TaxTMI 
TaxTMI 
1991 (12) TMI 284
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..... 5. Though respondents 2 to 7 in R.F.A.No. 396/90 are not served but they are appellants in RFA No. 219 of 1991. Therefore, Sri S.P. Kulkarni, learned Counsel for the appellants in R.F.A. No. 219/91 submitted that he may be permitted to represent respondents 2 to 7 in R.F.A. No. 396/90. Accordingly, he is permitted to represent them, 6. The first defendant is a registered Private Limited Company having its registered office at Banavasi and administrative office at Bombay. Defendant No. 2 is the Managing Director of the first defendant Company as well as Glendale Fruit Processors Private Limited. Defendant No. 3, who died during the pendency of the suit was also one of the Directors of the 1st defendant company. Defendants 3 to 9 are also the members of the Board of Directors of the first defendant - Company, These facts are not in dispute. 7. The plaintiff-Bank filed the aforesaid suit for recovery of a sum of Rs. 26,66,407.24p with costs and also for interest at 15% p.a on the term loan, 19.50% p.a. on the S.O.D.H. loan and 18.50% p.a. on the P.C.L. Account. 8. The case of the plaintiff is that the first defendant - company obtained the following three types of loan f....
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....ree against the defendants personally, jointly and severally directing payment of Rs. 9,11,765.00 as mentioned in para-13 above due under S.O.D.H. A/C No. 8/82 with proportionate costs of the suit thereon and future interest at the rate of 19.50% per annum from the date of the suit till the date of realisation; ii) For a decree for the sale of the movable property described in schedule 'D' of the plaint for the plaint for the realisation of the amount claimed in para B(i) above and the surplus sale proceeds if any for the realisation of the dues claimed in para A(i) above; C(i) For a decree against the defendants personally, jointly and severally directing payment of Rs. 1,31,356.99 as mentioned in para-13 above due under P.C.L. Account No. 1/82 with proportionate costs of the suit and future interest at the rate of 18.50% per annum from the date of the suit till the date of realisation; ii) For a decree for the sale of the movable property described in Schedule 'E' of the plaint for the realisation of the amount claimed in para C(i) above and the surplus sale proceeds if any for the....
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....e Reserve Bank of India Circulars issued, from time to time; that the first defendant is a Small Scale Industry, therefore, the interest ought to have been charged as a Small Scale Industry and as permissible under the various circulars issued by the Reserve Bank of India; that there was no agreement to pay penal interest on overdue amount and compound interest with quarterly rests in respect of the loans advanced to the 1st Defendant. 17. The trial Court, on the basis of the pleadings of the parties raised as many as 19 issues which were as follows:- "1. Does plaintiff-Bank prove that defendants 2 to 9 as Directors of defendant No. 1 Company obtained loan credit facility of Rs. 10 lakhs O.D. facility of Rs. 6 lakhs and P.C.loan of Rs. 8 lakhs on 13.11.82 have executed suit documents and hypothecated the deed agreeing to repay the same along with interest thereon at the minimum rate of 15%, 19.50% and between 12.50% p.a to 18.50% p.a as the respective amounts to be compounded quarterly along with other incidental charges as contended in plaint paras 5 to 9 and 17? 2. Whether the plaintiff-Bank further proves that it has mai....
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....ections of R.B.I and therefore, defendants are not liable to pay the claim as contended by them vide para 14 of their W.S? 11. Whether defendants 1,2,6,8 and 9 further prove that this Court has no jurisdiction to try the present suit as the suit transaction not taken place within the jurisdiction of this Court as contended in para 18 of their W.S.? 12. Whether defendant No. 3 proves that deeds of guarantee were prepared at plaintiff's branch office at Banavasi and it was forwarded through post along with letter dated 10.11.1982 for the signature of 4 Directors including defendants 3,4 and 5 and the said letter was received after 13.11.82 at Bombay and therefore, signatures of defendants 3, 4 and 5 were taken only after 18.11.82 i.e., after the loan was advanced in favour of defendant No. 1 as contended in para 3 of his W.S? 13. Do defendant No. 3 further proves that plaintiff-Bank obtained 2 guarantee bonds from him without any consideration and that deed of guarantee not been executed by all the intended co-sureties undertaking defendant 3, 4 and 9 and therefore his liability stands discharged ....
