TaxTMI 
TaxTMI 
TaxTMI 
1985 (11) TMI 206
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....as well. Defendant No. 1 approached the plaintiff for executing a deferred payment guarantee in the sum of Rs. 6,18,390 in favour of Messrs. Techno Exports of Sofia (Bulgaria) from whom the necessary plant and equipment was being imported by the said defendant for the setting up of a dehydration factory at Rai. The plaintiff agreed to execute a deferred payment guarantee in favour of Messrs Techno Exports in the aforesaid sum. Defendants Nos. 2 to 6 became guarantors for payment of the said amount to the plaintiff. Defendants Nos. 5, 6 and 8 created equitable mortgages of the properties as follows: SI. No. Person who mortgaged the properties Properties mortgaged 1. Defendant No. 5 Plot situated in Mohalla Shahdana, Madhovan, Bareilly. 2. Defendant No. 6 Plot No. 10, Block G, situated in 35, Civil Lines, Ahara, Kothi Nawaleranpur, Bareilly. 3. Defendant No. 8 A plot of land measuring 711 sq. yards out of Khasra No. 504 situated in Mauza Pathanpura, Court Road, Saharanpur. Defendant No. 1 executed two mortgage deeds dated October 6, 1972, and December 12, 1972, for Rs. 6,18,319 and Rs. 71, respectively), with respect to its properties in favour of the bank as de....
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....e at a penal rate on the balances due. The plaintiff gave cash credit (hypothecation) limit of Rs. 6,00,000 on February 26, 1972, to defendant No. 1. Defendants Nos. 2 and 3 stood guarantors for payment of the said amount. With effect from March 14, 1973, the limit of Rs. 6,00,000 was enhanced to Rs. 6,50,000. Defendants Nos. 2 and 3 further became guarantors for the enhanced amount. The plaintiff, at the request of defendant No. 1, granted to it a clean term loan of Rs. 5,00,000 on April 2, 1973. Defendant No. 1 executed a mortgage deed dated April 2, 1973, in favour of the plaintiff regarding the properties mentioned at page 3 of the judgment. Defendant No. 1 again approached the plaintiff and requested for the enhancement in the limit of the cash credit (hypothecation) limit of Rs. 6,50,000 to Rs. 7,50,000. However, the plaintiff, instead of enhancing the aforesaid limit, granted to defendant No. 1 another cash credit (hypothecation) limit to the extent of Rs. 1,00,000. Defendant No. 2 became guarantor for payment of the amount found due in that account from the company. The plaintiff gave another cash credit (hypothecation) limit of Rs. 7,50,000 at the request of defendant ....
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....unt of defendant No. 1 on September 12, 1978, on account of the seventh installment of deferred payment guarantee. Thus, after giving credit of the amounts received from defendant No. 1 and debiting the amount of Rs. 55,233.03, an amount of Rs. 54,80,652.90 became due from defendant No. 1. An amount of Rs. 15,45,989.33 became due by way of interest from November 1, 1977, to July 8, 1979, a day prior to the date of institution of the suit. Thus, the total amount which was due on that day came to Rs. 70,26,642.23., Consequently, the plaintiff filed a suit for recovery of Rs. 70,26,642.23 with future interest at the rate of 15 per cent. per annum till the date of payment against defendants Nos. 1 to 7 jointly and severally and for recovery of Rs. 2,32,203.35 with future interest at the rate of 2½ per cent. per annum till the date of recovery against defendant No. 8 by sale of the mortgaged/hypothecated property. A tabular form containing the particulars of the loan facilities is attached herewith as annexure "A". Now, I advert to the facts of C.P. No. 75 of 1982. The plaintiff, as already mentioned above, executed in favour of Messrs Techno Export a deferred payment guarantee ....
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....ct with the Registrar of Companies, Delhi and Haryana. Defendants Nos. 2 and 4 took the pleas in the written statement that their signatures were obtained on blank forms. Consequently, they were not liable to pay the amount claimed. They also pleaded that Mr. S.K. Kalia was not authorised to file the suit and that the plaintiff had not complied with the provisions of section 125 of the Companies Act with regard to registration of charges. Some other pleas were also taken which are reflected in the issues. Defendants Nos. 3, 6 and 8 have in their written statements taken similar pleas as have been taken by defendants Nos. 2 and 4. Defendant No. 8 took another plea that the amounts of the instalments relating to deferred payment guarantee account were transferred to the cash credit account of the company and, consequently, he stood discharged from payment of the amount. Both the suits were consolidated, vide order dated July 28, 1983. Defendant No. 3 subsequently made an application for amendment of the written statement. He was allowed to amend the written statement and take the plea that the suit was bad for misjoinder of parties and causes of action. On the pleadings of the part....
