Bank Of Baroda vs Geeta Narang And Ors.

Ranjit Singh, J

Aggrieved against the action of the Tribunal below for dismissing the O.A. filed by the Bank against respondent Ms. Geeta Narang, who was defendant No. 7 in the O.A., the Bank has filed this appeal. The Tribunal has allowed the O.A. against defendant Nos. 1 to 4, namely, M/s. Talwar International. Mr. Vijay Choudhary, Mr. Kajal Talwar and Mr. Ved Prakash Choudhary, but had declined the prayer qua defendant Nos. 5 to 7, before the Tribunal below namely, Ms. Reba Dutta, Mr. Subhash Chandra Dutta and Ms. Geeta Narang. For strange reasons, the Bank has not appealed against that part of the order relieving defendant Nos. 5 and 6 of their liability. The Bank has chosen to impugn only that part of the order whereby defendant No. 7 who is present respondent No. 1 in this appeal, was similarly relived of her liability as guarantor. Mention to the facts, in brief, may be necessary to get the hang of the issues agitated in the appeal.

The Bank filed an application under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the RDDBFI Act) for the recovery of a sum of Rs. 78,28,218/- In fact, the Bank had earlier filed a suit before the Hon'ble Delhi High Court on 28.2.1995 which was later on transferred to the DRT M/s. Talwar International, defendant No. 1, is a partnership firm of which Mr. Vijay Choudhary and Ms. Kajal Talwar are partners They are the principal borrowers. defendant Nos. 4 to 7 were the guarantors, defendant Nos. 5 to 7 were mortgagors as they had offered their property as collateral security. The Bank had granted credit facilities, namely. Rs. 30 lac Packing Credit Limit, Rs. 40 lac Foreign Bill Purchase Limit and Rs. 40 lac Bank Guarantee Limit to the borrower In consideration thereof, the borrower had executed security documents on 9.9.1993. They also executed deed of hypothecation of goods, i.e. the raw material in the shape of gold bars, gold bricks, jewellery as semi-finished goods as ornaments, defendant Nos. 4 to 6 executed guarantees on 9.9.1993 with a limit of Rs. 110 lacs defendant Nos. 5 and 6 had created equitable mortgage in respect of property Plot No. 51, Pocket 52. Chitranjan Park. Kalkaji, New Delhi, measuring 125 sq. yds. The borrower enjoyed the credit facilities, but subsequently started violating the terms and conditions of credit facilities.

On 10.9.1993, defendant No. 1 borrower. M/s. Talwar International through its partners approached the Bank for executing certain Bank guarantees in favour, of MMTC against counter indemnity of the defendants It was as per the sanctioned limit. The Bank guarantee was due to expire on 9.9.1994 which was extended to 9.9.1995. The borrower/defendants, however, failed to fulfil the export obligation and the guarantee was invoked by the beneficiary, i.e., MMTC and a sum of Rs. 40 lacs was paid by the Bank on 2.2.1995 to MMTC. The Bank adjusted the margin money and the balance amount due was Rs. 28,96,000/- The borrower/defendant approached the Bank on 8.2.1994 for Rs. 24.51,836/- with invoice in respect of gold jewellery exported to the a consignee at Dubai. The documents were obtained by the Bank, but the defendant/borrower failed to pay the amount. The debit balance of Rs. 19,53,002/- with interest w.e.f. 26.12.1994 thus became due in the Packing Credit facility, respondent No. 1 (defendant No. 7) offered to create equitable mortgage in respect of her property, Municipal Old No. 1160-A (New No. 1242/21). Jain Bhawan, Behind Novelty Cinema, Baradan Nawab Wazir Phatak Habash Khan, New Delhi besides personally guaranteeing to the extent of Rs. 100 lacs with interest and cost. Equitable mortgage was created on 1.11.1994. Since the borrower failed to regulate the account, the Bank issued a letter requesting the borrower to liquidate the amount defendant No. 6, however, went to the extent of denying the creation of charge defendant Nos. 5 and 6 even lodged a complaint with the police alleging fraudulent mortgage of their property the Bank on its part claimed various amounts which was due with interest @ 20.75% p a compounded quarterly. This led to the filing of the suit which was ultimately transferred to the Tribunal.

