9911796707
TMI Blog2015 (3) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... iff against the defendant or whether the same was payment on account of interest for the period up to March 31, 2001 as contended by the plaintiff. Both the witness in evidence stated that the plaintiff used to lend and advance sums the defendant against pledge of shares and payment of interest. The rate of interest is however disputed. The plaintiff claims varying rates while the defendant contends that the rate of interest was agreed to be 18% per annum - the issue has to be answered by holding that there was an agreement between the parties. Existence of money lend and advance exists or not - HELD THAT:- The defendant in its written statement as well as in evidence through its witness admits that the receipt of the sum of ₹ 1,10,00,000/- from the plaintiff as loan. The defendant however claims to have repaid the same - has to be answered by holding that the plaintiff did lend and advance of ₹ 1,10,00,000/- to the defendant pursuant to such agreement - Thus, it can be safely concluded that there exists agreement between the parties. Service of notice - Did the defendant receive the notice dated 14th January, 2002? - HELD THAT:- Exhibit J was sought to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vely - issue answered in the negative and in favour of the plaintiff. Is the plaintiff entitled to decree as claimed in the plaint? - HELD THAT:- The loan for the sum of ₹ 1,10,00,000/- is admitted. The value of the sale of pledged shares is ₹ 8,55,400/-. The defendant is, therefore, entitled to the adjustment of the value of the pledged shares with the principal amount outstanding. Therefore, the principal amount outstanding is ₹ 1,01,44,600/-. The defendant has paid interest upto March 31, 2001. The nature of transactions between the parties is commercial. The nationalized banks charge interest at rates not less than 12 per cent per annum in respect of commercial transactions. In such circumstances, the plaintiff is entitled to interest at the rate of 12 per cent per annum on and from April 1, 2001 until realization on the sum of ₹ 1,01,44,600/-. The plaintiff is, therefore, entitled to a decree for ₹ 1,01,44,600/- together with interest at the rate of 12 per cent per annum on such sum on and from April 1, 2001 until realization. Other reliefs? - HELD THAT:- The plaintiff has paid a Court-fees of ₹ 10,000/-. The plaintiff will therefore b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April 20, 2001 as full and final settlement of the accounts between the parties. The defendant refers to the transactions had by the defendant with the sister concern of the plaintiff and claims that the accounts was squared up by the payment of the sum of ₹ 1,68,000/- by the defendant to the plaintiff. The defendant denies receipt of the letter dated January 14, 2002. The defendant claims that the plaintiff had sold the shares on February 20, 2001 when the defendant was asked the plaintiff to do so, the plaintiff would have received a far greater value in such shares. The defendant also contends that the plaintiff was obliged to mitigate its damages under Section 73 of the Indian Contract Act, 1862. The issues were settled by the Order dated December 3, 2013. The issues are as follows:- 1. (a) Was there any agreement between the plaintiff and the defendant as alleged in paragraph 1 of the plaint? (b) Did the plaintiff lend and advance any amount pursuant to such agreement? 2. Was there any agreement between the parties as alleged in paragraph 2 of the written statement? 3. Did the defendant receive the notice dated 14th January, 2002? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiff and as to whether or not the payment of ₹ 1,68,000/- made on April 20, 2001 by the defendant to the plaintiff was on account of full and final settlement of the claim of the plaintiff against the defendant or whether the same was payment on account of interest for the period up to March 31, 2001 as contended by the plaintiff. Both the witness in evidence stated that the plaintiff used to lend and advance sums the defendant against pledge of shares and payment of interest. The rate of interest is however disputed. The plaintiff claims varying rates while the defendant contends that the rate of interest was agreed to be 18% per annum. In such circumstances, issue no. 1(a) has to be answered by holding that there was an agreement between the parties as pleaded in paragraphs 1, 2 and 3 of the plaint. The defendant in its written statement as well as in evidence through its witness admits that the receipt of the sum of ₹ 1,10,00,000/- from the plaintiff as loan. The defendant however claims to have repaid the same. In such circumstances, issue no. 1(b) has to be answered by holding that the plaintiff did lend and advance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 172 to 177 of the Contract Act, 1872 and submits that, the plaintiff as the pledgee was entitled to sell the shares at a time of its choice. He contends that, a pledgee is not bound by the rigours of Section 73 of the Contract Act, 1872. In support of such contentions he relies upon All