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.... therefrom towards the decretal amount. When the net proceeds of such sale are found to be insufficient to pay the amount due to plaintiff-Bank, then the plaintiff is at liberty to apply for an order as contemplated under Order XXXIV Rule 6 CPC to recover such balance amount found to be legally recoverable from defendants 2 to 9 who are also jointly, severally and personally liable to pay the suit claim. A preliminary decree to be drawn accordingly.' 19. The plaintiff examined in support of its case the Manager of Banavasi Bank as P.W.1 and produced 36 documents which were marked as Exts.P 1 to P 36. The defendants examined two witnesses, one was the General Power of Attorney Holder of the legal representatives of defendant No. 3 and defendants 4 and 5, and also the Accountant of the 1st defendant Company at Banavasi who also held the Power of Attorney for defendants 1,2,6,8 and 9. They produced 7 documents which were marked as Exts. D 1 to D 7. 20. Having regard to the several contentions urged on both the sides, the following Points arise for consideration in this Appeal. 1. Whether the appellants R.F.A. ....
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....t Act, and RAM NARAIN v. LT.COL HARI SINGH. 23. It is no doubt true that the loans in question were sanctioned on 13.11.1982 as per Exts.D-8 and D-7 and pursuant thereto, the loans were disbursed on 13.11.1982. The specific case of the plaintiff-Bank is that the documents Exts,P-7 and P-8 were executed on 13.11.1982, the date on which the loans were disbursed, and therefore, they were supported by consideration. Even otherwise, it is contended by Sri Aswatharam, learned Counsel appearing for the Plaintiff-Bank that as per the provisions contained in Section 127 of the Contract Act, even the past consideration is a good consideration, it is also contended that the loans were granted on condition that the Directors should stand as sureties and and it was accepted by the Directors in the resolution passed by the Board of Directors, as per Ext.P-36, Therefore, even if the third-defendant has executed the surety Bonds, Exts.P-7 and P-8 on or subsequent to 18-11-1982, so long as, it is done pursuant to and in conformity with the terms of the sanction order and in compliance with the resolution of Board of Directors, it cannot be stated that the bonds are not supported by consideration....
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....agreement executed by the principal. The guarantee bond was not contemporaneous with the agreement executed by the principal. 27. In Chakhanlal's case the acknowledgment of an outstanding liability by the principal debtor by executing a fresh bond, was held to be good consideration even though the surety may not be benefited from any of the advance made. 27.1. In Ghulam Husain's case, the decision in Kali Charan's case and Chakhanlal's case and also the Decision in JAGADINDRANATH ROY v. CHANDRANATH (1904) 31 Cal 242 were followed. It was held that the word, "done" in Section 127 of the Contract Act indicated that past benefit to the principal debtor will be good consideration for a bond of guarantee. In that case, the guarantee bond was executed' after the lease-deed was executed by the principal. 27.2. In Jagadindranath Roy's case a lease of grass and forest produce was obtained by one 'S' for four years at an yearly rental of Rs. 14,597/-. A few days later, one 'M' executed a surety bond in a sum of Rs. 5,000/-. The surety died and his heirs asked the lessor to discharge them. Thereupon, the lessor called upon 'S' to furnis....
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....regret, I am unable to agree with the interpretation put by their Lordships in this judgment. It is giving the word 'done' an unnatural meaning. In Kali Charan's case AIR 1918 PC 226 the circumstances were that though the agreement was executed subsequently but it was in pursuance to an earlier agreement. Illustration (c) to Section 127 completely negatives a consideration which the Oudh Court has chosen to give to Section 127 of the Indian Contract Act. Apart from this the case originally set out by the plaintiff was that Ex.2 had for its consideration cash. The Lt.Col, had challenged this fact in his written statement and the plaintiff changed his case in the course of trial. No consideration qua Harisingh passed from the plaintiff at the time of execution of Ex.2 nor was anything done for his benefit on that day. The contract of guarantee, therefore, in my opinion, has been rightly held by the learned Judge to be one without consideration". 27.4. It is not possible to agree with the view expressed in Ram Narain's case. In Kali Charan's case, it was held in unequivocal terms, that anything done or any promise made for the benefit of the principal, may be su....
