IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO. 475 OF 1990 SUIT NO. 475 OF 1990 SUIT NO. 475 OF 1990 Central Bank of India a body corporate constituted under the Banking Companies (Acquisition and Transfer of the Undertaking) Act, 1970 and having its Head Officer at Chandermukhi, Nariman Point, Bombay- 400 021 and a Branch amongst other at 25/31 Dr.Atmaram Merchant Road, ... Plaintiff. Bhuleshwar, Bombay- 400 002. V/s. 1. Dhiren Textiles, a Partnership firm carrying on business at 182/184 Ganpat Bhavan, 3rd floor, 1st Fanaswadi, Bombay- 400 002. 2. Nareshkumar Bhurmal Jain of Bombay Indian Inhabitant carrying on business at 182/184, Ganpat Bhavan, 3rd floor, 1st Fanaswadi, Bombay- 400 002. 3. Indermal Bhurmal Sanghvi of Bombay Indian Inhabitant carrying on business at 182/184, Ganpat Bhavan, 3rd floor, 1st Fanaswadi, Bombay- 400 002. ... Defendants. Ms.I.Sen i/b. Gagrats for the plaintiff. None for the defendants. CORAM: V.C.DAGA, J. CORAM: V.C.DAGA, J. CORAM: V.C.DAGA, J. DATED: 21st February, 2008. DATED: 21st February, 2008. DATED: 21st February, 2008. JUDGMENT : JUDGMENT : JUDGMENT : -------- -------- -------- . The plaintiff- Central Bank of India ("Bank" for short) has filed this suit against defendant No.1- M/s.Dhiren Textiles, a partnership firm and defendant Nos.2 and 3 being partners of defendant No.1 for the recovery of their outstanding dues in the sum of Rs.5,79,138.48 under current account of defendant No.1 and also claimed future interest thereon from the date of suit till realisation. 2. It is the case of the plaintiff that since May 1988 the plaintiff- Bank, in their ordinary and regular course of banking business, was maintaining a current account in the name of defendant No.1 in its Buleshwar Branch. At the request of the defendants, the Bank permitted them to make withdrawals in the current account against the cheques which had been deposited by them for collection with the Bank in their current account. Such withdrawals were permitted by the Bank even before the cheques so deposited for collection were cleared and the proceeds thereof received by the Bank on behalf of the defendants. It is further case of the plaintiff- Bank that specifically at the request of the defendants said withdrawals were - 3 - permitted by the bank as and by way of overdraft and the amounts so permitted to be withdrawn under the current account by the defendants were in the nature of loans and advances granted by the Bank to the defendants, which the defendants were bound and liable to repay to the Bank with interest. 3. It is the case of the plaintiff that by such withdrawals and the temporary overdraft granted by the plaintiff bank to the defendants under the said current account and by reason of the cheques deposited for collection not being realised, the said current account became overdrawn. That as on 21st October, 1988, a sum of Rs.4,30,992.97 was overdrawn and stood to the defendants debit under the said current account. The defendants by their letter of acknowledgment have acknowledged their liability to the Bank in the said amount as on 21st October, 1988 and agreed and undertaken to pay the same with interest within three months. In consideration of the plaintiff- Bank having permitted the said overdrawings to be made by the defendants in the said current account and in order to secure repayment thereof the defendants have executed, in favour plaintiff- Bank, a promissory note for Rs.4,30,992.97 duly signed by defendant Nos.2 and 3 as partners of defendant No.1 as also in - 4 - their individual capacity; a letter of continuing security; and a letter of partnership to the effect that defendant Nos.2 and 3 being partners are liable to the plaintiff’s dues, all dated 21st October, 1988. By further letter dated 19th December, 1988, the defendants have agreed and undertaken to make payment of their above mentioned dues to the Bank. Accordingly, the plaintiff- Bank continued to maintain the said account in the name of defendant No.1. 4. Since the defendants failed and neglected to repay the outstanding dues as agreed by them, the plaintiff by its letter dated 13th July, 1989, inter alia; called upon the defendants to pay the outstanding dues with interest. In spite of the said letter, defendants failed and neglected to make any payment. The plaintiff, therefore, by their advocate’s letter dated 18th October, 1989 again called upon the defendants to pay their dues with interest with notice to them that in the event of their failure the plaintiff would be compelled to adopt legal proceedings. Since the defendants failed to repay the dues, consequently, plaintiff was constrained to file suit in this Court for recovery of their outstanding dues with interest. - 5 - 5. On being served with writ of summons, defendants appeared and filed their written statement. The defendants have admitted of their having current account with the plaintiff- Bank, however, contended that the accounts were not properly maintained by the Bank. They further admitted that they made withdrawals from the said current account and that they had deposited several cheques for collection. They further admitted that in the month of October, 1988 they had requested the plaintiff- Bank to allow overdraft facility to them and that in lieu thereof several bank documents were executed by them, however, their contention is