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Rajendra Manohar Kowli & Another v/s Bank of India


Company & Directors' Information:- RAJENDRA LIMITED [Strike Off] CIN = U99999KA1943PLC000306

Company & Directors' Information:- RAJENDRA CORPORATION PRIVATE LIMITED [Strike Off] CIN = U17219TZ1948PTC000161

    Appeal No. 153 of 2005

    Decided On, 26 December 2019

    At, Debts Recovery Appellate Tribunal At Mumbai

    By, THE HONOURABLE MR. JUSTICE S. RAVI KUMAR
    By, CHAIRPERSON

    For the Appellants: Sudhir Somalwar, Advocate. For the Respondent: Pallavi Chari i/b O.A. Das, Advocates.



Judgment Text


This Appeal is preferred against judgment dated 17.1.2005 in Original Application (O.A.) No. 1173/2000 on the file of Debts Recovery Tribunal No. II, Mumbai (the Tribunal below). Brief facts leading to this Appeal as follows.

2. Bank of India filed High Court Suit No. 3272/1997 before the Hon’ble High Court of Bombay and the said suit was subsequently transferred to the Tribunal below on establishment of Debts Recovery Tribunals as per the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the RDDB & FI Act).

3. Bank filed Suit contending that on the request of defendant Nos. 1 and 2 i.e. Manohar Bhaskar Kowli (now deceased) and Rajendra Manohar Kowli through their letter dated 12.7.1994, Bank paid a sum of Rs. 27 lakh to the beneficiary of the Bank guarantee and later after making adjustment of the monies belonging to defendants lying with the Bank a sum of Rs. 7 lakh was found to be payable by the defendants, therefore, on 19.7.1994 documents like Demand Promissory Note, Letter of Lien and Set off, Letter of Continuity of Security were obtained from the defendants. As defendants failed to discharge outstanding, the Bank issued a notice and thereafter filed the Suit. After filing of the suit, it came to light that defendant No. 1 expired, therefore, his Legal Representatives are brought on record as defendant No. 1(a) and defendant No. 1(b) who are the daughters of deceased defendant No. 1 and as the defendant No. 2 who is no other the son of deceased defendant No. 1 was already on record.

4. Defendant No. 2 filed Written Statement (W.S.) which is adopted by defendant No. 1(a) and defendant No. 1(b) disputing the claim of the Bank. Defendants mainly contended that the Bank guarantee was originally given by United Western Bank on a commission of 0.5% on the guarantee amount and as the officer of applicant-Bank approached the defendants with an offer that they have proposed to charge less than 0.5% commission and that after shifting all the fixed deposits from United Western Bank to the applicant-Bank, the Bank guarantee for Rs. 27 lakh is obtained from the applicant-Bank. It is further contended that the applicant-Bank, contrary to the promise, charged commission @ 1% and the same was disputed through correspondence and also by reply and as such the claim of the Bank is not tenable. They further contended that deceased defendant No. 1 gave number of fixed deposits to applicant-Bank in joint names and the interest accrued on these F.D.Rs. would be around Rs. 10 lakh, thereby Rs. 7 lakh claimed as due is not tenable. It is also contended that the Bank has not properly maintained the Accounts of the defendants and they have misappropriated money of the defendants.

5. On consideration of contentions and rival contentions of both parties and material evidence placed before the Tribunal below, the learned P.O, negatived all the contentions of the defendants and allowed the O.A. by granting contractual rate of interest, till date of the O.A. and thereafter @ 12% p.a. with quarterly rests till realization. Aggrieved by the said order, present Appeal is preferred.

6. Heard both sides.

7. Advocate for appellants submitted that the appellants trusted the Bank Officer, but contrary to the promise they charged 1% commissions. It is further submitted that they were not given counter interest on the Fixed Deposit Receipts which would be roughly around Rs. 14 lakh as on 19.7.1994. It is further submitted that there is no liability on the appellants and the claim of the Bank is false and the Tribunal below failed to consider this aspect. It is further submitted at the time of obtaining Bank guarantee, a sum of Rs. 20 lakh was kept as security with the Bank which carried interest @ 9% p.a. as per the contract, but the Bank has not furnished anything as to the interest accrued on these F.D.Rs. It is further submitted that the claim cannot be termed as debt and the defendants have no liability to discharge. It is further submitted that learned P.O. failed to consider the fact that no details of accounts relating to the Bank guarantee has been submitted to substantiate the claim and on that ground itself, the O.A. is liable to be dismissed.

