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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH : NAGPUR
First Appeal No. 171 of 1997
Appellant : Bank of Baroda, through its Sitabuldi
Branch, Nagpur
versus
Respondents: 1) M/s J.K. Chemicals, a partnership firm,
through its Partner Hyder Alia Jafar Ali,
Near Vithal Garage, Mankapur, Nagpur,
presently residing at 7, Mount Road Extn.,
Sadar, Nagpur
2) Hyder Ali s/o Jafar Alia Gulam Hussain,
aged about 42 years, occ: business, resident
of 7, Mount Road Extension, Sadar, Nagpur
3) Hussain Ali Jafar Ali Gulam Hussain, aged
about 40 years, occ: business, resident of
7, Mount Road Extension, Nagpur
4) Shankar Nichhaldad Khemchandani, aged
Major, occ: business, resident of 9, Sindhu
Sagar, Clark Town, Kadbi Chowk, Nagpur
5) Omprakash Amarchand Bhandari, aged
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Major, occ: service, resident of Rusi Jamaji
House, Kadbi Chowk, Nagpur
Mr C.S. Samudra, Advocate for appellant
Respondents served.
Coram : A.P. Bhangale, J
Dated : 14th July 2010
Judgment.
1. Being aggrieved by the judgment and decree dated
26th August 1996 passed by 6th Joint Civil Judge, Senior
Division, Nagpur dismissing the suit of appellant-Bank as
against respondents no. 4 and 5, appellant-Bank has filed the
present appeal. Appeal is filed also against the refusal of
the trial Court to award agreed rate of interest on the
outstanding amount. Parties shall hereinafter be referred
to as per their original status in the suit.
2. Plaintiff-Bank filed suit against the defendants
for recovery of Rs. 7,85,655.50. It was averred that various
loans as described in paragraphs 3 and 4 of the plaint were
granted and disbursed to defendants no. 1 to 3 and defendants
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no. 4 and 5 stood guarantee for borrowers (defendants 1 to
3). Since the defendants failed to pay the loan amount, a
call notice was issued to them to pay off the outstandings.
Since inspite of notice defendants did not settle the dues,
plaintiff-Bank filed the suit.
3. Defendants no. 1 to 3 by their Written Statement,
denied the claim of plaintiff-Bank. They alleged that it was
the plaintiff-Bank which was responsible for closure of their
unit. Defendants no. 4 and 5 denied their liability. They
denied having stood guarantor for defendants no. 1 to 3.
4. Learned trial Court on appreciation of oral and
documentary evidence decreed the suit of plaintiff-Bank as
against defendants no. 1 to 3 only. It has been held that
the plaintiff Bank failed to prove that defendants no. 4 and
5 stood guarantee for borrowers and consequently, suit has
been dismissed against those defendants. Learned trial Court
has ordered that the principal amount of Rs. 3,90,000/- shall
carry future interest at the rate of 6% per annum from the
date of suit till its realisation.
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5. Heard learned counsel for the plaintiff-Bank.
Learned trial Court observed that when defendants no. 4 and 5
had denied their signatures on the loan papers, it was the
duty of the Bank to call for report of the hand-writing
expert in order to prove the signatures of defendants no. 4
and 5. Request made on behalf of the Bank to tally the
signatures of defendants no. 4 and 5 on the Vakalatnama filed
on their behalf, was declined by the trial Court on the
premise that the Court was not hand-writing expert.
6. Plaintiff-Bank examined Kashinath Patankar who
proved deeds of guarantee (exhibit 72, 90 and 98) executed by
defendants no. 4 and 5 on various dates. He deposed that
contents of deeds of guarantee were read over and explained
to defendants no. 4 and 5 by him and they admitted the
contents to be true. In his cross-examination this witness
is consistent with his evidence in examination-in-chief. He
has denied all adverse allegations and maintained that
defendants no. 4 and 5 stood guarantor for borrowers.
Defendant no. 4 examined himself on oath and denied the
averment of the plaintiff-Bank that he was one of the
guarantors to loan transactions. He denied his signatures on
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the guarantee forms. Defendant no.5 also examined himself
and he has also denied that he stood guarantor for borrowers/
defendants no. 1 to 3. Both these witnesses have maintained
their denial in the cross-examination.
7. Explanation to Section 47 of the Evidence Act reads
that a person is said to be acquainted with the handwriting
of another person when he has seen that person write or when
he has received documents purporting to be written by that
person in answer to documents written by himself or under his
authority and addressed to that person or when in ordinary
course of business, documents purporting to be written by
that person have been habitually submitted to him. In D.
