IN THE HIGH COURT OF BOMBAY AT AURANGABAD. First Appeal No. 63 of Decided on :

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1 IN THE HIGH COURT OF BOMBAY AT AURANGABAD First Appeal No. 63 of 1994 Decided on : Navjivan Industries, registered partnership firm, Kisandas Supduram Totla, Pradeep Kisandas Totla and Sunil Kisandas Totla Vs. Dena Bank, Constituted under the Banking Companies Act and S.M. Thepde Hon'ble Judges: V.R. Kingaonkar, J. Counsels: For Appellant/Petitioner/Plaintiff: Ankush Nagargoje, Adv. holding for V.J. Dixit, Sr. Adv. For Respondents/Defendant: G.V. Wani, Adv. for Respondent No. 1 Subject: Banking Catch Words Mentioned IN Acts/Rules/Orders: Banking Companies Act; Evidence Act - Section 34; Bankers Books Evidence Act, Section 4; Civil Procedure Code (CPC) Cases Referred: United Bank of India v. Naresh Kumar and Ors. AIR 1997 Supreme Court 3; Canara Bank v. Eastern Mechanical Works and Anr. AIR 2008 Bombay 188; State Bank of India v. Yumnam Gouramani Singh AIR 1994 Supreme Court 1644 Disposition: Appeal dismissed JUDGMENT V.R. Kingaonkar, J. 1. This appeal is directed against judgment and decree rendered by the learned Civil Judge (S.D.), Jalgaon, in a money suit (Spl.C.S. No. 3/1987).

2 2. The appellants are original defendant Nos. 1 to 4. The Respondent No. 1 is plaintiff-bank and Respondent No. 2 is the guarantor for loans which were allegedly availed by the appellants. 3. There is no dispute about the fact that the appellant No. 1 is a registered partnership firm and the appellant Nos. 2 to 4 are partners thereof. The Respondent No. 1 is a Bank duly constituted under the Banking Companies Act. 4. Briefly stated, case of the plaintiff bank was that the defendant Nos. 1 to 4/appellants sought loans. The loan proposals were considered and as per sanction of the competent Officer, the following loans were sanctioned to them. (a) Cash Credit Pledge of Rs. 2,00,000/- (Rupees two lacs). (b) B.P. limit of Rs. 1,00,000/- (Rupees one lac). (c) Cash Credit Hypothecation loan of Rs. 4,00,000/- (Rupees four lacs). (d) Term loan for construction of building Rs. 1,00,000/-. (e) Term loan for purchase of machinery of Rs. 1,50,000/- (Rupees one lac fifty thousand). A total amount of Rs. 9,50,000/- (Rupees Nine lacs fifty thousand) was made available to them for carrying on their business. They executed documents for repayment of the loan. The defendant No. 5/Respondent No. 2 guaranteed repayment of the loans and executed necessary documents. The defendants executed a Demand Promissory Note for Rs. 4,00,000/- (Rupees four lacs) on It was agreed that the defendants would pay interest at the rate of Rs. 18 % p.a. on the principal amount, with quarterly rests. They executed documents like letter of continuity etc. at the material time. They further agreed to repay the loan amounts within the period of four (4) years after initial three (3) months period which was required for completion of the formalities in respect of the loan transactions. Though initially there was no guarantor, yet, subsequently the defendant No. 5/Respondent No. 2 entered into an agreement with the plaintiff-bank. He executed deed of guarantee and accepted the liability to repay the loan for and on behalf of the appellants/defendant Nos. 1 to 4. The transactions are entered into regular bank accounts. The amounts deposited by the appellants were credited to their accounts. It was found that an amount of Rs. 2,03,813/- (Rupees two lacs three thousand eight hundred thirteen) was due towards term loan, an amount of Rs. 1,12,166/- (Rupees one lac twelve thousand one hundred sixty six) was due towards another term loan and Rs. 5,17,895/-

