Dismissed

Madan Lal Kataria and Anr. v. Faridkot Bathinda Kshetriya Gramin Bank and Ors.

Punjab & Haryana HC4 Mar 2014RSA/2874/2011

Case brief

AI extract

What is this about?

The High Court dismissed the second appeal filed by defendants challenging a bank recovery suit. The court held that the lower courts correctly upheld the decree based on admitted loan details and cogent evidence, finding no error of law to warrant intervention under Section 100 CPC.

What did the court decide?

The appeal was dismissed; the impugned judgement and decree were upheld; no order as to costs passed.

Madan Lal Kataria and Anr. Vs Faridkot… — Banking and Recovery | Punjab & Haryana HC (2014)

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RSA No.2874 of 2011

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

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RSA No.2874 of 2011 Date of Decision : 4.3.2014

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Madan Lal Kataria and another

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.....Appellants

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Vs.

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Faridkot Bathinda Kshetriya Gramin Bank and others

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......Respondents

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CORAM : HON'BLE MR. JUSTICE RAMESHWAR SINGH MALIK

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Present : Mr. R.K. Girdhiar, Advocate for the appellants.

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To be referred to the Reporter or not ?

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Whether the judgement should be reported in Digest ?

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RAMESHWAR SINGH MALIK, J

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Defendants are in second appeal, against the concurrent findings of facts recorded by both the learned courts below, thereby decreeing the suit for recovery filed by of the plaintiff-bank.

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Brief facts of the case, as recorded by the learned first appellate court, are that plaintiff bank instituted suit through competent person alleging that defendant no.1 being proprietor of M/s Kataria Computer Printing approached the plaintiff in the month of January 1995 for term loan facility of Rs.3 lacs for setting up computer printing material and offered as security the property measuring 185 sq. yards bearing Municipal No.B-III/235 as detailed and described in the heading of the plaint. Defendant no.1 also alleged that he is owner in possession of the suit property and also offered defendant no.6 Surjit Kumar as surety for repayment of the loan facility. Plaintiff bank acceded to the request of the defendants and sanctioned the loan after Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

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RSA No.2874 of 2011 2

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execution of necessary loan documents in favour of the plaintiff and also getting furnished guarantee-cum-indemnity bond. Defendant no.1 also mortgaged his immovable property measuring 185 Sq. yards in favour of the bank. After availing loan facility, defendant also deposited original title deed as well as partition deed and later on admitted the availing of loan and his liability to repay the same admitting the balance of Rs.2,12,748/- on 16.12.1997. Surjit Kumar also executed balance confirmation letter-cumrevival letter on 10.1.1998 and defendant no.1 was liable to pay the balance loan amount. Defendant has failed to make the payment of the loan amount and committed default in payments. Later on plaintiff came to know that defendant no.1, to avoid repayment in connivance with defendants no.2 to 5, made the fake transfers of the property and now the same is shown in the name of defendant no.5 and these transfers have no effect in the eyes of law. Plaintiff Bank also lodged complaint with the police authorities and the case was got registered bearing FIR No.180 dated 18.9.2005. The police authorities also failed to register complaint in time and the plaintiff bank had also filed the complaint, which is pending in the court of Mrs. Girish, the learned J.M.I.C., Faridkot. Now a sum of Rs.5,65,761/- is due and recoverable from the defendants. Plaintiff bank also alleged that they have produced statement of loan account and suit has been filed within limitation on the basis of execution of balance confirmation letters against the defendants.

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On notice defendants filed three separate sets of written statements taking almost similar stand. They specifically denied all the averments of the plaint. Defendants no.1 and 2 raised objection regarding the maintainability of the suit and further alleged that the plaintiff bank has claimed interest on the very high rate and against the instructions of Reserve Bank of India.

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Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

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RSA No.2874 of 2011

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Defendants no.1 and 2 admitted the factum of obtaining the loan, but denied all other allegations challenging the rate of interest claimed by the Bank. Defendants also averred that they have no objection if the property already mortgaged with the bank be put to auction or sale for recovery of the loan amount as well as its genuine interest and prayed for dismissal of the suit.

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Defendant no.6 challenged the stand of plaintiff on the ground that he has identified Narinder Kataria, only for obtaining loan and he has trusted upon the officials of the plaintiff bank, who obtained his signatures on some blank pointed forms. Defendant denied the factum of execution of guarantee deed as alleged by the plaintiff. Defendant also averred that the alleged mortgaged property is of the value of more than 20 lacs, so any amount due to the bank can be recovered from the mortgaged property and prayed that firstly the mortgaged property be put to sale. While denying all other allegations of the plaint, a prayer was made for dismissal of the suit.

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Defendants no.3 to 5 filed separate written statement taking legal objections that there is no valid, legal equitable mortgage of the house in dispute by defendant no.1 in favour of the plaintiff. Defendant no.5 is a bonafide purchaser for value in good faith, as he was not having any notice of alleged mortgage. Defendant no.5 claimed ownership in possession of the house in dispute. Defendants also raised legal objections in regard to maintainability, limitation and the suit has been filed on false, fabricated and manipulated documents. On merits, these defendants specifically denied the taking of loan by defendant no.1 and reiterated their stand regarding bonafide purchaser and mortgaging of property/house in question and prayed for dismissal of the suit.

