Mangat Ram & Ors v. State Bank of India

PRADEEP NANDRAJOG, J.

J.R. MIDHA, J. November 26, 2008 rk

* IN THE HIGH COURT OF DELHI % Date of Order : November 26, 2008 + RFA 121/2005 MANGAT RAM & ORS. ..... Appellants Through: Mr.J.P.Verma, Advocate VERSUS STATE BANK OF INDIA ..... Respondent Through: Mr.Jawahar Chawla, Advocate CORAM: Hon'ble Mr.Justice Pradeep Nandrajog Hon'ble Mr.Justice J.R. Midha 1. Whether reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whether judgment should be reported in Digest? : PRADEEP NANDRAJOG, J.(Oral) 1. Learned counsel for the appellants urges that only two contentions are being pressed by him and notwithstanding various grounds urged in the memorandum of appeal he restricts his submission only on two counts. 2. Firstly that appellant No.1, Mangat Ram, had no concern with the cash credit facility granted by the bank to appellant No.2, the sole proprietary firm of appellant No.3, and hence counsel urges that the impugned judgment and decree dated 27.11.2004 is liable to be set aside vis-à-vis appellant No.1. Qua appellants No.2 and 3, counsel urges that the decree be converted into a simple money decree holding that property No.16- C, Ground Floor and Second Floor, Dhaka, Kingsway Camp, Delhi was never mortgaged when the cash credit limit was availed of by appellants No.2 & 3. 3. Relevant facts are that the respondent, State Bank of India, filed a suit alleging that on 11.6.2000, Brij Mohan, appellant No.3, being the sole proprietor of appellant No.2, approached the bank and requested for the grant of a cash credit limit in sum of Rs.5,00,000/- and in respect whereof the appellant No.1 stood guarantee and furnished, by way of equitable mortgage, collateral security of property bearing No.16-C, (GF & SF), Dhaka, Kingsway Camp. Alleging that the account became sticky and that Rs.4,52,550.86 was due, the suit was filed claiming pendente lite and future interest as per agreement between the parties i.e. @22.5% per annum with quarterly rests. 4. In a joint written statement filed it was pleaded by the appellants that in the name of appellant No.2, appellant No.3 had availed of a loan under the "Prime Minister's Rozgar Yojana" in sum of Rs.90,000/- and at that time certain blank documents were got signed from appellants No.1 & 3 which were stated to be utilized for creating documents relating to the alleged cash credit facility. In a nut-shell, vis-à-vis appellant No.1 he denied having offered any documents by way of equitable mortgage to be retained by the bank pertaining to the alleged cash credit facility granted in the name of appellant No.2. 5. In the replication, the bank changed tracks and averred as under: "……………………… It is submitted that the said Composite Term Loan was of Rs.95,000/-, was sought and granted to defendant No.2 in his personal name, whereas C.C. Limit was granted to the tune of Rs.5 Lacs as per request of the defendant No.2 contained in its Loan Application dated 03.03.2000. The defendant No.2 is fully aware about the same and even otherwise the Loan Documents placed on record clearly show the same in regard to the debt taken by the defendants from the Bank. The Composite Term Loan earlier to C.C. Limit is of no consequences after the grant of a higher credit facility as requested by the defendants. The Plaint is correct and based upon genuine documents." 6. Since limited issues are debated today, in appeal, we note the relevant relatable issues pertaining thereto, being Issue No.2 and 4. The same read as under: "2. Whether the defendant no. 3 had furnished collateral security by depositing the title deeds of his property no. 16-C (GF & SF). Dhaka Village, Kingsway Camp, Delhi to secure the alleged credit facility of Rs. 5 lakhs granted by plaintiff to defendant no. 1? OPP 4. Whether the defendant no. 3 had kept his property bearing no. 16-C, Dhaka Village, Kingsway Camp only to secure the alleged loan of Rs.90,000/- availed by defendants no. 1 & 2 on 23.3.2000 as alleged in para 2 of preliminary objections in WS? OPD"