3 (Rupees five lacs seventeen thousand eight hundred ninety five) was due towards cash credit facility. They did not pay these amounts inspite of demands. Consequently, the suit for recovery of loan amounts was laid. 5. By filing their written statement (Exh.42), the appellants resisted the suit. They objected mode of filing the suit. They asserted that the plaint is not signed by the authorised person and, therefore, the suit was not maintainable. They denied to have executed the Hypothecation deed, Deed of Guarantee and the Demand Promissory Note. They denied all the material averments made by the plaintiffbank. They contended that the bank officials had obtained their signatures on blank papers which were being misused. They denied execution of the hypothecation deed and other documents in favour of the plaintiff-bank. They also denied the agreement for interest at the rate of Rs. 18% p.a. They alleged that the plaintiff-bank did not make available the sanctioned loan amounts, well in time, and hence, they have been put to loss in the business. They pleaded that the suit is barred by limitation. Hence, they sought dismissal of the suit. 6. The Respondent No. 2/defendant No. 5 resisted the suit. The substance of the defence put forth by the defendant No. 5 is that the deed of guarantee and other documents are falsely prepared by the plaintiff-bank. He has not, in fact, accepted the guarantee for repayment of the loans. He sought dismissal of the suit on the above premises. 7. The parties went to trial over issues settled at Exh.53-A. On merits, the trial Court held that the suit claim is duly proved. The trial Court repelled contentions of the appellants and the Respondent No. 2. The trial Court accepted the plaintiffs case and decreed the suit. 8. Mr. Nagargoje, holding for Mr. Dixit, learned Senior Counsel would submit that the plaint is defective for want of signature and verification by duly authorised Officer of the plaintiff-bank. He would submit that P.W. 1 Sitaram had no authority to depose for and on behalf of the plaintiff-bank. He would further submit that the suit could not be entertained when the claim is clearly barred by limitation. According to Mr.Nagargoje, the plaintiff-bank relied upon the xerox copy (Exh.79) which is inadmissible in evidence. He would submit that the trial Court committed patent error while admitting the mortgage deed in evidence. He contended that the suit claim is not proved. He urged, therefore, to allow the appeal. Per contra, Mr.Wani, learned advocate supports the impugned judgment. He contended that the findings of the trial Court are legal and proper. He, therefore, sought dismissal of the appeal. 9. The core issues involved in the appeal are thus: (i) Whether the plaint was legally presented and duly signed by the authorised person.?

4 (ii) Whether the plaintiff-bank duly proved that loan amounts were sanctioned and disbursed in favour of the appellants/defendant Nos. 1 to 4 and the suit amount was found due against them. (iii) Whether the suit is barred by limitation. 10 Before I proceed to consider objections regarding maintainability of the suit, let it be noted that the technical defect, if any, is curable. It is version of P.W.1 Sitaram that the plaint is signed by Shri Nervekar. His version further reveals that Shri Nervekar was authorised by the plaintiff-bank to file the suit. He corroborates certified copy of Power of Attorney (Exh.83). The evidence on record reveals that Shri Nervekar, was attached to the plaintiff-bank as Regional Manager in its Office at Mumbai. The version of P.W. Sitaram purports to show that Power of Attorney is executed by General Manager of the plaintiff-bank. He states that the Power of Attorney (Exh.83) is executed by General Manager Shri Ramswami. There is sufficient evidence on record to show that Regional Manager Shri Nervekar, was duly authorised to sign the plaint on behalf of the plaintiff-bank. 11. In United Bank of India v. Naresh Kumar and Ors. AIR 1997 Sc 3, the Apex Court observed as follows: In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. Considering the above observations, it will have to be said that the presentation of the plaint was valid and there is no substance in the objection raised by the appellants in respect of maintainability of the suit. 12. On behalf of the plaintiff-bank, two witnesses were examined. P.W. 1 Sitaram is accountant and claimed that he was conversant with the transactions between the plaintiff-bank and the appellants. Another witness is P.W.2 Shrikisan. He is also the bank employee. The version of P.W. Sitaram purports to show that the appellants submitted an application (Exh.66) for loan. The appellants gave details of assets and liabilities vide their statements (Exhs.67 to 69). The Regional Office of the plaintiff-bank sanctioned the loans vide letter (Exh.70). According to P.W. Sitaram, the appellants agreed to mortgage their plot and constructed premises by way of security for repayment of the loan. They also executed Demand Promissory Note for another loan of Rs. 4,00,000/- (Rupees four lacs). He corroborated recitals of the Demand Promissory Note (Exh.71). He deposed that the contents of the Demand Promissory Note were read over to the appellants at the material time. They signed the D.P. note in his presence. His

