Full Judgment Text
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PETITIONER:
RAMESH KUMAR SETH &SMT. ASHA SETH
Vs.
RESPONDENT:
BANK OF INDIA & ORS.
DATE OF JUDGMENT: 09/10/1996
BENCH:
K.S. PARIPOORNAN, SUJATA V. MANCHAR
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
Mrs. Sujata V. Manohar. J.
The first respondent, Bank of India, filed a suit
against Gloria Chemical Industries Ltd., the petitioner in
S.L.P. (C) No. 3277 of 1992 and against Ramesh Kumar Seth
and Asha Seth the petitioners in S.L.P. (C) No. 3276 of 1992
for a decree for Rs.3,62,37,165.10 and for other reliefs.
The suit was filed against Gloria Chemical Industries Ltd.
as principal debtor and Ramesh Kumar Seth and Asha Seth as
guarantors. The claim of the bank was in respect of credit
facilities given to Gloria Chemical Industries Ltd. under a
Cash Credit Account, Term Loan Account Nos.I, II and III,
Temporary Overdraft Account and Guarantee Account. Ramesh
Kumar Seth and Asha Seth were guarantors in respect of
theamounts advanced by the bank to the said company.
On 30.8.1990 the plaintiff-bank took out a judge’s
summonsunder the provisions of Chapter XIII-A of the Rules
of the Calcutta High Court for final judgment against the
company and the guarantors. Chapter XIII-A of the Rules of
the Calcutta High Court provides a summary procedure in
suits to recover debt or a liquidated demand in money or for
immovable property. Rule 1 of the said Chapter is asfollows:
"1. Nature of cases in which
applicable:- The provisions of
this Chapter shall not be
applicable save to suits:
(A) in which the plaintiff seeks to
recover a debt or liquidated demand
in money payable by the defendant
with or without interest arising -
(i) on a contract express or
implied; or
(ii) on an enactment where the sum
sought to be recovered is a fixed
sum of money or in the nature of a
debt other than a penalty; or
(iii) on a guarantee where the
claim against the principal is in
respect of a debt or a liquidated
demand only; or
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(iv) on a trust; or
(B) for the recovery of immoveable
property with or without a claim
tor rent or mesne profits by a
landlord against a tenant whose
term has expired or has been duly
determined by notice to quit or has
bas become liable to forfeiture for
non-payment of rent or against
persons claiming under such
tenant."
The plaintiff-bank had claimed the following reliefs in
the suit:
(a) Decree for Rs.3,62,37,165.10 against defendants 1, 2
and 3 jointly and severally;
(b) Interim interest and interest on judgment as mentioned
in paragraph 18 of the plaint;
(c) Declaration that the suit properties mentioned in
paragraph 12 Of the plaint remain hypothecated and charged
as security for payment of the plaintiff’s claims herein;
(d) Declaration that the plaintiff stands subrogated to the
Ownership right to the stock of Hydrogenated Rice Bran Oil
referred to in paragraph 17 of the plaint and has become
owner thereof;
(e) Declee for sale and realisation of the suit properties
mentioned in paragraph 12 of the plaint and the Stock of
Hydrogenated Rice Bran Oil referred to in Paragraph 17 of
the plaint by public auction or private contract or
otherwise with liberty to the plaintiff to appropriate the
net proceeds thereof in protanto satisfaction of the
plaintiff’s claims herein;
(f) Receiver;
(g) Injunction;
(h} Attachment;
(i) Costs;
(j) Further and other reliefs.
The defendants who are the petitioners here contended
that the provisions of Chapter XIII-A were not applicable
to the suit in question since the reliefs claimed included
other claims which were not in the nature of a liquidated
demand in money payable with or without interest. A special
Bench of the Calcutta High Court which was constituted to
consider this question held that the provision of Chapter
XIII-A were attracted to this suit. It Proceeded to hear
the claim on merit. The court examined the claim of the
plaintiff bank against the company (1st defendant in the
suit) under the said accounts as also its claim for
interests, and held that no bona fide dispute was raised by
defendant No.1 to the said claim. It also noted that the
interest was charged at a rate which was agreed to by the
said company which had passed from time to time Board
Resolutions accepting the rate of interest. The Calcutta
high Court decreed the claim of the plaintiff bank in terms
of prayers (a) and (b) of the Judges’ summons.
In relation to the claim of the plaintiff-bank against
the two guarantors the court came to the conclusion that the
guarantees given by them were in respect of the amounts due
under the Cash Credit Account, Term Loan Account No.I, Term
Loan Account No. III and the Guarantee Account with interest
thereon at the agreed rates. The guarantees did not cover
the claim of the plaintiff-bank relating to Term Loan
Account No.lI and Temporary Overdraft Account. Accordingly,
it decreed the claim of the plaintiff-bank against the
guarantors who were defendants 2 and 3 in the suit for a sum
of Rs.3,46,91,831 and gave to them unconditional leave to
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defend the balance of the claim.
The potitioners before us in the two special leave
Petitions who are the original defendants, have contended
before us that the provisions of Chapter XIII-A of the
Calcutta High Court, Rules were wrongly applied to the
claims in the present suit. After arguments were advanced
before us at some length, the first respondent i.e. the
original plaintiff-bank submitted before us that in fact the
hypothecated goods and/or mortgaged properties had already
been sold by another creditor namely, the west Bengal State
Financial Corporation to one M/s. Kalyani Soap Industries
Ltd. for a consideration of Rs.170 lakhs. Out of the down
payment of Rs.46 lakhs made by the said purchaser, the
plaintiff-bank had received its pro rata share of Rs.20.19
lakhs. The plaintiff-bank was also entitled to receive a
further sum of Rs.34 lakhs from out of the balance sale
consideration of Rs.124 lakhs. It further submitted that the
bank had given credit to the petitioners for the sum of
Rs.20.19 lakhs already received by it against the claim in
the present suit. According to the plaintiff-bank this
amount has been received by the plaintiff-bank between April
1992 and May 1995 after the decree of the Calcutta High
Court. The plaintiff-bank who is the first respondent before
us filed an application for deletion of prayers (c) (d) (e)
(f) (g) and (h) of the plaint they having become infructuous
and unnecessary. This application was granted by us. In view
of this amendment to the plaint the claim of the plaintiff
bank is confined only to the money claimed The question
therefore whether the Provisions of Chapter XIII-A of the
Rules of the Calcutta High Court are attracted to the
present suit thus becomes academic.
On the merits of the claim the Calcutta High Court has
examined the documents the defence of the defendants and has
by a reasoned order granted the reliefs set out ealier. We
do not see any reason to interfere with the same. We make it
however clear that the bank, first-respondent herein, will
give credit to the petitioners for the amount receivable by
it as its pro rata share on the sale of the
mortgagod/hypothecated properties from the date when the
sale took place. The petitioners will not be liable for any
claim for interest on the said amount from the date of the
sale till the date Of actual realisation of the price so
that the petitioners are not charged interest in respect of
the time which the bank and other creditors have granted to
the purchaser for payment of the sale price.
The special leave petitions are disposed of
accordingly. In the circumstances there will be no order as
to costs.