1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD. FIRST APPEAL NO.233 OF 1995 WITH CIVIL APPLICATION NO.1486 OF 1995 WITH CIVIL APPLICATION NO.1487 OF 1995 WITH CIVIL APPLICATION NO.4001 OF 1995 WITH CIVIL APPLICATION NO.1736 OF 1995 1) Ramdas Keshav Amle, Age­Major, Occu:Agril., 2) Kusum s/o Ramdas Amle, Age­Major, Occu:Agril., 3) Bhanudas Keshav Amale, Age­Major, Occu:Agril., 4) Kailash Keshav Amale, Age­Major, Occu:Agril., All R/o­Gondegaon, Tq­Shrirampur, Dist­Ahmednagar. .... APPELLANTS. VERSUS 1) The United Western Bank Ltd., Satara. A Body Corporate constituted under the Indian Companies Act VII of 1913 having its Regd. Head Office at 172/4 Raviwar Peth, Shivaji Circle, Satara 415 001 and Branch Office inter alia at Shrirampur, Dist­Ahmednagar. 2 2) Kachru Asaram Khadake, Age­Major, Occu:Agril., R/o­Gondegaon, Tq­Shrirampur, Dist­Ahmednagar. 3) Narayan Madhav Tambe, Age­Major, Occu:Agril., R/o­Gondegaon, Tq­Shrirampur, Dist­Ahmednagar. .... RESPONDENTS. ... Mr.V.V. Tarde Advocate h/f. Mr. A.B. Kale Advocate for the Appellant. Mr.N.T. Tribhuvan Advocate h/f. Mr. D.V. Soman Advocate for Respondent No.1. Respondent Nos. 2 and 3 are formal party. ... CORAM: K.K. TATED, J. JUDGMENT RESERVED ON : 6TH JULY, 2009. JUDGMENT PRONOUNCED ON: 14TH JULY, 2009 JUDGMENT: 1. The present First Appeal preferred by original defendant Nos. 1 to 4 against the Judgment and decree dated 17th October, 1994 passed by Civil Judge, Senior Division, Shrirampur in Special Civil Suit No.114 of 1992. Respondent No.1 is original plaintiff and Respondent Nos. 2 and 3 are original defendant Nos. 5 and 6. To avoid the confusion in the nomenclature, the parties herein after will be referred to as they 3 appear in the Suit proceeding. In the present First Appeal defendant Nos. 1 to 4 challenged the Judgment and decree dated 17th October, 1994 passed by Civil Judge, Senior Division, Shrirampur on the ground that the lower court failed to take into consideration that the rate of interest charged by the plaintiff Bank was never agreed upon by them. Defendant Nos. 1 to 4 (hereinafter referred to as "the defendants") also contended that the lower Court ought to have held that the documents produced before the Court were not duly proved. It is the case of the defendants that the lower Court ought to have given some consideration taking into consideration of situation of scarcity of water prevailing in that area and ought to have given installments for repayment considering the huge amount involved. 2. A few facts of the present case are that, the plaintiff Bank filed a Suit for recovery of sum of Rs. 2,03,694/­ against the defendant Nos. 1 to 4 as principal borrowers and against defendant Nos. 5 and 6 as guarantors. Defendants are agriculturists. They requested the plaintiff Bank , Shrirampur Branch to 4 sanction Rs.1,10,000/­ as a term loan to them for the purpose of purchasing new tractor for their agricultural business. The plaintiff Bank agreed to sanction the term loan amount to the defendants on the following terms and conditions: "a) That the defendants no. 1 to 4 shall agree to execute Demand Promissory note in favour of plaintiff bank for sanctioned amount of loan, b) That the defendants no. 1 to 4 shall agree to guarantee the repayment of the principal amount interest accrued and costs by two sureties as guarantors who shall accept joint and several liability of repayment of principal together with interest and they shall execute General Form of Guarantee in favour of plaintiff bank and shall be continuing guarantee. c) That the defendants no. 1 to 4 shall agree to execute Term Loan agreement of Hypothecation of Trailor, Tractor and other movables. d) That the defendants no. 1 to 4 shall agree to execute Agreement of 5 Hypothecation of standing crops in the lands owned by them, e) That the defendants no. 1 to 4 shall agree to pay interest at the rate of 12.5 p.c. p.a. with quarterly rests with condition of capitalization of due unpaid amount of interest with principal and to charge interest on such amount at the agreed rate, so also the interest shall be charged as would be determined by the bank as per the directions of Reserve Bank of India. The rate of interest of plaintiff bank is dependent upon the bank rate and directives of R.B.I. declared from time to time. At the time of disbursement it was 12.50% and from 9.10.91 it is 15.5 + 2% penal interest. f) That the repayment of loan shall be made within five years in equal yearly installments with default clause." 