The Tribunal, after taking into consideration the response filed by the different defendants, formulated the following points which required consideration in the case:

"1. Whether D5, D6 and D7 had not executed the Deeds of Guarantee?

Whether D5, D6 and D7 had not created equitable mortgage in respect of their immovable properties?

Whether the applicant is entitled to recover the amount claimed and if so. who all are liable?

Whether D7 has succeeded to establish the counter claim against the applicant?

Relief?"

The issues which were relevant would be whether defendant Nos. 5, 6 and 7 had executed any guarantee deed or not, or whether they had created any equitable mortgage. The issue also was whether defendant No. 7 (respondent No. 1) had succeeded in establishing the counter-claim against the Bank. The Tribunal, after detailed discussion, came to form a view that the Bank could not prove that the said defendants had signed deed of guarantee or had created any equitable mortgage and accordingly held that they are not liable to pay any amount as was claimed by the Bank defendant Nos. 1 to 4 were, however, held liable. The Tribunal below also found that there was no valid mortgage in respect of the property of defendant Nos. 5, 6 and 7 and held they are entitled to get their title deed back.

As already noticed, the Bank has not chosen to file any appeal against that part of the finding of the Tribunal where by defendant Nos. 5 and 6 have been held not liable The Bank has, however, filed the appeal against the finding where by defendant No. 7 (respondent No. 1) has been relieved of her liability on the ground that she had not signed the mortgage deed, etc.

I have heard the Counsel for the parties It is noticed that to prove the mortgage deeds signed by respondent No. 1, the Bank had led the same evidence against defendant Nos. 5 and 6 which is relied upon to prove the mortgage or guarantee deeds signed by respondent No. 1 (defendant No. 7). The Counsel for the respondent No. 1 therefore would be justified in submitting that the same witnesses were disbelieved on the basis of same affidavit filed and two defendants relieved of their liabilities on the ground that they have not signed the deed of guarantee but the same evidence is implicitly relied to return a different finding so far as the role of defendant No. 7 (respondent No. 1) is concerned.

The Counsel for the appellant Bank has contested the finding returned by the Tribunal below by referring to the evidence given by the respondent No. 1. By referring to the reasoning given by the Tribunal in regard to role of defendant No. 7 (respondent No. 1) the Counsel has taken me through the impugned order. As per the Counsel, the finding of the Tribunal below that there was no liability of 100 lacs when the respondent No. 1 signed the alleged undertaking on 1.11.1994 would not have any significance and so could not make any material difference. As per the Counsel, it was not necessary to show that on the date this undertaking was given by respondent No. 1 there was liability corresponding to the undertaking given. As per the Counsel, the undertaking could be given for any liability which may also be to cater for any increased liability in future. He would also point out to that portion of the evidence where the respondent herself had admitted while under cross-examination that the signatures appearing on the documents resembled her signatures arid that she was riot sure whether the said signature had been authored by her. The Counsel thus submits that the respondent did not dispute her signatures appearing on the document and, therefore, the Tribunal was not justified in ignoring this important piece of evidence which came on record through her own version.

