Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
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Date of Decision: 15 February, 2018
+ RFA 427/2014 & CM APPL.9709-10/2017, 16368/2017
& 16570-71/2017
PNB FINANCE AND INDUSTRIES LIMITED ..... Appellant
Through: Mr. Sudhir Nandrajog, Senior
Advocate with Mr. Manish Srivastava
and Mr. Rohan Malik, Advocates.
versus
LATE SHRI SHITAL PRASAD JAIN & ORS. ..... Respondents
Through: Mr. A. K. Singla, Senior Advocate
with Mr. Vipul Pankaj Sanghi and
Ms. Ananya Kar Sanghi, Advocates.
for R-1B.
Mr. D. K. Rustagi, Mr. Mayank
Rustagi and Mr. Kapil Gulati,
Advocate for R-3 to 5.
Mr. Samrat Nigam, Advocate for R-5.
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. Both the parties have no objection if the matter is heard by this Bench.
2. Appellant/Plaintiff- PNB Finance & Industries Limited ( hereinafter,
‘Plaintiff’) instituted a suit for recovery of Rs.19,55,890/- against five
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defendants. The date of filing of suit is 10 December 1976. The Defendant
No.1 was the person who had actually availed the loan, who is since
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deceased. Defendant no.1 passed away on 23 March 2004. Defendant
No.2, Mr. Mukul Jain, is the son of Defendant No.1. Defendant Nos.3 to 5
RFA 427/2014 Page 1 of 5
are companies which are promoted by Defendant Nos.1 & 2, who have
allegedly received benefits under the loan amount from Defendant No.1.
3. Defendant No.1 was a financial advisor to the Plaintiff. He made
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requests for loans vide letters dated 7 November, 1974 for a sum of Rs.5
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lakhs and thereafter on 15 January, 1975 for a sum of Rs.10 Lakhs. The
company sanctioned the loan for Rs.5 Lakhs which was to be repaid along
with interest @ 16% per annum payable quarterly on the last date of each
quarter. A promissory note was duly executed for the same. The second
amount of Rs.10 Lakhs was also sanctioned which was to carry interest @
16% per annum, with quarterly rests.
4. Prayers in the suit are as follow:
“ The Plaintiff Company respectfully prays this
Hon’ble Court may be pleased to pass a decree
against the defendants and in favour of the
Plaintiff Company for Rs.19,55,890.37 alongwith
interest @ 16% per annum from the date of the
suit till realisation of the decree along with costs
of the suit. ”
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5. The Trial Court vide order dated 27 March, 2014 dismissed the suit
by holding that the Plaintiff had failed to lead evidence in the matter. The
said judgment has been assailed in the present appeal.
6. Counsel for Defendant No.1 at the outset has submitted that his client
is willing to discharge the entire liability claimed in the suit along with
interest. Defendant Nos.3 to 5 submit that they have been unnecessarily
dragged into these litigations.
7. On the other hand, Ld. Senior Counsel for the Appellant/Plaintiff,
submits that orders would need to be passed on the interest rate that would
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be payable on the loan amounts. It is submitted by the Plaintiff that the loan
amounts are liable to be repaid with interest as agreed at the time of availing
of loan, inasmuch as in the 1970s, interest rates were high and the same
ought not to be judged on the basis of interest rates prevalent today.
8. A perusal of the documents on record clearly shows that Defendant
No.1 had availed of the loans after agreeing to pay interest @ 16% per
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annum. The Promissory Notes issued by Defendant No.1 dated 23
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December, 1974 and 29 January, 1975 which appear at pages 1263 & 1267
of the Trial Court Record are set out herein below:
"Rs.5,00,000/-.
ON DEMAND, I promise to pay The Punjab
National Bank Ltd. or order, in the office at New
Delhi, the sum of Rupees five lacs only for value
received together with the interest thereon at the
rate of 16% per annum from this date till date of
payment in full, payable quarterly on last day of
each quarter.
Sd/-
(SHITAL PRASAD JAIN)
A-37, Kailash Colony,
New Delhi-48.
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23 December, 1974.
......................"
"Rs.10,00,000/-.
On demand I promise to pay The Punjab National
Bank Ltd. New Delhi, a sum of Rs.10 lacs (Rupees
ten lacs only) together with interest thereon @
16% per annum with quarterly rests, for value
received.
Sd/-
(Shital Prasad Jain)
RFA 427/2014 Page 3 of 5
A-37, Kailash Colony,
New Delhi-48.
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29 January, 1975 ”
9. A perusal of these promissory notes clearly shows that the condition
of the loans was that interest at 16% p.a. would be payable. However, the
interest rates specified in the said notes for both the loan amounts of Rs.5
lakhs and Rs.10 lakhs are different. There is no reason, whatsoever, for
which the same should be reduced. Since the liability is being admitted and
repayment is agreed to be made, the Defendants shall be bound by the terms
of the loan as contained in the said documents.
10. Plaintiff has calculated interest payable till the date of filing of the suit
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i.e. 9 December, 1976 and added the same to the sum claimed of
Rs.19,55,890.37/-. Interest deserves to be paid, as per the agreement
between the parties as captured in the Promissory Notes extracted above.
The interest rates are accordingly awarded as per the agreed terms in the
Promissory Notes.
11. The Trial Court judgment is accordingly set aside. A decree is passed
against Defendant No.1 -
for a sum of Rs.5 Lakhs along with interest @ 16% per annum,
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thereon at the rate of 16% per annum from 23 December,
1974 till date of payment;
for a sum of Rs. 10 lakhs together with interest thereon @ 16%
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per annum with quarterly rests, payable with effect from 29
January, 1975.
12. The Counsels for the Respondents agree to bring the demand drafts
for the entire amount to the Court on the next date of hearing. The Demand
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drafts shall be in favour of the Plaintiff Company. The interim order already
passed in this matter shall continue to operate till the next date of hearing.
13. Appeal is allowed in the above terms. All pending applications also
stand disposed of.
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14. List on 4 April 2018 for compliance.
PRATHIBA M. SINGH
Judge
FEBRUARY 15, 2018/ dk
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