Dismissed

N.Ramesh Kumar v. Bm.,Sbi.,Balanagar,Rr Dist and 2 Ors.

Telangana HC6 Jun 2023CCCA/8/2000

Case brief

AI extract

What is this about?

The High Court of Telangana dismissed an appeal filed by a defendant who was held jointly liable as a guarantor and under an equitable mortgage for a bank loan. Upholding the trial court's view, the Apex Court rejected claims that documents were signed on blank forms without knowledge, finding the defense untenable given the witness's employment and education.

What did the court decide?

The City Civil Court Appeal was dismissed, confirming the judgment and decree of the trial court against the appellant.

N.Ramesh Kumar Vs Bm.,Sbi.,Balanagar,Rr… — Contract and Commercial Disputes | Telangana HC (2023)

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IN THE HIGH COURT FOR THE^{STATE OF TELANGANA} AT HYDERABAD

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TUESDAY, THE SIXTH DAY OF JUNE TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE^DR. JUSTICE^{G.RADHA RANI}

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ctrY ctvtL co URT APPEAL NO:⁸ OF²⁰⁰⁰

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Appeal under section 96 of C.P.C.^{against the Judgment and Decreedated} 06-03-1999 made in O.S.No.1957^{of 1988 on the file of the Court of the lV Senior} Civil Judge, City Civil Court,^Hyderabad.

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Between:

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N.Ramesh Kumar, S/o late^{N. Ramana,Aged about 45 years, Occ- Service} RUo H.No. 4-8-127, Gowliguda,^Hyderabad.

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AppellanUDefendant No.3

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AND

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1 State Bank of lnida, Estiblished^{under StateBankof lndiaAct, Branchedat} Balanagar, Ranga Reddy District.^{Representedby its Branch Manager.}

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...ResPondenUPlaintiff

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M/s. Sharmili Fabrics & Garments,,^{Represented by its Proprietory ConcernS} Raju, R/o LIG 46, KPHB, Qrts.,^Hyderabad.

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3 S. Raju,, S/o Satteyya, aged about^{50 years' Occ- Proprietor o Sharmili} Fabrics and Garments,^R/o 37-40,^{Jagadgirigutta, Opp. IDPL Colony'} Hyderabad.

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(Appeal against RR-2&3 dismissed for default^{videcourt order dated 27 -04-} 2007)

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...Respondents/Defendants.

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Counsel for the Appellant:^NoneAppeared

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Counsel for the Respondents:^NoneAppeared

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The Court made the following: JUDGMENT

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THE HONOURABLE^{DT. JUSTICE G. RADHARANT}

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CITY CIVIL COURT AP^{PEAL No.8OF 2000}

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JUDGMENT

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This Appeal is filed by the appellant-defendant^{No.3aggrieved} by the^judgment and decree^{dated 06.03.1999passedin O.S.No.l957} of 1988 by the IV Senior Civil^{Judge, City CivilCourt,Hyderabad.}

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The parties are hereinafter^{referred as arayedbefore the trial}

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court.

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The suit rvas filed for^{recovery ofsum ofRs.1,54,103.15ps.} with interest @ 125%^per annum^{and to pass preliminary decreefor} sale of mortgaged^property, in^{case the saleproceeds werenot} sufficient for the amount^due, to^{pass a personal decree against the} person and property of the defendants, and to^{order sale of} hypothecated and pledged^goods under^{the directionof the court and} to appropriate the sale^{proceeds towards satisfaction of the suit} amount and costs of the suit.

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'fhe case of the plaintiff bank in brief was that the defendant No.2 was the proprietor of the defendant No.l^{and in the}

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T', oRR,J C C.C-A.No.8 ol :tN)t)

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year 1987 approached their^{bank for credit lacility and agreed to} charge and^{hypothecate the machinery, equipments, tools, etc',} belonging to him^{lying in their godown.They acceptedthe said} proposal and granted cash^{credit facilityof Rs.50'000/-' Thereupon,} all the defendants^{executed an agteementof hypothecation and} agreement of^{guarantee dated06.07.1987. Again in the same year} 1987, the defendant^{No.2 approached on behalfofdelendant No'1 and} requested for term^{loan for the purpose of purchase of machinery' The} plaintiffaccepted the said^{proposal and offered to grant a term loan of} Rs.50,000/-.^{Thereafter,all the defendantsexecutednecessary} docurnents in^{favour of their bank. The defendantNo.3 executed} agreement of^{hypothecationand guaranteesagreeing to repay the} balance and also^{executednecessaryguarantee. The loanfacilities} were secured by^{equitable mortgage by deposit of title deeds of} properties belonging to^{the defendantNo.3. The defendantNo'3} deposited^{his title deedswith an intention to createequitable mortgage} on 26.06.1981 .^{The defendantscommitted defaultin paymentof} amount advanced by^{the plaintiff.Thereupon,the plaintiff issued a} legal notice but the^{defendantsfailedto repaythe suit amount. Hence,} the suit.

