Bank charge registration and guarantor liability upheld where registrar failed to complete registration under loan securities.

Authority of a branch manager to institute suits was recognised where bank regulations empowered branch managers to sign and commence proceedings. Filing the prescribed charge particulars with the Registrar was treated as sufficient for registration when no objection was communicated before liquidation, so the bank was not penalised for the Registrar's omission. Liability under the loan, mortgage and guarantee documents remained enforceable according to each instrument: the principal debtor and guarantors were bound by their undertakings, while equitable mortgagors answered only to the extent of the security created. Interest was recoverable under the contract, but only at the rate proved by the documents and a lower post-suit rate fixed by the court.

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Issues: (i) whether the branch manager was authorised to institute the suits; (ii) whether the charges created in favour of the bank were to be treated as registered notwithstanding the Registrar's failure to complete registration; (iii) whether the defendants were liable for the suit amount and the extent of the liability of the sureties and mortgagors; and (iv) the plaintiff's entitlement to interest and the applicable rate.

Issue (i): Whether the branch manager was authorised to institute the suits.

Analysis: The bank was governed by its parent statute and the General Regulations framed thereunder. Under the relevant regulations, empowered officers could sign and complete legal documents on behalf of the bank, and the authority given to branch managers included the power to institute proceedings. The branch manager who filed the suits fell within that category.

Conclusion: The branch manager was authorised to institute the suits.

Issue (ii): Whether the charges created in favour of the bank were to be treated as registered notwithstanding the Registrar's failure to complete registration.

Analysis: The requisite particulars of charge had been filed with the Registrar. No defect was communicated to the bank before liquidation intervened. The duty of the charge-holder was held to end on filing the prescribed particulars and supporting instruments, after which the responsibility for registration shifted to the Registrar. The bank could not be penalised for the Registrar's omission.

Conclusion: The charges were treated as duly registered.

Issue (iii): Whether the defendants were liable for the suit amount and the extent of the liability of the sureties and mortgagors.

Analysis: The documentary record showed the grant of multiple loan facilities, deferred payment guarantees, hypothecation arrangements, mortgage deeds, and guarantees. The accounts and balance confirmations established the outstanding liability. The court held that the principal debtor remained liable, the guarantors remained bound by their undertakings, and the equitable mortgagors were liable only to the extent of the security created by them. It was also held that subsequent or additional securities did not discharge earlier sureties where the instruments expressly preserved the bank's right to enforce all securities cumulatively. The plea of discharge on account of transfer of entries between accounts was rejected. The court further accepted that the pleadings justified recovery of the omitted seventh instalment against the mortgaged property, applying the principle that relief may be moulded to the proved facts where consistent with the pleadings.

Conclusion: The defendants were liable for the outstanding amounts, with the principal debtor and sureties liable according to their respective undertakings and securities, and the mortgagor's liability remaining confined to the mortgaged property where so limited.

Issue (iv): The plaintiff's entitlement to interest and the applicable rate.

Analysis: The loan and guarantee documents expressly provided for interest. The bank's claim to charge interest was upheld, but the higher rate sought in the statement of account was not accepted because the bank failed to prove the underlying advance rate. The court therefore applied the contractual minimum rate supported by the documents and granted post-suit interest at a lower judicially fixed rate.

Conclusion: The plaintiff was entitled to interest, but not at the higher rate claimed; interest was allowed at the rate fixed by the court.

Final Conclusion: The suits were decreed in favour of the bank for the proved outstanding amount, with liabilities apportioned according to the respective securities and guarantees, and with interest granted at the rate determined by the court.

Ratio Decidendi: Where the charge-holder has filed the prescribed charge particulars and the Registrar fails to complete registration without communicating objections, the charge-holder is not to suffer for the Registrar's omission; and where the contractual instruments preserve the bank's right to enforce all securities, later securities do not discharge earlier guarantors or mortgagors unless the documents so provide.

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