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....quest and the promise by the creditor to forbear should be such as is capable of being enforced. 27.6A. In that case, the surety bond, which was marked at Ext.A-26 was held to contain a vague provision without any specified time limit to forbear from taking action. Therefore, it was held that it was incapable of being enforced. It was also further held that it could not be taken to be a sufficient consideration to support the contract of guarantee. No doubt, in that case, the Division Bench Decision of the High Court Allahabad in NANAK RAM v. MEHIN LAL ILR 1875 All 487 was relied upon in support of the proposition that where the surety bond comes into existence after the original borrowing, the creditor must prove if he wants to proceed against the surety or guarantor, with any consideration of the contract of surety or guarantee, he did something or refrained from doing something. In other words, past consideration was not a good consideration for a surety bond, But, in Chakhanlal's case, a Division Bench of the very same High Court held, that the past consideration was a good consideration for a surety bond. 27.7. We, therefore, find it not possible to pursuade ourselve....
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....en it became due to insist on the payment by the defendant No. 1 of all the other instalments." 27.10. Therefore, we are of the view that Exts. P-7 and P-8 were supported by sufficient consideration. In the view we take, we do not consider it necessary to go into the questions as to whether the surety bonds were executed on 13-11-1982 or subsequent to 18-11-1982 and as to whether they were executed at Banavasi or at Bombay, as these aspects, in the light of the finding recorded above, become inconsequential. Accordingly, Point No. 1 is answered in the negative. 28. POINT No. 2: This defence of the third-defendant falls under the Section 144 of the Contract Act. In addition to this, it is also the contention of the third-defendant that even if it is held that no express or implied agreement is proved by the third-defendant between himself and the Plaintiff-Bank, as failing under Section 144 of the Contract Act, the equitable rule embodied in Section 144 of the Contract Act can be extended by drawing an inference from the proved facts that unless the surety bonds were executed by all the Directors, none was responsible to the liability incurred by the principal-debtor, Ex....
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....e is not valid as defendants Nos. 4 and 5 have not signed any guarantee. This defendant says that the said rule of equity is recognised by Section 144 of the Indian Contract Act. This defendant further says that the said holding company even though it appears that it has given a guarantee is not made a party defendant to the suit and on that ground also this defendant is discharged from his liability, if any, under the alleged guarantees". 30. Whereas, in the evidence, D.W.1, who held the power of attorney for defendant-3 and also holds a power of attorney for the legal-representatives of the deceased Defendant No. 3, has stated thus:- "Defendant No. 3 signed Ex.P-7, P-8, on 18-11-1982 on page-3 that day there was a phone call from the Manager, Syndicate Bank, Branch, Bombay Port. It was 3 PM then, the said phone call was to Defendant 3. He was absent. Therefore, said phone call was given to me. I talked on behalf of Defendant 3. The Manager Syndicate Bank, Bombay Fort Branch wanted D3 to go his office to see the documents. I informed the Manager that Defendant-3 should be available around after 5.30 PM. On that day, therefore, Manager asked me to inform de....
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....t follow that he believed that the testimony given could not be disputed at all. It is wrong to think that this is merely a technical rule of evidence, it is a rule of essential justice. It serves to prevent surprise at trial and miscarriage of justice, because it gives notice to the other side of the actual case that is going to be made when the turn of the party on whose behalf, the cross-examination is being made comes to give and lead evidence by producing witnesses. It has been stated on high authority of the House of Lords that this much a counsel is bound to do when cross-examining that he must put to each of his opponent's witnesses in turn, so much of his own case as concerns that particular witness or in which that witness had any share. If he asks no question with regard to this, then he must be taken to accept the plaintiffs account in its entirety. Such failure leads to miscarriage of justice, first by springing surprise upon the party when he has finished the evidence of his witnesses and when he has no further chance to meet the new case made which was never put and secondly, because such subsequent testimony, has no chance of being tested and corroborated." L....
