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TMI Blog1998 (7) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... ity for payment of all amounts due and payable by the company to the plaintiff under any facility or account whatsoever. The second defendant in his personal and individual capacity, by letter of guarantee dated 21-9-1984, guaranteed payment of all amounts due and payable by the company to the plaintiff in respect of all the present or future advances and liabilities upto a limit of the principal sum of Rs. 12 lakhs and also interest thereon as mentioned in the guarantee. 2. In or about April 1987, pursuant to the request made by the company to the plaintiff and the second defendant, the plaintiff agreed to grant the overdraft facility upto a limit of Rs. 16 lakhs and for the said purpose the company executed promissory note dated 23-4-1987 promising to pay to the plaintiff on demand the said sum of Rs. 16 lakhs with interest thereon at the rate of 7.5 per cent per annum over the RBI rate and with a minimum of 17.5 per cent per annum and also executed a deed of hypothecation of book debts dated 23-4-1987, thereby hypothecating by way of first charge in favour of the plaintiff of the present and future book debts, outstandings, monies, receivable, claims, bills, encashments, etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeds realised thereof be paid to the plaintiff. The prayers in the plaint are that the defendants jointly and severally be ordered and decreed to pay to the plaintiff the said sum of Rs. 22,41,426.02 with further interest of Rs. 11,66,178.74 at the rate of 18.5 per cent per annum from the date of filing of the suit till realisation and that the goods and book debts specified in the deeds of hypothecation (exs. B and D2) be sold and net sale proceeds be paid to the plaintiff towards satisfaction of their claim. The defendant No. 2 was duly served for settlement of issues, but he did not appear. Defendant No. 1 filed his reply. 5.1 The said issues are : ( 1 )Does the plaintiff prove that it granted overdraft facility of Rs. 16 lakh to Sea Transportation Enterprises (P.) Ltd. ('the company') ? ( 2 )Does plaintiff prove that the company executed a hypothecation deed dated 21-9-1984 in favour of plaintiff ? ( 3 )Does plaintiff prove that defendant No. 2 executed a guarantee dated 21-9-1984 in favour of plaintiff ? ( 4 )Does plaintiff prove that the company executed a hypothecation of book debts dated 23-4-1987 in favour of plaintiff ? ( 5 )Does plaintiff prove that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red on 14-12-1990 by which fine of Rs. 200 each on the directors was imposed. The defendant No. 2 has not taken any steps to furnish the statement of affairs. Secondly, it was pointed out that the plaintiff-bank had opted to remain outside liquidation proceedings and realise the book debts and appropriate them for the amount for which they are secured creditors against the official liquida- tor. It was also pointed out that the plaintiff-bank can realise the total loan amount from the defendant No. 2 who is guarantor in this case. But in case of book debts, they should be allowed to realise the amount to the extent for which they are secured creditors. 7. Draft issues were filed by advocate for the plaintiff on 20-11 -1992 which have been treated as issues in the suit. By order dated 14-2-1997, the plaintiff-bank was permitted to file affidavit under order 19, rule 1 of the Code of Civil Procedure, 1908 in order to prove the facts in issue. Detailed affidavit dated 30-6-1997 was accordingly filed and by the said affidavit the averments made in the plaint were confirmed. In the said affidavit it was stated that the overdraft facility upto an amount of Rs. 16 lakh was duly regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter further, but I am of the firm opinion that it is necessary that the plaintiff-bank should make necessary endorsement in the confidential dossier of K. Balakrishna that he had not acted diligently in filing the affidavit before this Court. The plaintiff-bank shall, therefore, make such entry in the confidential dossier of K. Balakrishna. 8. The learned advocate Shri S.S. Usgaonkar was heard on behalf of the plaintiff and he brought to my attention the documents on record which have been proved through the evidence of K. Balakrishna - assistant manager, who filed affidavit in the matter. The official liquidator relied upon averments made in the reply dated 13-6-1997 and 21-7-1997. 9. Be that as it may, I shall now proceed to deal with the matter. Insofar as the suit against defendant No. 2, on the strength of personal guarantee in his individual capacity is concerned, the plaintift has been able to establish through affidavit evidence of K. Balakrishna - assistant manager of plaintiff-bank that such guarantee had been given by defendant No. 2 vide letter of guarantee dated 21-9-1984 to a limit of principal sum of Rs. 12 lakh and also interest thereon. The defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to condition No. 2 above, it was disclosed in further affidavit by K. Balakrishna - assistant manager of the plaintiff-bank, that no such letter was received by the plaintiff-bank from debtors either directly or through defendants. The credit facility of Rs. 16 lakh was given on assignment of receivable amounts from various parties in respect of which further action was required to be taken by the company but the bank officials had been totally negligent in not obtaining such letters as specified in the condition and that for this negligence of the bank officials the security cannot materialise. For this negligence, due to which the plaintiff-bank in fact has suffered loss, it is necessary for the plaintiff-bank should take appropriate action against the officials responsible for the same. It is also considered necessary that the RBI, Mumbai be intimated for taking appropriate action in the matter. Thus, insofar as the recoveries sought by the plaintiff on the strength of the overdraft facility to the tune of Rs. 16 lakhs is concerned, the same having not been registered with the ROC, the said charge is void by virtue of the first proviso to section 125 against the official liquida ..... X X X X Extracts X X X X X X X X Extracts X X X X
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