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Swami Automobiles Pvt. Ltd V/S Punjab National Bank and Others.

    Appeal No. 368 of 2015

    Decided On, 13 January 2016

    At, Debt Recovery Appellate Tribunal At Delhi


    For Petitioner: Shailendra Ojha, Advocate And For Respondents: S.K. Tanwar, Advocate

Judgment Text

1. The Tribunal below has allowed the O.A. filed by respondent Punjab National Bank for recovery of a sum of Rs. 12,10,711/- against the appellant and respondent Nos. 2 and 3. The claim has been allowed with interest @ 12% p.a. with monthly rests w.e.f. 1.4.2011 till its realization and costs. The facts noticed, in brief, are that respondent No. 2 had approached respondent No. 1 Bank for grant of a Car Loan. Accepting her request, the Bank sanctioned Rs. 15 lac as term loan on 30.7.2008, The amount was sanctioned for purchase of 'Honda Accord'. Respondent No. 2 changed her request to purchase 'Mercedes Benz'. The Bank revised the earlier sanction vide its sanction letter dated 27.9.2008. This sanction was again changed on 16.10.2008 on the request of respondent No. 2 who wished to purchase 'Endeavour' for a sum of Rs. 18,79,678. There was yet another prayer for change on the ground that respondent No. 2 wanted to purchase vehicle from appellant M/s. Swami Automobiles Pvt. Ltd. Ultimately, the respondent Bank issued a demand draft on 29.8.2009 payable at PNB, RCC, Chandigarh on the ground that respondent No. 2 would get this car cheaper from the appellant.

2. Respondent No. 1 had executed hypothecation agreement and respondent No. 3 stood as guarantor. The payment was made directly to the appellant. The Bank thereafter, sent various requests to the appellant and respondent Nos. 2 and 3 to provide registration certificate of the car in the name of the Bank duly hypothecating the vehicle. Three letters, dated 17.9.2009, 17.10.2009 and 19.11.2009, were written requesting the appellant and respondent Nos. 2 and 3 to expedite the submission of requisite papers. The Bank, however, did not receive any response. Rather, respondent No. 2 even stopped meeting the Bank official. The Bank then came to learn that respondent No. 2 did not utilize the amount sanctioned for purchase of the car, as respondent No. 2 in connivance with the appellant had paid the draft amount to respondent No. 2. Respondent No. 2 had sent an invoice of having purchased 'Tata Safari' for Rs. 6.95 lacs as against the loan amount of Rs. 13.10 lac. Even the cheques issued towards installment of the loan were dishonoured for the reasons of 'insufficient funds' or 'exceeds arrangement'. The Bank accordingly recalled the loan on 8.3.2010 and issued a legal/demand notice on 6.4.2011, calling upon respondent No. 2 to pay the loan amount of Rs. 11,57,567/- with interest and charges. In this manner, the O.A. was filed claiming the amount as noticed above after taking into consideration the interest due.

3. In response to the notice, respondent Nos. 2 and 3 appeared through a Counsel, but stopped appearing after availing various opportunities to file reply. The appellant, however, filed written statement raising objection to territorial jurisdiction of the Tribunal to entertain the O.A. besides pleading that there was no cause of action on the part of the Bank to proceed against the appellant. The appellant also pleaded that the O.A. was bad for mis-joinder of the parties.

4. The Tribunal below has allowed the O.A., holding the appellant and respondent Nos. 2 and 3 liable. Aggrieved against the same, the appellant has filed the present appeal.

5. The Counsel for the appellant would contend that the O.A. was not maintainable against the appellant as the appellant had not taken any loan from the Bank. As per the appellant, the demand draft was handed over to it by the son of respondent No. 2, who later expressed his inability to purchase the vehicle and thus money was refunded to him. The appellant would plead that it was not aware that the demand draft deposited with it had been issued by the respondent Bank. This fact was not revealed by respondent Nos. 2 and 3 to the appellant. The Counsel would also submit that even otherwise the appellant is not under any kind of liability to reimburse the money to the Bank. The Counsel for the appellant has however, not pressed the plea regarding territorial jurisdiction of the Tribunal to entertain the O.A.

6. The stand of the appellant is that the son of respondent No. 2 and respondent No. 3 had approached the appellant for purchasing vehicle make 'Mahindra and Mahindra' and had handed over a demand draft of Rs. 16,38,593/- on 4.9.2009. They, however, did not get the delivery of the vehicle. On 14.10.2009, the son of respondent No. 2 again came to the appellant and showed his inability to take delivery as he was not interested in the purchase of car and accordingly prayed for refund of the amount. The appellant states to have refunded the amount. According to the appellant, there was nothing illegal in returning the amount to the son of the respondent No. 2.

7. This plea raised by the appellant can be accepted only with pinch of salt. The Tribunal below did not find any force in this plea on the ground that the Bank had addressed a letter to the appellant on 29.8.2009 clearly stating that the amount had been advanced by the Bank to respondent No. 2 for purchase of 'Scorpio Fist (CEO)' and that the said vehicle was financed by the Bank. The Counsel for the appellant has raised a serious dispute about the receipt of this letter. The Tribunal below has observed that this letter was directly sent to the appellant through courier service. The receipt of this courier had also been placed on record. To rebut the Counsel for the appellant has come up with the plea that there was no such courier service and thus the receipt of this letter had not been proved. This is a bald assertion being made by the appellant. In order to succeed, the appellant was required to show that no such letter was received by the appellant and there was no such courier service in existence. Simple statement or assertion on the part of the appellant cannot make the appellant sail through with its plea that this letter was not received by it.

8. Otherwise also, the stand of the appellant that it had returned the amount to respondent No. 2 is not fair or justified. If the appellant had handed over the draft back to the appellant, then one could have understood it to be a bona fide action. In the present case, the appellant had got the demand draft en-cashed to their account and thereafter refunded the money to respondent No. 2. This may be indicative of connivance on the part of the appellant. The Bank had issued legal notice to all the defendants which included the appellant. If the appellant had really been sincere in its plea, it ought to have responded to the legal notice, pointing out the facts in terms of its stand reflected in the reply filed to the OA. This was not done. The Tribunal has rightly observed that this would reveal collusion on the part of the appellant with respondent Nos. 2 and 3.

9. This stand of the appellant, otherwise, also does not appear to be normal cond

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uct in the course of business transactions. No party can be expected to deposit a draft with a company and then refuse to take delivery of the vehicle. If the intention of the respondent No. 2 was not to purchase this vehicle, she could not be expected to deposit this draft with the appellant. Respondent No. 2 obtained a loan of Rs. 13.10 lacs and then had purchased a different vehicle valued at Rs. 6.95 lacs. The cheques issued towards installment were also dishonoured. Respondent No. 2 succeeded in its design only because of the appellant. The appellant clearly is seen to have neglected its responsibility. The Tribunal below has rightly held the appellant liable. There is no merit in any of the pleas raised by the appellant. The appeal is accordingly dismissed.