8. On the other hand, Advocate for respondent-Bank submitted that appellants have not placed correct facts. It is submitted that only after finalizing the due amount, necessary documents are obtained on 19.7.1994 for Rs. 7 lakh after making all adjustments, therefore, the objection of the defendants that no details are furnished is not tenable and it is only a plea raided to avoid liability. It is further submitted that the contention of the defendants that excess commission is recovered is absolutely incorrect and the said plea is not tenable. It is further submitted that the Bank through letter dated 24.11.1993 informed the rate of commission @ 1% and if really the contentions raised by appellants are true, then they ought to have objected for the same. It is further submitted that the Tribunal below considered all these aspects and rightly allowed he claim and that there are no grounds to interfere with the judgment of the Tribunal below.

9. 1 have perused the material papers and impugned order dated 17.1.2005. From the pleadings and material, it appears in March, 1989 itself, on the request of appellant No. 2 herein Bank guarantee dated 21.4.1989 was issued in favour of M/s. Markand Gandhi & Co., Advocates & Solicitors, for a sum of Rs. 27 lakh and in consideration thereof, appellant No. 2 executed Letter of Counter Guarantee and Indemnity dated 20.4.1989 on the guarantee of Manohar Bhaskar Kowli i.e. defendant No. 1, now deceased. It appears that the said guarantee was renewed from time to time in favour of beneficiaries and the last renewal was on 20.4.1994. It is also clear from the record that beneficiaries invoked the Bank guarantee and the Bank paid the amount to the beneficiaries on 19.7.1994 on which date documents like Demand Promissory Note, Letter of Continuity, Letter of Lien and Set off were obtained for the balance amount after adjusting the money belonging to defendants that was lying with the Bank. If really there was wrong calculation on 19.7.1994 including charging of excess commission, the defendants ought to have raised objection then and there itself and ought to have refused to execute the above referred documents. The Suit claim of Rs. 12,27,566/- is made on the basis of these documents at the contractual rate of interest, therefore, the contentions of the defendants that the claim is untenable and the Bank has not provided any details as to the interest accrued on the F.D.Rs. etc. are only developed through pleadings during trial and it was not raised at the earliest point of time when a reply was given for the notice of the Bank. The defendants in reply to the notice dated 10.7.1997 through their Advocate issued a reply dated 29.7.1997 denying the liability and in the entire notice the objection raised is that Accounts are not reconciled and the defendants repeatedly requested the Bank for reconciliation of the Accounts and that the Bank wrongly charged commission. Nothing is whispered in the reply about the interest payable on the F.D.Rs. and money due to the defendants from the Bank. Learned P.O. upon considering the material on record held that the defence of the defendants is devoid of merits and that there is no material to disbelieve the evidence of the Officer of the applicant-Bank which refer to all the documents and facts. Though much is argued on behalf of the appellants on the plea of counter claim, but no such claim is made in the W.S. and no Court Fee is paid on any counter claim.

10. According to appellants they are entitled for a sum of Rs. 19,3

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6,069/-. At the time of conclusion of arguments in the O.A., appellants (defendants) came forward with an application to condone the delay in making counter claim and that request was rejected by the Tribunal below by order dated 11.1.2005, for which a separate Appeal (Misc. Appeal No. 166/2005) is filed. 11. On a scrutiny of the material on record, I am of the considered view that the Tribunal below has not committed any error and rightly fastened liability on defendants restricting the same to extent of estate devolved on them from the deceased defendant No. 1. 12. For these reasons, I am of the view that Appeal is devoid of merit and is liable to be dismissed. 13. In view of the same, Appeal is dismissed with costs. 14. All Miscellaneous Applications, if any, are dismissed as infructuous. Appeal dismissed.
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