B. Raghunath Pai vs Karnataka State Financial Corporation Ltd. & Others

H.P. Sandesh, J

Heard the learned counsel for the appellant and learned counsel for the respondent No.1.

This appeal is filed challenging the judgment and award passed in Misc. Case No.64/2008 wherein, the Trial Court has directed the respondent Nos.1 and 2 therein to personally pay the amount of Rs.13,82,262/- with interest at 21.5% per annum from the date of petition till its realization, as the appellant herein had committed default in payment of amount which was borrowed to the tune of Rs.11,70,000/- on 24.01.1996.

In view of the default committed by the appellant, the vehicle which was hypothecated was also sold and hypothecation was cancelled and claim is made against the respondent Nos.1 and 2. In order to substantiate the claim of the petitioner, the petitioner-Corporation has examined its Manager as P.W.1 and got marked the documents as Exs.P1 to P15. The respondent No.3 has examined himself as R.W.1 and respondent No.1 has examined himself as R.W.2 and got marked the documents as Exs.R1 to R10.

The Trial Court, having considered the claim made by the petitioner-Corporation and also considering both oral and documentary evidence placed on record, particularly the documents at Exs.P14 and P15 i.e., Ledger Extracts, taken note of the payments made by the appellant herein and also the interest paid before the Court. The Trial Court, while considering the points for consideration, particularly, point No.1 i.e., with regard to the cancellation of the hypothecation, comes to the conclusion that hypothecation was cancelled, since the prospective purchasers have purchased the vehicle in the auction. The Trial Court also, while considering point No.2 with regard to whether the respondent Nos.3 to 8 prove that they have purchased the petition schedule property mortgaged by the respondent No.1 in favour of the petitioner-Corporation and they are also the bonafide purchasers, answered both the points as ‘negative’ and comes to the conclusion that the petitioner-Corporation is entitled for the claim made in the claim petition and granted the order against the respondent Nos.1 and 2 and directed them to personally pay the amount of Rs.13,82,262/- with interest at 21.5% per annum and also observed that the petitioner-Corporation is at liberty to attach and sell the schedule property to recover the petition claim amount from the respondent Nos.1 and 2. Being aggrieved by the said order, the respondent No.1 before the Trial Court i.e., the appellant herein has preferred this appeal.

The main contention of the learned counsel for the appellant is that the Court below failed to consider the fact that once the appellant had already closed the loan account in the year 2000 and subsequently, they have issued letter dated 18.03.2000 and 23.03.2000 to the respective Regional Transport Office, the said letters are not properly considered by the Trial Court. Under such circumstance, the impugned order passed by the Trial Court is erroneous and the very application is not maintainable before the Trial Court and the same is hopelessly barred by law of limitation. It is also contended that the appellant had settled the loan account in the yeaer 2000 and the respondent No.1 cannot contend that they have issued letter only for removing the hypothecation charges and respondent No.1 had suppressed the said fact and obtained an order. Hence, it requires interference.

Per contra, learned counsel for the respondent No.1 would submit that, it is not in dispute that amount was availed by the appellant and it is also not in dispute that he has not paid the amount and the vehicles are sold. On account of sale of vehicles, hypothecation was cancelled and the same is discussed by the Trial Court while considering point Nos.1 and 2. The Trial Court also, while answering point No.3 regarding liability is concerned, taken note of the documents Exs.P14 and P15-Ledger Extracts with regard to the issue is concerned. The Trial Court, with regard to the limitation also, taken note of the payment made by the appellant herein and the very contention that account had been closed in the year 2000 itself cannot be accepted and the letters addressed are for removing hypothecation charges since, the vehicles which were hypothecated were sold to the prospective purchasers and the same does not amount to very closure of the account as contended by the learned counsel for the appellant.

Having heard the learned counsel for the appellant and learned counsel for the respondent No.1, the Trial Court also, while considering point Nos.1 to 3, based on the contention taken by the appellant herein, formulated point Nos.1 and 2 with regard to the cancellation of hypothecation and with regard to the contention of respondent Nos.3 to 8 that they are the bonafide purchasers of the petition schedule property mortgaged by the first respondent in favour of the petitioner-Corporation and answered the said points as ‘negative’. No doubt, the respondent Nos.3 to 8 have purchased the petition schedule property which were hypothecated, decree is passed against the respondent Nos.1 and 2 to personally pay the amount of Rs.13,82,262/- with interest at 21.5% per annum and also given liberty to the Corporation to attach and sell the petitioner schedule property and recover the petition claim amount.

Though the learned counsel for the appellant contend that there was closure of the account, no such material is placed before the Court. The counsel also relied upon the document of Ex.R1-cancellation of hypothecation agreement and Form No.35 as Ex.R1(a) and Ex.R2-cancellation of hypothecation agreement and Form No.35 as Ex.R2(a), those documents are with regard to the cancellation since, the prospective purchasers have purchased the vehicles, when the auction was conducted and the other documents which have been relied upon by the learned counsel for the appellant herein are encumbrance certificates, Khata Extract, RTC, B Extracts and legal notice and those documents are also not helpful to the appellant herein. The appellant also not disputed the very claim made by the respondent No.1 and admitted the borrowing of loan and non-payment of the amount and also admitted the sale of vehicles. But, the very contention of the appellant herein is that the account was closed and the said contention cannot be accepted and the Trial Court, considering all these material on record, comes to the conclusion that respondent Nos.1 and 2 shall personally pay the amount of Rs.13,82,262/- with interest at 21.5% per annum, from the date of petition till its realization and the writ petition which was filed was also dismissed and subsequently, payments are also made and these aspects were taken note by the Trial Court with regard to the limitation is concerned since, the appellant has raised the contention that claim is barred by limitation. Hence, I do not find any error committed by the Trial Court in allowing the petition and directing the respondent No.1 and 2 therein to personally pay the amount as per Exs.P14 and P15-Ledger Extracts.

Accordingly, the appeal is dismissed.