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Dt GRR.J C⁽ .4.,1.|'o.8 0l :tt)0

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The defendant Nos.1 and 2 filed^{writtenstatement} admitting availment ol suit^{loan and the outstandingamount due.} They submitted that due to the^{loss sufferedby them,they couldnot} repay the amount due to the circumstances^{beyondtheir control.}

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'fhe delendant No.3 tlled written statement contending that he was not aware about^{the borrowingof the loan by defendant} Nos.l and 2 and executing the^{documentsand hypothecationof} properlies in favour of the bank. He denied that^{he stood as a} guarantor for the defendant No. 1 and further contended^{that he had not} signed on agreement of^{hypothecationand guarantee deed dated} 06.01 .198'7, the signatures, if any appearing^{on the allegedagreement} were obtained without disclosing the^{contents and purpose thereof.} There was no privity of contract in between^{plaintiffand himselfand} that the claim was not tenable. He further contended^{that the atleged} documents in respect of the property were obtained^{by defendant} No.l by playing fraud upon him. He never intended to^{create equitable} mortgage over the suit schedule property. There was no cause of action against him and prayed to dismiss the suit against him

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D. CRR.J C.C.C.A No I ol2u)t)

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1 Basing on the said^{pleadings,the trial court framed the}

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following issues:

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Whether the third defendant^{is not liableto pay} any amount to the^{plaintiff as the first defendant} played fraud on him and obtained^{the documents} from him? u To what reliefl

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The PW.1 was examined^{on behalf of the plaintiffand} Exs.Al to Al5^{were marked. The defendantNo'3was examinedas} DW.1. No documents^{were marked on behalf of the defendants'}

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g . On considering^{the oral and documentary evidence on} record, the trial^{courtdecreed the suit by passinga preliminarydecree} in favour of the^{plaintiff bank for an amount of Rs'1,54,103'15 ps'} with l2o/o interest^{per annumby holding the time for redemption as} three months.

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Aggrieved by^{the said judgmentand decree,the} defendant^{No.3 preferred this appealcontending that the trial court} failed to see that^{the appellant never stood as guarantorfor the suit} transaction and^{the documentsobtained by the bank in that regard} from the appellant^{were withouthis consent and withoutdisclosingto}

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D.oRR.J ( C ( A No t\ ol )|llt)

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the appellant the contents and^{the et'fect thereoL The trial court failed} to appreciate that the appellant's right to^{recover amount from the} principal borrowers was in.rpaired on account^{of the respondent No.I 's} negligence. In spite of the appellant^{informing the respondent No.1} bank regarding the^{respondentNos.2and 3 disposingoff their} properlies with a view to defeat the claim of^the bank,^{the respondent} No.l bank failed to take steps^{immediately, as a result,the respondent} Nos.2 and 3 succeeded in disposing off^{their properties.Therefore,} the liability of the appellant, if any,^{for the suit amountstood} discharged. The trial court failed to^{advertto Exs.Al4and A15} letters addressed by the appeltant to^{the respondentbank which would} show that the trial court had^not applied^{its mind to the defenceofthe} appellant. The finding of the trial^{court that the appellant was also} liable along with the respondent Nos.2 and 3^herein for the^suit amount was without any evidence and^{prayedto allow the appeal by} setting aside the decree and^judgment dated^{06.03.1999passed in O.S.} No.1957 of 1998 by the IV Senior Civil Judge, City Civil Court, Hyderabad

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D, GRR.I C-C-C-.4 No.8 ol z(No

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I 1. There is no representation^{by the leamed counsel for the} appellant as well as^{the leamed counselfor the respondents'As the} appeal is^pertaining to^{the year 2000 i.e., about 23 years ago' it is} considered fit to^{dispose of the sameon merits.}

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On a^perusal of^{the evidence on record,the field officer} of the plaintiff^{bank was examined as PW.l and he stated that the} defendant No. I^{was a proprietary concern and defendantNo.2 was its} proprietor and the defendant No. I avaited two loans^{from theirbank.} First one^{was cash credit working capital loan and second one was} term loan^{with a limit of Rs.50,000i-each. The defendant No'3was} the guarantor^{for the defendantNos. I and 2. Before receivingthe loan} amount, all the^{defendants executed Exs.Al to ,4'6 i'e', agreementof} hypothecation,^{agreement of guarantee,pronote,deliveryletter'} general agreement and^{ancillary agreement' Boththe loanswere} secured by^{personalguaranteeof defendant Nos'2 and 3 and also by} equitable mortgage of^{house property of defendantNo'3'The} defendant No.3^{deposited the certifiedcopy ofthe partitiondeed dated} 04.06.1987 and the^{encumbrance certificate creatingan equitable} mortgage of the^{plaintschedule propertywhichwere markedas}