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....eunder from Ex.P.7. "The Syndicate without exonerating the Guarantor may grant time or other indulgence of the Borrower or any other person or persons liable to the Syndicate on all or any of the obligations or liabilities guaranteed hereunder or in respect of cheques, Hundis, Bills, Drafts, Guarantees and undertakings and give up or modify or abstain from perfecting or taking advantage of any securities or contracts and discharge any party or parties and accept or make any composition or arrangement and realise any securities when and in such manner as the Syndicate may think expedient." 32 From the aforesaid para 5 of Ex.P.7, it is clear that even if the plaintiff failed to perfect the guarantee bond by getting it executed from other Directors, or even if the plaintiff were to discharge any of the sureties, such failure or action on the part of the plaintiff did not affect its right to enforce the guarantee bond against the executants. The recitals or terms contained in the aforesaid para 7 of Ex.P.7 are not consistent with the agreement pleaded by the 3rd defendant which, according to him, preceded the execution of Exs.P.7 and P.8. It is also relev....
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....es it. Therefore, there must be a contract between the creditor and a person who gives guarantee to the effect that the creditor shall not act upon the guarantee until the other person/s named in the surety bond joins or join as a co-surety or co-sureties. In such a case, the Section further declares that until such persons join or execute the surety bond, the guarantee will not be valid and it will not be enforceable against the executants who has executed on such understanding or agreement. The agreement may be oral, written, contemporaneous or anterior to the surety bond in point of time or it may even be incorporated in the surety bond itself. If it is incorporated in the surety bond, no further proof is required. In other cases, it is necessary for the surety to specifically plead and prove such an agreement. Of course, such an agreement can also be proved by drawing necessary inference from the proved facts or by the conduct of the parties. It all depends upon the facts and circumstances of each case. 33.1. In the instant case, no doubt the 3rd defendant has set up such an agreement but he has failed to prove the same as per the finding recorded by us in the preceding para....
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....t each surety has executed it individually and it is only when it is executed by more than one, it has to be construed as joint and several. Therefore, the question of the creditor entering into an agreement with the 3rd defendant that it would not enforce the surety bond against him unless the other Directors executed it was not at all within the contemplation of the parties. 34.3. However, Sri Holla, learned Counsel appearing for the 3rd defendant placing reliance on a Decision of the Supreme Court in BHAGWANDAS GOVERDHANDAS KEDIA v. GIRDHARLAL PARSHOTTAMDAS AND CO. AND ORS., [1966]1SCR656 contended that the Courts in India have generally been guided by the Rules of the English Common Law applicable to contracts where no statutory provision to the contrary is in force; that in the instant case, from the proved facts, it is possible to infer that there was an understanding between the plaintiff and the Directors of the 1st defendant-Company that all the Directors, as sureties, would be liable only if all the Directors execute the surety bond and that the surety bond will not be enforced against those who execute it if any one of the Directors failed to execute it. It is submitt....
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....itor and the surety is necessary, that another person would also execute the bond as co-surety or else he would be relieved of the liability as surety. This is also clear from the very passages relied upon by learned Counsel Sri Holla from Halsbury's Law of England, Sheldon and Fidler's "Practice and Law of Banking" and the Decision in Evans v. Brembridge and Ors.. We have also pointed out that having regard to the facts and circumstances proved in the case and the recitals contained in Ex.P.7 and P.8, no such agreement or understanding attracting Section 144 of the Contract Act was within the contemplation of the parties. 36. In Evans v. Brembridge And Ors., the Court, as a matter of fact, came to the conclusion that the intention of the parties to the deed was that there should be a joint and several liability on the part of the two co-sureties. Turner, L.J. who agreed with Knight Bruce, L.J. observed thus: "On the second point, I agree with Knight Bruce, L.J. Several cases were cited in the argument. I do not think it necessary to discuss them, for I concur in thinking that as the plaintiff entered into the obligation upon the understanding and f....