3. Thereafter the plaintiff bank sanctioned loan to the tune of Rs.1,10,000/­ to the defendants for the purpose of purchasing tractor and trailor. Defendants obtained Rs.1,10,000/­ on 3rd February, 1987 from the 6 plaintiff Bank at Shrirampur Branch against the securities executed by them as follows: "A) Demand Promissory note executed by the defendant Nos. 1 to 4 for Rs. 1,10,000/­ on 3/2/1987, B) Term Loan Agreement of Hypothecation of Trailor, Tractor and other moveables executed by Defendants 1 to 4 on 3/2/1987, C) Agreement of Hypothecation of standing crops in their lands executed by defendants No. 1 to 4 on 3/2/1987, D) General Form of Guarantee executed by defendants No.5 and 6 on 3/2/1987." 4. After taking the loan, the defendants purchased the tractor. Defendants agreed to repay the loan amount of Rs.1,10,000/­ with interest within five years in five installments as follows: Sr.No. Installment amount Date of payment 1) Rs.22,222/­ April,1988 2) Rs.22,222/­ April,1989 3) Rs.22,222/­ April,1990 4) Rs.22,222/­ April,1991 5) Rs.22,222/­ April,1992 5. As the defendants failed and neglected to pay the loan installments from time to time, the plaintiff 7 issued demand notice on 17th August, 1990 calling upon the defendants to repay the said loan amount. Inspite of the said demand notice, defendants failed and neglected to repay the loan amount along with the interest, the plaintiff filed Special Civil Suit No. 114 of 1992 in the Court of Civil Judge, Senior Division, Shrirampur for recovery of a sum of Rs. 2,03,694/­ along with the interest at the rate of 17.50% p.a. from the date of institution of the Suit till the recovery of decretal amount. The said suit came to be filed on 19th December, 1992. 6. The defendants filed their written statement on 20th April, 1993 and denied their liability to repay the said loan amount on the ground that the plaintiff bank obtained their signatures on blank documents. Defendants further contended that they never agreed to pay the interest at the rate of 17.50% per annum. They further submitted that they never agreed to pay penal interest on the loan amount. They further denied the execution of promissory note, hypothecation documents and guarantee deed. They further denied their liability to the tune of Rs.2,03,694/­ as claimed by 8 the plaintiff in their Suit. 7. The defendant No.6 filed his written statement dated 21st October, 1993 and denied his liability to pay the loan amount with interest. 8. Points for consideration arises in the present Appeal are as under: "(i) Whether the defendants are liable to pay interest? (ii) Whether the defendants proved that they executed all blank documents?" 9. Learned counsel appearing on behalf of the defendants submitted that plaintiff Bank never informed the defendants that they have to pay interest at the rate of Rs.12.50 Paise per annum on quarterly basis plus penal interest if there is delay. He further submitted that these defendants do not know English and whatever documents produced by the plaintiff were signed by defendants when those were blank. Therefore, these defendants are not liable to pay the sum of Rs.2,03,694/­ with further interest at 9 the rate of 17.50 per annum to the plaintiff. In the alternative, the defendants submitted in their Appeal Memo that considering the huge amount involved in the present case, Court should have given them facility of installments for repayment. 10. Learned counsel appearing on behalf of the plaintiff submitted that the defendants executed promissory note, term loan agreement of hypothecation, agreement of hypothecation of standing crops and general form of guarantee at the time of taking the loan. Defendants further agreed to pay the interest at the rate of 12.50 % per annum with penal interest if there is delay in payment of installments. He submitted that inspite of several demands, defendants failed and neglected to repay the loan amount with interest and therefore they filed Special Civil Suit for recovery of the amount. He submitted that all documents were proved by their witness PW1 Sadashiv Vasudeo Dhopeshwarkar. He further pointed out that, in the trial Court, Advocate for the defendants as well as defendant Nos. 5 and 6 were absent at the time of cross examination of PW1. 