5 version further corroborates execution of the hypothecation deed (Exh.72) and letter of continuity (Exh.73) by the appellants. 13. The version of P.W. Sitaram reveals that the entries of the loan transactions are taken in the ledger book. He states that the copy of ledger book (Exh.80) is duly signed by the branch Manager of the plaintiff-bank and has been certified as per the Bankers Book. The copies of ledger extracts (Exh.81 and Exh.82) are corroborated by him. His version purports to show that at foot of the account, amount of Rs. 8,34,124/- (Rupees eight lacs thirty four thousand one hundred twenty four) was found due from the appellants. 14. So far as evidentiary value of the entries in the Banks ledger book is concerned, it may be stated that the provisions of Section 34 of the Evidence Act and Section 4 of the Bankers Books Evidence Act, (1891) are attracted herein. Mr. Nagargoje, would point out that the plaintiff-bank relied upon only a xerox copy of the mortgage deed (Exh.79). He would submit that the trial Court should not have allowed such xerox copy to be placed on record. I find it difficult to countenance the contentions of Mr. Nagargoje. In Canara Bank v. Eastern Mechanical Works and Anr. MANU/MH/0961/2008, this Court held that objection pertaining to admissibility of document ought to be taken at the stage of proving the document. It is further held that the contents of Bankers Ledger Book can be relied upon. In State Bank of India v. Yumnam Gouramani Singh MANU/SC/0395/1994, the Apex Court held that entries in the Books of Accounts maintained by the Bank have presumptive value. In the present case, the entries in the Bank ledger account are duly corroborated by P.W. Sitaram. The copy of the ledger account (Exh.80) is photocopy of the original Bankers Ledger Book. However, no objection was raised when the document was tendered in the course of evidence. 15. The plaintiffs case is further corroborated by P.W. Shrikisan. His version shows that loans were sanctioned to the appellants for various purposes including cash credit facility by hypothecation, for construction of building, for purchase of machinery and against bill of purchasing (B.P.). His version reveals that the appellants were called upon to furnish guarantee vide letter dated (Exh.103). This letter is written in his hand. The appellants lateron offered guarantee of the defendant No. 5/Respondent No. 2. He executed the deed of guarantee dated (Exh.107). His version further shows that stock statement dated (Exh.108) is executed and signed by defendant No. 3 Pradip Totala for and on behalf of other defendants. Nothing of much importance could be gathered from his cross-examination. 16. Though P.W. Sitaram admits that there was separate account of Pledge loan, yet, in the next breath, he clarified that no copy of extract of the Bank ledger pertaining to Pledge account was filed because that account was cleared off. He admits that witnesses Shri Birla and Shri S.R. Agrawal, were clerks attached to

6 the plaintiff-bank and they attested the mortgage deed purportedly executed by the appellants. He also admits that the mortgage deed does not bear signatures of the appellants. However, there is other reliable material on record to infer that the appellants obtained the loan amounts as alleged by the plaintiff-bank. It need not be reiterated that the entries in the Bankers Book can be relied upon in support of other documents. The loan transactions are corroborated by the documents viz. D.P. note, mortgage deed, hypothecation deed and deed of guarantee. 17. Mr. Wani, pointed out that the loans availed by way of Cash Credit of Rs. 2,00,000/- (Rupees two lacs) and Rs. 1,00,000/- (Rupees one lac) have been repaid and, therefore, no claim was set up by the plaintiff-bank on that score. It appears, therefore, that the plaintiff-bank did not make an attempt to manipulate the entries in the Ledger account. When the loans were repaid then the plaintiffbank did not put forth any false claim in respect of the Cash Credit facility made available to the appellants/defendant Nos. 1 to 4. The suit transactions are of hypothecation loan of Rs. 4,00,000/- (Rupees four lacs), term loan for building which was of Rs. 1,00,000/- (Rupees one lac) and term loan for purchases of machinery which was of Rs. 1,50,000/- (Rupees one lac fifty thousand). The unpaid amounts in respect of these three loans were claimed through the suit. There appears no substance in the contention of the appellants that their signatures were taken on blank forms and documents. They did not dispute entries regarding repayments of the loan amounts. The testimony of DW 1 Pradip reveals that he was unable to tell the details of repayments made in the three loans mentioned above. He admits that the letter (Exh.105) bears his signature. He further admits that the letter (Exh.106) is also in his hand. He states, however, that the contents of the letter (Exh.106) are incorrect. He further admits that in his written statement he did not demonstrate inaccuracies contained in the letter (Exh.106). It is conspicuous that the appellants admitted the loan transactions as per the contents of the letter (Exh.105). They admitted correctness of the outstanding amounts which are shown in the letter. In fact, the contents of the letter (Exh.105) would demolish the defence of the appellants in respect of charging of excessive interest by the plaintiff-bank and excessiveness of the amounts claimed from them. 18. The evidence on record shows that the loans were partly repaid. The accounts were running. The appellants and the respondent No. 2 executed deed of guarantee (Exh.107) on 15th February It is the acknowledgment of debt. The suit is within perio dof three (3) years from date of this document. The appellants could not show how the suit is time barred. Hence, it will have to be said that the suit is not barred by limitation. 19. Considering the foregoing discussion, I have no hesitation in holding that the plaintiff-bank duly proved the suit claim. I am in general agreement with the

7 reasoning of the trial Court. I do not find any substantial error committed by the trial Court while appreciating the evidence on record. The suit was not barred by limitation. Needless to say, the impugned judgment and decree will have to be maintained. Hence, the appeal is dismissed with costs.