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....lation 77. It has been held by G.C. Mital J. in State Bank of India v. Kashmir Art Printing Press, Sirsa [1981] PLR 300; [1983] 54 Comp Cas 56 that branch managers had the authority not only to sign the pleadings and verify them but also had the authority to sign vakalatnama to authorise an advocate to file the suit or to file the same themselves. It was further held that the larger authority granted to the branch managers to sign plaints, written statements, etc. should include the power to file suit, written statement, etc. The aforesaid view was followed by me in State Bank of India v. Haryana Rubber Industries ( P.) Ltd. [1985] 2 PLR 8; [1986] 60 Comp Cas 472. It is not disputed that Mr. S.K. Kalia through whom the suit has been filed was working as branch manager. Consequently, I hold that he was authorised to file the suit. Issue No. 2.-R.L. Aggarwal, U.D.C, Office of the Registrar of Companies, Delhi and Haryana, deposed that defendant No. 1 created the following charges on its assets in favour of the plaintiff: Date of charge. Date of receipt of Form '8' in the Office of the Registrar of Companies Amount of charge. Whether the charge was registered or not 1 2....
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....to the company various loan facilities as mentioned in annexure "A" and got five types of documents executed from it and the guarantors. Those were agreements in Forms K & L, guarantee deeds in Form I (Spl), pronotes and mortgage deeds. Agreements in Form K were got executed from the company for hypothecation of its goods in favour of the bank and agreements in Form I for hypothecation of its debts and assets in favour of the bank. Agreements in Form I (Spl) were got executed from the guarantors for payment of the loans taken by the company. The pronotes were got executed from the company in favour of the guarantors. Thereafter, the bank got them endorsed from the guarantors in its favour. Thus, the company and the guarantors both became liable to pay back the loan taken by the company to the bank. The bank also obtained registered mortgage deeds from the company and equitable mortgages from some of the guarantors. The mortgage deeds were obtained in the case of two loans, namely, clear term loan of Rs. 5,00,000 and deferred payment guarantee as mentioned at serial Nos. 3 and 1, respectively, in annexure "A". The equitable mortgages were obtained from defendants Nos. 5, 6 and 8 wit....
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....ning instalments, i.e., Nos. 3 to 11. It is to be seen now who are the guarantors for payment of the said amount and what are their liabilities. Defendants Nos. 2, 3, 4, 5 and 6 executed a guarantee deed dated nil (exhibit P-3) in favour of the bank and undertook to pay the amount of guarantee jointly and severally in case the company failed to do so. The following terms and conditions in the deed are relevant: "(i)This guarantee and/or undertaking shall remain in full force and virtue until repayment of all dues under the said import agreement dated September 4, 1967, entered into by and between the company and the said Messrs Techno Export of Sofia for the import of the machinery for setting up of the dehydration plant. (ii)This guarantee and/or undertaking shall be in addition to and not in lieu of any other indemnity, guarantee, security (ies) that the bank may at any time have from any person(s)". Defendants Nos. 5, 6 and 8 created equitable mortgages of their properties for payment of the said loan by depositing the title deeds of their properties dated April 22, 1958 (exhibit P-7), dated October 20, 1955 (exhibit P-4), and dated February 12, 1960 (exhibit P-5). Thus, de....
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.... are liable to pay the said amount with future interest to the bank as guarantors. Now, the liabilities of defendants Nos. 3 and 5 to 8 have to be determined. Their liabilities shall have to be determined taking into consideration the guarantees given by them. As already stated, the accounts for which they gave guarantees are mentioned in annexure "A" against each item in column 5. First, I shall take the case of defendant No. 8. It is argued by Mr. Suri that an amount of Rs. 62,000 was deposited by the company with the bank, according to the agreement between the bank and the company, for deferred payment guarantee account. According to him, that amount is still due to the company and defendant No. 8 is entitled to the benefit of that amount. On the other hand, Mr. Chhibbar has argued that the amount of Rs. 62,000 was not deposited by the company in the bank and, therefore, the company and defendant No. 8 are not entitled to the adjustment of the said amount. I have duly considered the argument and find force in the contention of Mr. Suri. The agreement dated June 23, 1970 (exhibit P-1), between the company and the bank provides that the company shall deposit with the bank a su....