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Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

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RSA No.2874 of 2011

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On completion of pleadings of the parties, the learned trial court framed the following issues :-

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“1. Whether the plaintiff is entitled for the recovery of suit amount alongwith interest, as prayed for ? OPP.

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Whether the suit of the plaintiff is not maintainable ? OPD.

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Whether the suit of the plaintiff is time barred ? OPD.

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Relief.”

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In order to prove their respective stands taken, both the parties led their documentary as well as oral evidence. After hearing both the parties and going through the evidence brought on record, the learned trial court came to the conclusion that the plaintiff has duly proved its case. Consequently, the suit was decreed and plaintiff was held entitled for recovery of Rs.5,65,761/alongwith interest @ 12% p.a. from the date of filing of the suit, till realisation of the decretal amount. Feeling aggrieved, defendants filed their first appeal, which came to be dismissed by the learned Additional District Judge, Faridkot, vide impugned judgement and decree dated 1.11.2010. Hence, this second appeal at the hands of the defendants.

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Learned counsel for the appellants submits that the plaintiffrespondent failed to produce sufficient evidence to prove its case. The suit was liable to be dismissed. However, the learned courts below have failed to appreciate the true facts of the case, as well as the evidence available on the record. Since the learned courts below misdirected themselves, while completely misreading, misconstruing and misinterpreting the facts and evidence, the impugned judgements and decrees were liable to be set aside. He further submits that onus was on the plaintiff to prove its case, particularly on

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Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

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RSA No.2874 of 2011

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issue no.1 However, plaintiff failed to produce the sufficient evidence. On the other hand, there was convincing evidence available on the record to non-suit the plaintiff-respondent. Finally, he prays for setting aside the impugned judgements and decrees, by allowing the present appeal.

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Having heard the learned counsel for the appellants at considerable length, after careful perusal of the record of the case and giving thoughtful consideration to the contentions raised, this court is of the considered opinion that in view of the fact situation of the present case, no interference is warranted at the hands of this court, while exercising its appellate jurisdiction under Section 100 of the Code of Civil Procedure (`CPC' for short). To say so, reasons are more than one, which are being recorded hereinafter.

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It is a matter of record and not in dispute that defendant no.1 took loan from the plaintiff-bank. It was so admitted in the pleadings of the parties. Defendant no.6 also admitted his signatures. Thus, execution of loan documents between the plaintiff and defendant no.1 stood duly proved. Defendants no.3 to 5 were related to defendant no.1. In fact, defendant no.1 took the loan and the house was purchased with the help of loan amount by defendants no.2 to 5. Once these material facts were admitted, defendant had no case either on facts or in law. It is so said because admission is the best evidence. Having said that, this court feels no hesitation to conclude that the learned courts below committed no error of law, while passing the impugned jdugements and decrees and the same deserve to be upheld.

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Plaintiff-respondent-bank produced voluminous documentary evidence on record in the form of Exs.P-1 to P-24. The learned trial court rightly appreciated the documentary as well as oral evidence, before decreeing

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Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

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RSA No.2874 of 2011

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the suit. The learned trial court recorded its cogent findings on issue no.1. Similarly, the learned Additional District Judge re-appreciated the facts as well as evidence available on record. Thus, it can be safely concluded that both the impugned judgements and decrees were not suffering from any infirmity and deserve to be upheld.

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Before arriving at a judicious conclusion, the learned Additional District Judge, Faridkot, discussed each and every relevant aspect of the matter, recording cogent findings in para 13 and 14 of the impugned judgement. Relevant part of paras 13 and 14 of the impugned judgement reads, as under :-

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“ No appeal is preferred by defendants no.1 and 2, who are impleaded in the appeal as respondents no.2 and 3. The oral evidence in support of pleadings is fully proved by PW-2 Mohan Singh, who is Manager of the plaintiff bank. His testimony and documents reveal that Narinder Kumar defendant no.1 (respondent no.2 in the appeal) approached the plaintiff bank for a term loan facility of Rs.3 lacs against security of building constructed over land measuring 185 Sq.yards bearing Municipal No.B-III/235 situated in the Main Bazar, Faridkot. Defendant no.6 Surjit Kumar, who is impleaded in the appeal as respondent no.4 stood guarantor for repayment of loan facility after admitting and acknowledging the liability to repay the loan amount and after admitting the balance of Rs.2,12,748/- as on 16.12.1997 as per renewal letter Ex.P-5. Surjit Kumar as his guarantor executed deed of hypothecation of goods to secure a demand cash credit Ex.P-12 on 9.12.2002 Ex.P-20

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Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

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RSA No.2874 of 2011

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on 20.1.1995. Thus as on 19.2.2002 the balance was Rs.2,29,426/- as revealed from Ex.P-12. At the time of execution of documents defendants also executed revival letters confirmation of loan etc. Besides this he also mortgaged his property in favour of the plaintiff bank. Surjit Kumar defendant no.6 executed guarantee deed Ex.P21 at the time of availing loan on 20.1.1995. He failed to repay the loan as per agreement. The plaintiff bank has to file the suit. Before filing of the suit the defendant confirmed his loan on 31.12.2004 vide Ex.P-2 on 15.1.2005. Thus the loan was confirmed within the statutory period of three years from the first advancement of loan. At the time of availing loan he showed him as owner of the property by producing partition deed in his favour in support of his share in the property bearing Municipal No.B-III/235 situated in the area referred above. At the time of filing of suit as revealed from statement of account Ex.P-4 Ex.P-5 Rs.5,65,761/- was due against him.