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....es and one of them not executing it, and the recitals in the surety bond are not leading to any joint and several liability would not by itself be sufficient to hold that the creditor is not entitled to enforce the surety against the executant or that the surety bond in the absence of execution by the other surety named therein is invalid and unenforceable. It all depends upon the facts and circumstances of each case as already pointed out above. Therefore, we are of the view that the aforesaid Statement of law made in Halsbury's Laws of England and Sheldon and Fidler's Practice and Law of Banking will not be of any help to the 3rd defendant. 37, We may also point out that in the instant case, it is not possible to draw an inference from Exs.D.6, D.7, Exs.P.7, P.8 and P.36 that there was an understanding between the plaintiff and the Directors of the 1st defendant Company including the 3rd defendant that all the Directors would join the surety bond and if any one of them failed to join, none was liable. Exhibits D.6 and D.7 are the letters of sanction dated 11-12-1982 and 27-9-1982 respectively, sanctioning the loans to the 1st defendant-Company. No doubt one of the cond....
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....t defendant, otherwise, the plaintiff-Bank would not have extended the banking facility. It was to serve their own interest and also the interest of the 1st defendant-Company, of which they were the Directors, they executed the surety bond. Exs.P.7and P.8 are surety bonds. They do not contain any recital to support the contention of the 3rd defendant. On the contrary, as already pointed out, the recitals belie any such understanding between the plaintiff and the 3rd defendant or other sureties. Therefore, it is not possible to hold that the circumstances relied upon by Sri Holla, learned Counsel for the 3rd defendant would lead to an inference that there was an understanding between the creditor and the sureties in terms of Section 144 of the Contract Act to the effect that the surety bond would be enforced only if all the sureties executed them and in default of any one of the sureties named therein in executing the surety bonds, all the other executants would not be liable as sureties. Therefore, the contention of Sri Holla, learned Counsel for defendant No. 3 is liable to be rejected. It is accordingly rejected. Point No. 2 is accordingly answered in the negative. POINT No. 2....
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....rom time to time remain unpaid shall be repayable at the rate of 5% per annum above the Reserve Bank of India rate subject to the minimum of 15% per annum on the 31st March, 30th June, 30th September and 31st December each year and also so long as the principal or part thereof remain unpaid." Para 4: "The borrower/s agrees/agree that if quarterly interest and/or any other instalment on due date is not paid, the arrears in the loan shall bear overdue interest at the rate fixed by the Bank for such loans from time to time until the interest and/or the instalment of the principal in arrears as the case may be are paid." Ex.P.3 is a letter dated 13-11-1982 written by the second defendant as the Managing Director of the first defendant to the Manager, Syndicate Bank, Banavasi Branch thanking the Bank for granting the loan of Rs. 10,00,000/- and further agreeing to pay overdue interest at 17,5% or such rates as may be charged by the Bank from time to time on the amount over due. He has also further stated that the first defendant-Company would waive the notice of variation of rate of interest from time to time as per the directions of the Reserve Bank of India....
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....ndant has given up right to notice of variation of rates of interest as per the directions of the Reserve Bank of India and has further stated that the notifying of the enhanced rates of interest on the Notice Board of the Bank would be sufficient notice to the first defendant Ex.P.15 a covering letter to Ex.P.12 - on demand pronote. Ex.P.16 is the deed of hypothecation hypothecating the goods to the plaintiff as security to the loan of Rs. 6,00,000/- granted under, S.O.D.H. A/C 8/82 dated 13-11-1982. Paras 11 and 12 of the deed are relevant which are as follows: "11. That interest at the rate of 9.50% above the Reserve Bank of India rate subject to minimum of 19-50% per annum or such other rate as may be fixed by the Bank from time to time and notified by the Bank in its notice board shall be calculated and charged on the daily balance in the Bank's favour until the same is fully liquidated and shall be paid by the Borrowers as and when demanded by the Bank. 12, We hereby agree to pay overdue interest at 21.5% or such rate as may be charged by the Bank from time to time on the amounts overdue in case of default," 44. A reading of ....