India Reporter 1950 Travancore Cochin page 66 (Sankaranarayana Iyer Saraswathy Amal v. The Kottayam Bank Ltd.), All India Reporter 1991 Delhi page 278 (Bank of Maharashtra v. Racmann Auto (P) Ltd.) and All India Reporter 2000 Bombay page 151 (State Bank of India v. Smt. Neela Ashok Naik Anr.). The plaintiff was obliged to sell the shares on receipt of the letter dated February 7, 2001 and at least when the share prices were falling. The plaintiff had failed to act in terms of Section 73 of the Contract Act, 1872 and having failed to mitigate its damages, the plaintiff is not entitled to any decree as prayed for. In support of such contention the learned Senior Advocate for the defendant relies upon 1911-1913 All England Reports Reprint page 63 (British Westinghouse Electric and Manufacturing Co. Ltd. v. Underground Electric Railways Co. of London, Ltd.), 1918 All England Reports page 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge, the contention that Section 176 of the Contract Act, 1872 vests absolute discretion in the bank to retain the security and sue for the amount due or to adjust the security at the point of time at its discretion and sue the debtor for the balance amount came up for consideration. It noted the doubt expressed as to whether a pawnor could force the pawnee to dispose of the pledged goods without the pawnor clearing the debt in Racmann Auto (P) Ltd. (supra). The ratio laid down in Racmann Auto (P) Ltd. (supra) was followed. British Westinghouse Electric and Manufacturing Co. Ltd. (supra) considers the measure of damages on account of a breach of a contract. In such suit it has been held that the principles to quantify damages are well-settled. As far as possible the person who has proved a breach of a contract should be placed as far as possible in as good a situation as if the contract had been performed. This principle however is quantified by a second principle which imposes a duty on the plaintiff in such a suit for damages to establish that such plaintiff had taken all reasonable steps to mitigate the loss consequent on the breach. This second principle debars a plai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract. Explanation.- In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the nonperformance of the contract must be taken into account. 176. Pawnee s right where pawnor makes default.- If the pawnor makes default in payment of the debt, or performance, at the stipulated time, of the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawnor upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale. If the proceeds of such are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor. Section 176 of the Contract Act, 1872 allows the pawnee two options in the event ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailing in the market at the material point of time. The defendant has also not been able to establish that it had called upon the plaintiff to sell the shares. In the present case, the shares pledged were sold in the stock market within the parameters of the quoted prices for the shares prevailing on the date of the sale. The defendant has not questioned the sale of the shares per se. The defendant questions the date of the sale of the shares. Such question has no substance in the facts of this suit as the sale was undertaken after notice to the defendant. In view of the discussions above the fourth issue is answered in the affirmative and in favour of the plaintiff. The fifth and the sixth issues are taken up together for the sake of convenience. The plaintiff seeks a money decree against the defendant after adjusting the proceeds of the sale. The principal amount lent and advanced is ₹ 1,10,00,000/-. The amount realised by sale of the pledged shares is ₹ 8,55,400/-. The principal amount due by the defendant to the plaintiff is therefore ₹ 1,01,44,600/-. The defendant presses letters dated February 7, 2001 and April 20, 2001 being Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the sale of pledged shares is ₹ 8,55,400/-. The defendant is, therefore, entitled to the adjustment of the value of the pledged shares with the principal amount outstanding. Therefore, the principal amount outstanding is ₹ 1,01,44,600/-. The defendant has paid interest upto March 31, 2001. The nature of transactions between the parties is commercial. The nationalized banks charge interest at rates not less than 12 per cent per annum in respect of commercial transactions. In such circumstances, the plaintiff is entitled to interest at the rate of 12 per cent per annum on and from April 1, 2001 until realization on the sum of ₹ 1,01,44,600/-. The plaintiff is, therefore, entitled to a decree for ₹ 1,01,44,600/- together with interest at the rate of 12 per cent per annum on such sum on and from April 1, 2001 until realization. The fifth issue is answered accordingly. So far as the seventh issue is concerned, I find that the plaintiff has paid a Court-fees of ₹ 10,000/-. The plaintiff will therefore be entitled to a decree of ₹ 20,000/- as assessed costs from the defendant. C.S. No. 113 of 2002 is decreed accordingly. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