that when the said documents were executed the said documents were blank and were filled in subsequently by the plaintiff without knowledge to the defendants. The defendants denied all other contentions of the plaint. They also denied that to have acknowledged their liability. Defendants admitted receipt of plaintiff’s letters dated 13th July 1989 and 18th October, 1989 but denied the correctness of the statements made in the said letters. The defendants though admit that they had requested the plaintiff- Bank for overdraft facility and signed various documents but deny that any such overdraft facility was granted to them by the plaintiff bank. The defendants contended that - 6 - correct accounts were not rendered by the plaintiff- Bank to them as such they denied to have failed and neglected to repay their outstanding dues. Accordingly, defendants by their written statement denied their liability. 6. Considering the pleadings of the parties, the issues were framed vide order dated 18th September, 2007, reading as under: ISSUES FINDINGS 1. Whether the plaintiff proves Yes. that a sum of Rs.4,30,992.92 was standing to the debit of the Current Account of the Defendants as on 21st October, 1988 under the credit facility granted by the plaintiff to the Defendants for withdrawal against cheques? 2. Whether the plaintiff proves Yes. that the defendants by letter of acknowledgment of debit dated 21st October, 1988, acknowledged the liability of Rs.4,30,922.97 as averred in paragraph 5 of the plaint? 3. Whether the plaintiff proves Yes. that defendants executed promissory note dated 21st October 1988 as averred in paragraph 5 of the plaint? 4. Whether the plaintiff proves Yes. that a sum of Rs.5,79,278.48 is due from the Defendants as averred in paragraph 9 of the plaint? 5. Does the Defendants prove that No. - 7 - no such credit facility of withdrawal against cheques granted to the defendants as alleged in paragraph 3 of the written statement? 6. Whether the defendants prove No. that they have not executed the promissory note and other documents? 7. Whether the defendants prove No. that they have not admitted their liability vide their letters dated 21st October 1988 and 19th December 1988? 8. Whether the defendants prove No. that they are not jointly and severally liable to pay Rs.5,79,138.48 and interest @ 16.5% p.a. to the plaintiff? 9. Whether the defendants prove No. that they have not accepted the liability to repay Rs.4,30,922.27 by executing promissory note dated 21.10.1988? 10. What order? As per final order. 8. Pursuant to the aforesaid order dated 18th September, 2007, the plaintiff was directed to file affidavit of evidence and documents. Accordingly, an affidavit in lieu of evidence in support of the suit claim together with original documents including extracts of accounts duly certified under the Bankers Books Evidence Act were filed by the plaintiff- Bank. All the documents were proved by the plaintiff through their affidavit. Nobody was - 8 - present on behalf of the defendants either to cross-examine the affiant or to challenge the legality or validity of the documents executed by defendant Nos.2 and 3 in favour of the plaintiff- Bank. Under these circumstances, evidence of the plaintiff together with documents went unchallenged. The plaintiff- Bank has proved their claim together with their right to recover the amount with interest thereon. The plaintiff- Bank has also proved existing liability against the defendants and outstanding dues, due and recoverable from them on the basis of the extract of accounts duly certified under the Bankers Book Evidence Act. There is no dispute that the defendants had approached the plaintiff- Bank and requested for overdraft facility under their current account. It is also proved that for grant of said facility, the loan documents were executed by the defendants and the said facility was granted by the plaintiff- Bank and utilised by the defendants. It is also proved that under said current account and in view of overdraft facility granted in their favour, amounts were withdrawn by the defendants and the liability of the Bank has been acknowledged by the defendants and that the Bank has to recover suit claim as set out in the plaint. The suit claim is not barred by limitation. The plaintiff has not claimed any excess amount by - 9 - way of interest. The defendants, since did not appear and did not lead any evidence in order to discharge burden which was placed on them by virtue of issue Nos.5 to 9, I am constrained to hold that the defendants have failed to prove the said issues, whereas the plaintiff has proved issue Nos.1 to 4. As such, plaintiff- Bank is entitled to a decree in terms of the suit claim. 9. In the above view of the matter, suit filed by the plaintiff deserves to be decreed in toto with slight modification of rate of future interest on the decretal amount which has to be at the prevailing rate of bank interest. Hence the following order: ORDER (i) The suit is decreed in terms of the prayer clauses incorporated in the plaint. (ii) The defendants do pay Rs.5,79,138.48, with interest on the decretal amount i.e. suit claim calculated thereon from the date of suit till payment or part payment thereof at the rate of 10% - 10 - per annum with costs. (iii) Decree be drawn in terms of this order. (V.C.DAGA, J.) (V.C.DAGA, J.) (V.C.DAGA, J.)