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....ircumstances, he argues, the court should include the amount of the seventh installment in the amount claimed against defendant No. 8. In support of his contention, he made reference to Mehar Chand v. Milkhi Ram, AIR 1932 Lah 401 [FB]. I agree with the submission of Mr. Chhibbar. The following observations of the Full Bench in the above case may be read with advantage (headnote):"...the pleadings of the parties should not be too strictly construed. It is, therefore, the duty of the courts to mould the relief to be granted to the plaintiff according to the facts proved which, however, should not be inconsistent with his pleadings". I am in respectful agreement with the above observations. In the present case, all the facts have been given in the plaint by the plaintiff. It appears that, through oversight in the prayer clause, the amount claimed from defendant No. 8 does not include the seventh instalment. The observations of the Full Bench in Mehar Chand's case, AIR 1932 Lah 401 [FB], are fully applicable to the facts of the present case. Consequently, I am of the opinion that the plaintiff is entitled to recover the seventh instalment along with the amounts of third to sixth insta....
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....son or persons relating to the debt hereby secured and the bank shall be at liberty to call for and take any other security or securities in any form in addition to or in lieu of the security hereby created and the bank shall have full authority to take recourse to enforce the security hereby created or any other security or securities which the bank may at any time have either against one or all simultaneously or at different time or times at its sole discretion, no enforcement of any other security or the failure to enforce any other security or securities shall not in any way prejudicially affect the security hereby created or company's covenants and/or obligations hereunder". Defendant No. 8 created an equitable mortgage by handing over the documents of title to his property to the bank. It is thus clear that the bank, the company and the guarantors had agreed that if the bank would accept the guarantee of other persons subsequently, the liabilities of the previous guarantors would not be affected. Mr. K.L. Bhatia, officer in the advances department of the State Bank of India (P.W. 2), appeared in the witness-box and stated that in 1970 he was dealing with deferred payment gua....
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....held that the surety stood discharged from his liability. In Ishar Singh's case, AIR 1953 Punj 337, in an application under section 20 of the Arbitration Act, the plaintiff asked for attachment before judgment. The court issued warrants of attachment conditional upon the furnishing of a surety in the sum of Rs. 1,000. The surety was furnished by one A and the warrants were withdrawn. A few days later, the plaintiffs applied for the sealing of the workshop of the respondent and for appointment of a receiver. B stood surety to the extent of Rs. 10,000 and the matter was not proceeded with further. There was no mention of the first surety at the time the second surety was given and there was nothing to show that the liability arising under the first surety deed was preserved or excluded from the sum of Rs. 10,000 mentioned in the, second surety deed. In view of the aforesaid circumstances, it was observed that B's surety deed took the place of A's surety deed and the latter, therefore, stood discharged. In the present case, as already discussed above, there were various agreements between the parties that on furnishing fresh sureties or additional sureties, the original sureties will ....
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....1750% as contained in item II(i) above. I have given my thoughtful consideration to the argument and gone through the statement of accounts of the company produced by the bank (exhibit P-66), the balance confirmation slips (exhibits P-32, P-31 and P-64) and the statement of interest on the outstandings in the protested bills account from November 1, 1977, to July 8, 1979 (exhibit P-67). The defendants never raised any objection about the statement of accounts (exhibit P-66). On the other hand, the balances in that account were confirmed, vide exhibits P-32, P-31 and P-64. I, therefore, agree with Mr. Chhibbar that the defendants cannot be allowed to say that the interest was not correctly debited in the account. Consequently, I am of the view that the amounts mentioned in the confirmation slips (exhibits P-32, P-31 and P-64) and the statement of accounts (exhibit P-66) are correctly given. In exhibit P-64, an amount of Rs. 55,04,645.72 is shown as due from the company as on December 31, 1977. Shri Chander Sen Gandhi (P.W-11), who was the manager of Bahalgarh branch in 1977 and 1978, affirms in his statement that exhibit P-64 shows the balance amount as on December 31, 1977. Conseq....