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I, ARR.J a⁽ C..1 l'o.tl ol ltl)o

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Exs.A7 and A8.^{Ilx.A10was the confirmationletter dated 26.06.1987} confirming the moftgage^{by defendantNo.3. He furtherstatedthat the} bank had issued notice before^{filing the suit.}

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The defendant Nos. I and^{2 failed to cross-examine PW.1} was and the defendant No.3^{cross-examinedPW. l,but nothing} elicited in his cross-examination^{to discreditthe testimonyof PW. l.}

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The defendant No.3 was examined as^DW. l.^{He stated} that he never acted as^guarantor for^{suit loan and not executed any} docurnents in favour of the^{plaintiffbank and his signatureswere} obtained by the plaintiff bank in blank^{unfllled forms without} disclosing the contents therein.^{He nevero ffered his properties to the} plaintiff bank by way of equitable mortgage to the^{loan transaction} and he was not liable to^{pay the} suit^{amount. He admittedthat he did} not give any reply to the legal notice.

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The trial court on observing that^DW. I^{admittedthat he}

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was a B.Sc. graduate and that he was working as Section^Officerin Municipal Administration, Secretariat observed that the contention of the defendant No.3/DW. I that he signed on blank^{forms and that he}

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D CRR-J C^(- a A.t!o.8^o[)000

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was not aware of^{the contentsof the documentscould not be believed.} The trial court also^{observedthat the defendantNo.3 if signed on the} blank forms under^{compellingcircumstances, he wouldhave reported} the matter to the^{officialsof the plaintiffbank stating the compelling} circumstances under^{which he signedor atleast he would have given a} notice in that regard,^{but no steps were taken by the defendant No'3'}

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The evidence^{of DW'I also would disclose that he} accompanied the^{defendantNo.2 to the bank and deposited his house} title deeds to^{the plaintiff bank. Whenhe himselfaccompanied} defendant No.2^{to the bank and deposited his title deedsto the bank} and being a^{responsible employeeworking in Secretariat andan} educated person^{statingthat he was not aware of the contents of the} documents and^{signed on blank forms, is untenable'}

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|T.Thetrialcourtonconsideringtheevidenceonrecordheld that the defendant^{Nos.l and 2 obtainedloan from the plaintiff bank} by executing the^{suit documents and by creating equitable mortgageof} the schedule^{property in favourofthe plaintiffbankand the defendant} No.3 acted as a^{guarantor and he was liable to pay the suit amount and} the plaintiff was^{entitledfor sale of propertyand for recoveryof the}

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Dt^(iRR.J (.C-C.A-No )l ol ltJ|

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amount. This Court completely agrees with the observation of the trial court in this regard

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18.^-l'his Court does not find any reason to set aside the above reasonedjudgment and decree ofthe trial court. Hence, the City Civil Court Appeal is dismissed confirming the judgment and decree passed by the trial courl

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In the result, the City Civil Court Appeal is dismissed, confirming the^judgment and decree dated 06.03.1999 passed in O.S. No.l957 o1'1988 by the tV Senior Civil Judge, City Civil Court,

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Hyderabad. No order as to costs

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Miscellaneous Applications, if any pending, shall stand closed.

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//TRUE COPY//

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sdT. B.S.CHTRAIIJ JOINT REGISTRAR ,/ )Y, SECTION OFFICER

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To,

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The lV Senior Civil Judge, City Civil Court, Hyderabad.^{(with records)}

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One CC to SRl. P.V. SANJEEVA^RAO,Advocate [OPUC]

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One CC to SRl. K. SREEDHAR RAO, Advocate [OPUC]

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Two CD Copies

PSR ,ly

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HIGH COURT

GRR,J

DATED:0610612023

JUDGMENT

CGCA.No.8 of 2000

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DISMISSING THE CITY CIVIL COURT APPEAL WITHOUT COSTS.

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6r4'^ #"

N.Ramesh Kumar v. Bm.,Sbi.,Balanagar,Rr Dist and 2 Ors.

Case brief

What is this about?

What did the court decide?

N.Ramesh Kumar v. Bm.,Sbi.,Balanagar,Rr Dist and 2 Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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