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In order to avoid repayment to the plaintiff bank, Narinder Kumar defendant no.1 with the connivance of his wife defendant no.2 Urmila Kataria sold the property as alleged by the plaintiff bank who had further transferred it in favour of defendant no.5 Nisha his sister-in-law wife of Madan Lal appellant no.2. Ex.P-26 dated 22.10.1997 reveals that Narinder Kumar house no.B-III/235 in favour of Urmila daughter of Kharaiti Ram son of Sohan Lal, for a

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Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

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RSA No.2874 of 2011

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consideration of Rs.2,60,000/-. Thus he sold the land to his wife not showing his wife but showing her as daughter of Kharaiti Ram. Thereafter Urmila Kataria wife of Narinder Kumar sold the same house for a consideration of Rs.2,90,000/- in favour of Nisha by showing her as wife of Madan Lal son of Babu Ram vide sale deed Ex.P-27 dated 9.5.2000. Thus sale deed Ex.P-27 was executed through Urmila Kataria only to raise plea of bonafide purchaser in favour of Urmila Kataria by earlier selling the same house in favour of his own wife Urmila showing her as daughter of Kharaiti Ram instead of wife of Narinder Kumar vide sale deed Ex.P-26. This sale deed Ex.P-26 was executed only to avoid the personal liability of Narinder Kumar to pay debt of the bank. The bank also got lodged FIR No.180 dated 18.9.2005 against Narinder Kumar, Babu Ram, Urmila Kataria Madan Lal and Nisha Kataria. This house was sold by Babu Ram in favour of his son Narinder Kumar vide sale deed dated 12.4.1996 Ex.D-1. Thus sale deed in favour of Nisha was executed only to defraud the bank. Appellant's counsel failed to show under what laws the mortgage deed in favour of the plaintiff bank was void. At the time of execution of mortgage deed, loanee Narinder Kumar was owner of the property as reflected in the sale deed Ex.D-1. Thus mortgage deed in favour of the plaintiff bank was rightly executed and it seems that the appeal is filed only to defraud the plaintiff bank and to circumvent the process of

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Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

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RSA No.2874 of 2011

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recovery of the decretal amount which otherwise is public money. Everything was done within the family and intention of Nainder Kumar was to defraud the plaintiff bank. His intention is forfeited from the fact that he earlier executed sale deed in favour of Urmila Kataria his wife and then in favour of Nisha. He at the time of taking loan also mortgaged the share of Babu Ram as well as Madan La. At that time Madan Lal did not raise any objection and the learned trial court rightly held that the suit amount is recoverable from the property of Narinder Kumar which was mortgaged at the time of taking loan by him in favour of the plaintiff, learned trial court rendered reasoned judgement.” A bare combined reading of both the impugned judgements would show that the learned courts below proceeded on factually correct and legally justified approach, while decreeing the suit for recovery. In fact, the defendants-appellants were trying to play smart with a view to avoid their financial liability. There was sufficient, cogent and well convincing evidence available on record to decree the suit of the plaintiffs and the same was rightly decreed by the learned courts below. In this view of the matter, it is unhesitatingly held that the impugned judgements and decrees were based on sought reasons and the same deserve to be upheld for this reason also.

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During the course of hearing, learned counsel for the appellants could not point out any jurisdictional error or patent illegality apparent on the record of the case in either of the judgements passed by the learned courts below. They also failed to put into service any substantive argument, so as to convince this court to take a different view than the one taken by the learned

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Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

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courts below. Further, no question of law, much less substantial question of law has been found involved in the present case, which is sine qua non for interference at the hands of this court, while exercising its jurisdiction under Section 100 CPC. Thus, the impugned judgements and decrees deserve to be upheld for this reason, as well.

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No other argument was raised.

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Considering the peculiar facts and circumstances of the case noted above, coupled with the reasons aforementioned, this court is of the considered view that present appeal is misconceived, bereft of merit and without any substance, thus, it must fail. No case for interference has been made out.

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Resultantly, instant appeal stands dismissed, however, with no

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order as to costs.

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4.3.2014 (RAMESHWAR SINGH MALIK) GS JUDGE

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Sahni Greesh 2014.05.20 14:57 I attest to the accuracy and integrity of this document High Court, Chandigarh

Madan Lal Kataria and Anr. v. Faridkot Bathinda Kshetriya Gramin Bank and Ors.

Case brief

What is this about?

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Madan Lal Kataria and Anr. v. Faridkot Bathinda Kshetriya Gramin Bank and Ors.

Case brief

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