1. Where a borrower obtains a loan and executes security documents, subsequent allegations that signatures were affixed in blank fail if not supported by evidence. Under the principle applicable to banking transactions, if a borrower avails a disbursed loan, it is presumed the documents were valid, and the borrower risks consequences of signing without reading. Failure to object at the time of signing or dispute via counter-proof closes such claims.
2. Penal or enhanced interest charged after default is a contractual right of the bank for breach of loan conditions. The rate remains valid unless compounded or reduced by a final decree. Charges computed in accordance with the agreement and the Apex Court's stance on penal interest are not usurious merely because they are high, provided there is no violation of RBI compounding guidelines.
3. An equitable mortgage by deposit of title deeds is valid if supported by a registered Memorandum of Deposit of Title Deeds and executed by the mortgagor. The absence of conflicting evidence or a valid counter-claim negates the defense that no mortgage exists.
4. Onus of proof regarding discrepancies in the Statement of Accounts lies on the borrower. Failure to file counter-proof or challenge entries in the Certified Statement under the Bankers Books Evidence Act results in the statement standing unrebutted and the bank's claim being accepted.
5. Principles of equity and natural justice warrant adjustment of interest if the bank has already realized a portion of the claim through the sale of secured mortgage properties. Higher interest rates may be reduced to reflect the time value of realized amounts and avoid double recovery for the same period.