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....., 31st March. 30th June, 30th September, 31st December each year, so long as the amounts remain outstanding. The Borrowers also agree to pay to the Bank the processing charges/service charges ECGC premium and out of pocket expenses, if any." 46. From the aforesaid clause, it is clear that the defendant No. 1 has agreed that the plaintiff will be entitled to charge compound interest quarterly. Therefore, it is clear that in respect of the two loans granted under S.O.D.H. Account No. 8/82 and P.C.L. Account No. 1/82, there is a clear recital contained in the relevant documents referred to above for compounding of interest. Hence, in respect of these two loans, it is not possible to agree with the contention of the defendants that the first defendant has not agreed or compounding of interest. 47. No doubt there are no specific words contained in Exs.P.1 to P.4 pertaining to the OSL Account No. 17/82 to the effect that the first defendant has agreed for compounding of interest, however it is contended by Sri Aswatharam, learned Counsel for the plaintiff that the recitals contained in Clause 3 of Ex.P.2 leave no doubt that the first defendant has agreed for quarterly rests which ....
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.... India rate subject to the minimum of 15% per annum on the 31st March, 30th June, 30th September and 31st December each year and also so long as the principal or part thereof remain unpaid." would mean or should amount to agreeing for the compounding the interest with quarterly rest. 53. The contention of the defendants is that the meaning of the aforesaid words is to agree for payment of interest at the end of each quarter and does not amount to compounding of interest if it is not paid quarterly. They also take aid of contents of Clause (4) which provides that if the arrears of instalment and the interest are not paid, the bank will be entitled to recover overdue interest at the rate fixed by the bank for such loans from time to time. However Sri Aswatharam, learned Counsel for the Bank has placed reliance on the Reserve Bank of India Circular bearing DBCD No. Dir. BC.30/C/96-76 dated 13th March 1976. It is also referred to in GOWDA D.S. v. CORPORATION BANK 1982(2) KLJ 490: ILR 1982 (Kar) 353. The said Circular merely uses the expression "rest". The relevant portion of the Circular reads thus: "No scheduled commercial bank incorporated in India and hav....
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....erred to above, there is no doubt that a commercial bank like that of the plaintiff, is entitled to levy and recover interest at quarterly rest. The term 'rest' as explained above, means adding of interest at the end of the rest period to the principal and from that date onwards it would become part of the principal and the bank can claim interest on it just as principal or as part of the principal sum. Clause (3) of Ex.P.2 clearly states that the interest is payable at the end of each quarter and in the event it is not paid at the end of each quarter, the amount shall bear overdue interest at the rate fixed by the bank. The overdue interest being more than the interest agreed upon, the interest payable at the end of the quarter, if not paid, will bear not only the usual rate of interest but also the overdue interest. Thus, it is clear that the amount of interest becomes part of principal and it becomes an overdue amount unpaid on the date it became due. Therefore, the plaintiff Bank has maintained the accounts by indicating the quarterly rest and it has calculated interest at the end of the quarter and has added it to the principal. Defendant-1 has never raised any objecti....
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.... 59. Learned Counsel for the appellant in R.F.A.219 of 1991, has produced a letter dated 10-2-1986 issued by the Reserve Bank of India accompanied by various Circulars, annexed to the said letter. The said letter reads thus: "All Scheduled Commercial Banks, Dear Sirs, INTEREST RATES ON ADVANCES - CHART INDICATING RATES OF INTEREST PRESCRIBED BY THE RESERVE BANK. Of late, we are receiving a number of requests from private parties, courts and banks for furnishing them with the schedule of rates of interest on advances operative during different periods of time. As it involves copying of old directives as and when such requests are received, we have prepared an exhaustive chart indicating rates of interest operative from 1st October 1960 till the date of this circular. While Annexure-1 of the chart indicates the effective dates of minimum lending rates from 1st October 1960 to 22nd July 1974 and maximum lending rate from 2nd March 1968 till it was rescinded with effect from 21st January 1970 and reintroduced in 1976. Annexure-II and III give the position of rates of interest on advances prescrib....