Pandi v. Dhanalakshmi Bank Limited reported in AIR 2001
Madras 243, it has been held that where the evidence of the
Bank Manager as to the presence of defendant-guarantor at the
time of sanctioning of loan is probable and reliable and
where defendant has not examined anyone to corroborate his
claim except ipse dixit of his oral evidence, the order
holding defendant liable for suit claim was proper. In the
present case, the Bank has examined the officer concerned who
has deposed that the defendants/guarantors after
understanding the documents of guarantee had signed the same
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in his presence. The evidence on behalf of the Bank is
probable and reliable.
8. Learned counsel for the plaintiff-Bank has relied
on Girija Prasad v. Sardar Labh Singh reported in AIR 1977
Patna 241 wherein it is observed with reference to Section 47
of the Evidence Act that the creditor who himself had seen
the debtor writing the disputed signatures on the credit
memos was held a person who was acquainted with the hand-
writing and it may be proved without subjecting it to expert
opinion. The trial Court has heavily come on the Bank’s
failure to examine hand-writing expert. It is true that in
order to find out the genuineness of the signature, it is but
proper for the Court to get the opinion of the expert.
However, I am of the view that Section 73 of the Evidence Act
enables the Court to compare the disputed signature with the
other admitted or proved signatures. No doubt, the Court can
also direct the concerned person in Court to write any words
or figures for the purpose of enabling the Court to compare
the words or figures so written with any words or figures
alleged to have been written by such person. In the present
case the trial Court should not have hesitated to compare the
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signatures of defendants-guarantors on Vakalatnama, Written
Statement etc. with the documents of guarantee.
9. Be that as it may, plaintiff is a nationalised
Bank. There are no malafides alleged by defendant no. 4 or
defendant no. 5 against any of the Bank officers. A definite
procedure has to be followed by a nationalised bank while
granting and disbursing loan amount to its borrower and in a
given case why its officers should allow creation of false
signatures of defendants no. 4 and 5 as guarantors, is not at
all explained muchless satisfactorily. Loan cases, before
they are sanctioned, see many hands and they are not dealt
with in a proprietory manner. It is not a case of
defendants no. 4 and 5 that undue favouritism was done to
borrowers and their signatures were put on the documents
concerned in a concocted manner. Viewed from any angle,
therefore, trial Court’s finding exonerating defendants no. 4
and 5 as guarantors cannot be sustained and will have to be
set aside. Consequently, it will have to be held that
defendants no. 4 and 5 as guarantors are jointly and
severally to pay decretal amount along with defendants no.1
and 2 to the plaintiff-Bank.
10. Learned trial Court has awarded future interest at
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the rate of 6% per annum and that too on the principal
amount. There is no reason assigned by it as to why it has
deviated from the agreed terms and conditions arrived at by
and between the parties under the loan agreement. In the
opinion of this Court, the trial Court has erroneously
adjudged the “principal sum”. In Central Bank of India v.
Ravindra and ors reported in AIR 2001 SC 3095, the Apex Court
has held that while decreeing a suit if the decree be for
payment of money, the Court would adjudge the principal sum
on the date of the suit. In other words, the principal sum
adjudged would be the sum actually loaned plus the amount of
interest on periodical rests which according to the contract
between the parties or the established banking practice has
stood capitalised. Now, turning to the question as to what
extent the interest should be awarded on the principal sum
adjudged on the date of suit, the Apex Court in Central
Bank’s case (supra) has held that Section 34 of the Code of
Civil Procedure is general in its application to all money
suits and award of interest pendente lite and post-decree is
discretionary with the Court as it is essentially governed by
Section 34 dehors the contract between the parties. In a
given case if the Court finds that in the principal sum
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adjudged on the date of the suit the component of interest is
disproportionate with the component of the principal sum
actually advanced, the Court may exercise its discretion in
awarding interest pendent lite and post-decree interest at a
lower rate or may even decline awarding such interest.
However, the discretion shall be exercised fairly,
judiciously and for reasons and not in an arbitrary or
fanciful manner. Loans were advanced long back in the year
1987 and looking to the plea of the borrowers that their
Project failed coupled with the principal sum actually
advanced, in my opinion, award of interest at 12% per annum
from the date of filing of suit till realization would
subserve the ends of justice.
11. In the result, impugned judgment and order dated
26.8.1996 passed by the 6th Joint Civil Judge, Senior
Division, Nagpur in Special Civil Suit No. 266 of 1990 is
modified thus :
All the respondents/defendants shall jointly and
severally pay a sum of Rs. 7,85,655.50 to the appellant/
plaintiff Bank together with interest thereon at the rate of
12% per annum from the date of suit till its realisation.
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Operative part of the judgment of the trial Court in clauses
(iii) to (viii) is maintained with modification that the same
would be effective against respondents/defendants no. 4 and 5
also.
Appeal is allowed partly in the above terms with
proportionate costs.
A. P. BHANGALE, J
joshi
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