incorrect? (ix) To what reliefs the Plaintiff is entitled to? 5. On 22nd October 2007 the Plaintiffs examined one Mr.Changonda Babgonda Patil as their witness by filing his affidavit in lieu of examination-in-chief. None appeared for the Defendants on that day and therefore, the cross-examination of the said witness was treated as closed. The suit wad adjourned to 26th October 2002 for recording of evidence of the witness of the Defendants. On that day none appeared for the Defendants and therefore, evidence of the Defendants was treated as : 5 : 5 : 5 : closed and arguments were heard. Today when the suit is called out none appeared for the Defendants though the 1st Defendant is represented by an Advocate. 6. A perusal of the affidavit in lieu of examination-in- chief shows that the execution of the documents which are referred to paragraphs 3 and 4 of the plaint has been duly proved. The documents show the name of Vishal Packing Works as the name of the borrowers. The documetns have been executed by the first Defendant in his capacity as Proprietor of the Vishal Packing works. The original documents have been duly accepted. There is no challenge whatsoever to the examination-in-chief of the witness examined by the Plaintiffs. The burden to prove issue Nos.3, 4 and 8 was on the 1st Defendant. However, the Defendants have failed to discharge the said burden. Therefore, issue Nos.1 to 6 and 8 will have to be answered in favour of the Plaintiffs. 6. So far as issue No.7 is concerned, the Plaintiffs have proved the letters of balance confirmation dated 12th August 1994 executed by the 1st Defendant. The plaint has been lodged on 30th January 1996. Therefore, the claim in the suit is within limitation. The Plaintiffs have claimed further interest at the rate of 19.5% per annum. Considering : 6 : 6 : 6 : the facts and circumstances of the case further interest will have to be granted at the rate of 12% per annum. 7. Hence the following order is passed: i) The suit is decreed in terms of prayer clauses (a), (b) and (c) with modification that further interest payable on the principal amounts specified in Exh.J-1 and J-2 annexed to the plaint shall be at the rate of 12% per annum from the date of filing of the suit till realisation or payment. ii) The original documents shall be returned to the Plaintiff after the decree is sealed. iii) Certified copy is expedited. Judge. Judge. Judge.