I have considered the submissions made before me. The Tribunal, in my view, has rightly appreciated the evidence. It may call for notice here that once the execution of a document was denied, then it was for the Bank to examine witness in whose presence such document had been executed. The O.A. had been verified by Mr. Shambhu Nath Kundu, Assistant General Manager. He had deposed about having knowledge about the record which was made available to Him In the O.A. it is stated that he was Principal Officer of the Bank but the guarantee deed did not show in whose presence the same was signed Mr. Mahender Pratap was produced 33 witness to prove that the said document was signed in his presence. He also could not state whether these documents were signed in his presence Another witness. Mr. Jagdish Sarin, was produced to say that these documents were executed in his presence on 9.9.1993, but he also could not show his signatures on the documents alleged to have been signed. This witness was permitted to be cross-examined as well. The case had to be adjourned on a number of occasions as this witness could not be cross-examined though he was present. Ultimately, the cross-examination could not take place as he was posted abroad. His evidence thus can not be read in support the case of Bank. Subsequently, the evidence of Mr. S.K. Rastogi was offered who deposed that these documents were executed in his presence. The Tribunal was justified in observing that it cannot be assumed that the document was executed in presence of so many persons in the Bank and so observed that this evidence appeared artificial. This is a view which can reasonably be formed after appreciation of evidence. The view which has been formed by the Tribunal cannot be termed unjustified in any manner. It is possible for someone to take a different view but merely because a different view is possible it would not be fair to interfere in the finding recorded by the Tribunal below. I am conscious of the fact that while exercising the appellate jurisdiction the Appellate Tribunal is well within its right to re-appreciate the evidence. Even after such exercise. I have not been able to find any reason to find fault with the view taken by the Tribunal for which this Tribunal should take different view. The affidavits of same very witnesses which is relied upon by the Bank to prove its case against respondent No. 1 (defendant No. 7) are disbelieved. I have not been able to find any reason to believe the same evidence in part where the same evidence is disbelieved by the Tribunal and the Bank has accepted that part of appreciation of the evidence. Once the Bank felt satisfied with the finding returned by the Tribunal below in regard to the veracity of the evidence produced, it cannot be allowed to pick and choose to file appeal in a selective manner to challenge only part of the order whereby some finding returned by the Tribunal is challenged without raising any challenge to other part of the finding flowing from the same evidence.

Atleast, the Bank was required to disclose reasons for doing so. None is forthcoming, respondent No. 1 had also disputed her liability on the ground that she had not executed any deed of guarantee. Her case was also different as she had not given guarantee at the initial stage like other defendants She was brought as guarantor on much later stage. The Tribunal then considered under what circumstances this guarantee was needed In this regard the Tribunal has observed that on the date when she alleged to have given this guarantee there was no liability of Rs. 100 lacs for which this guarantee was obtained. She had also denied her signatures on the guarantee deed. The Bank had filed two affidavits which were found to be contrary. The witness had denied the suggestion that AW 1/50 was prepared in her presence. The witness stated that she cannot say how AW 1/49 came into the possession of the Bank. Her answer that the signatures appearing on the deed resembled her signature would appear rather natural and truthful account. She could have safely denied the same but still choose to be forthright in stating that these resembles her signatures. This can not mean that she has admitted her signature on the document. This witness therefore sounds natural.

The Tribunal has also considered the aspect of the reply that defendant No. 1 had given this additional collateral security of the property of Smt. Geeta Narang. Defendants had stated that defendant No. 1 had fraudulently secured the title deed and had thereafter deposited it with the Bank. It is only the guarantee deed which is alleged to have been signed by the respondent No. 1. This guarantee deed was found doubtful and suspicious for the same reasons for which the Tribunal doubted the signing of guarantee deed by defendant Nos. 5 and 6. Once the Bank has chosen not to contest that part of the finding expressing doubt about the evidence, it would be difficult for the Bank to impugn the finding qua one person along when evidence is the same and the reasoning for disbelieving the evidence remain same. It cannot be said that this evidence given against one person is acceptable and is unacceptable against the other. I have not been able to locate any reason recorded to justify this discriminatory approach adopted by the Bank. During his argument, the Counsel for the Bank was unable to disclose any reason for which the Bank had chosen not to file any appeal against defendant Nos. 5 and 6 but had decided to do so only against the present respondent. He could not offer any justification despite being queried by the Tribunal. I do not find any justification, legal or otherwise, to interfere in the impugned order passed by the Tribunal below. The present appeal is accordingly dismissed. The parties are left to bear then own cost.