10 11. With the assistance of learned counsel for the parties, I have gone through the Record and Proceedings of the present case. It is crystal clear that defendants approached the plaintiff for loan of Rs.1,10,000/­ for purchasing tractor, trailor and other accessories and executed all required documents as stated herein above. Defendant Nos. 5 and 6 also executed general form of guarantee and stood guarantors to the defendants. The trial Court considered all the documents on record and held that plaintiff proved that they are entitled to recover a sum of Rs.2,03,694/­ with interest at the rate of 15.5% per annum on principal amount from the date of filing of the suit till the date of decree and at the rate of 6% per annum from the date of decree till the realization of the amount. From the Appeal Memo and written statement of defendants, it is crystal clear that they admitted the loan amount of Rs.1,10,000/­ and asked some installments for repayment of the same. Once the principal amount is admitted, the question remains about the payment of interest. The documents executed by defendants clearly show that they agreed 11 to pay interest at the rate of 12.50 % per annum with 2% per annum penal interest. They have also agreed that if there is change in rate of interest as per guidelines of Reserve Bank of India, they will pay the revised rate of interest. The trial Court passed decree for sum of Rs.2,03,694/­ with future interest from the date of decree till the realization at the rate of 6% per annum. Therefore, I do not find any substance in the submissions of learned counsel for the defendants that they never agreed to pay the interest at the rate as disclosed in the Plaint as well as in the Judgment. 12. About execution of documents, it is crystal clear that all these documents as mentioned herein above duly signed by the defendants. With the assistance of learned counsel appearing for the parties, I have gone through Exhibit 44 which is Promissory Note, Exhibit 45 ­ Term Loan Agreement of Hypothecation/movables, Exhibit 46­ Agreement of Hypothcation of standing crops and other movable assets, Exhibit 47­ General Form of Guarantee. All these documents are duly signed by the defendants. 12 There is no substance in the submission made by learned counsel appearing on behalf of the defendants that these defendants signed all these documents as blank. One thing is clear that the defendants admitted in their written statement that they borrowed a sum of Rs.1,10,000/­ from the plaintiff bank for purchasing the tractor, trailor etc. Not only that, their case in the Appeal Memo is also that considering the drought situation in that locality as well as involvement of huge amount, Court should grant some installments to them. Therefore, it is clear that defendants borrowed a sum of Rs.1,10,000/­ with agreed rate of interest and failed and neglected to repay the same to the plaintiff bank. In similar way, defendant Nos. 5 and 6 stood as guarantors but failed and neglected to pay the loan amount with interest to the plaintiff bank on behalf of the principal borrower i.e. defendant Nos. 1 to 4. Therefore, there is no substance in the present First Appeal and the same is liable to be dismissed. Though the defendants raised specific ground in Appeal Memo about granting installments for repayment of the loan amount, I do not find that defendants are entitled any installments at this stage. The Judgment 13 and decree passed by the trial Court on 17th October, 1994 i.e. before 15 years. Till today the defendants failed to repay the decretal amount to the plaintiff. 13. In view of the above mentioned facts and circumstances, Appeal preferred by the defendant Nos. 1 to 4 fails and same is rejected. Considering the facts in the present case that the loan was taken by agriculturists, there is no order as to the costs. 14. In view of the dismissal of First Appeal, nothing survives in Civil Applications and therefore all the pending Civil Applications are disposed of. [K.K. TATED, J.] asb/JULY09/fa233.95