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.... facility for the term loan in question was available from the IDBI, it is not open to the defendants to claim that the interest leviable on the term loan amount could not exceed 13.50%. It is not possible to accept this contention. Rate of interest chargeable by the Commercial Banks in respect of the term loan advanced to Small Scale Industry is governed by the Circular referred to by us above. The Circular does not state that the rate of interest at 13.50% in respect of the loan advanced to Small Scale Industry is applicable when there is refinancing facility by the IDBI. No doubt learned Counsel for the plaintiff relied upon the IDBI scheme, but we do not find it necessary to refer the same since there is no reference to IDBI scheme in the category No. VIII of advances by way of term loan made to a Small Scale Industry. 63. It is next contended that even charging the interest at 13.50% on the loan advanced on the OSL account, the defendants are liable to pay interest at 15% because they have not paid the principal sum and the interest as and when the same became due. As the principal sum and the interest became overdue as per Clause (4) of Ex.P.2, the bank was entitled to cla....
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....over due amount. Though this account extract was not produced before the trial Court, we have allowed it to be produced and marked it as Ex.P.37 because this extract goes in favour of the defendants and the calculations made therein are not disputed. Thus, as on the date of the filing of the suit, under the OSL loan account 17/82, the plaintiff was entitled to only Rs. 15,63,690/- and not Rs. 16,23,285.25 ps. The excess sum has to be disallowed in the light of the finding recorded by us and also in the light of Ex.P.37 fresh recalculated account extract filed by the Bank. Re: SODH Account No. 8/82: 64. It is contended by learned Counsel for the plaintiff that the first defendant availed the various loans from various branches of the plaintiff-Bank amounting to over Rs. 25 lakhs. Therefore, as per V Category of advances, the plaintiff-Bank is entitled to claim interest at the rate not exceeding 19.50%, 18% and 17.50% as mentioned in the Circular. In this regard, the learned Counsel for the plaintiff placed reliance on Ex.D.7 the sanctioned letter, it may be noticed in this regard that there is no plea raised by the plaintiff that the first defendant has availed the loans over ....
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....espect of the PCL loan in question are as follows: From 2-3-81 From 1-4-83 From 1-4-85. "5. Export credit not otherwise specified. Not exceeding 17.50% Not exceeding 16.50% Not exceeding 16.50% 66. It is not in dispute that PCL loan in question falls under the category of advances described as "Export Credit not otherwise specified". As per Ex.P.25, account extract pertaining to PCL 1/82, the interest is charged in accordance with the aforesaid rates plus the interest on the overdue amount at 2.5% because the first defendant did not pay the amount of instalments and the interest as and when the same became due. On the contrary, it is contended by Sri Aswatharam, learned Counsel for the plaintiff that even as per the aforesaid rates of interest, the Bank ought to have claimed Rs. 1,60,838.69 whereas it has claimed Rs. 1,31,356.99 ps. Therefore the decree is required to be modified in this regard. It is not possible to accept this contention because the original claim of the plaintiff itself is for Rs. 1,31,356.99 ps. As such it cannot be enhanced in appeal. Therefore, we are of the view that the plaintiff cannot be allowed to claim excess ....
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....ntention, 69. It is contended by Sri Udaya Holla for the 3rd defendant that the entries in the accounts extract are not proved because P.W.1 does not speak to any of the entries; that a mere production of the account extracts is no proof of it, hence the plaintiff-Bank cannot rely upon Exs.P.23 to P.25. In support of this contention, learned Counsel has placed reliance on a Decision of the Supreme Court in CHANDRADHARA GOSWAMI v. GAUHATI BANK LTD., [1967] 1 SCR 898 . 70. It is relevant to notice that nowhere in the written statements filed by the defendants particular entry in any one of the accounts extracts which were produced along with the plaint was challenged. In the case decided by the Supreme Court, referred to above, the defendant challenged the particular entry pertaining to Rs. 10,000/-but the plaintiff therein did not produce any evidence to prove that entry. Hence, the Supreme Court specifically held that the said entry was not proved. Therefore, in the absence of any challenge to any of the specific entries in the accounts extract, produced by the plaintiff and in the light of provisions contained in Section 21A of the Banking Regulation Act, it is not possible ....