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Judgment
S. Ravi Kumar, Chairperson
This Appeal is preferred under Section 20 of the Recovery of Debts Due to Bank and Financial Institution Act, 1993 against judgment dated 23. 7.2015 in OA 818/2011 on the file of DRT, Bangalore.
The appellant herein is 3rd defendant in the said OA and first respondent is bank and respondents 2 and 3 are borrowers. First respondent bank filed above OA for recovery of a sum of Rs.13,62,310.65p being principal and interest due thereon. As per prayer portion, defendants 1 and 2 are personally liable for the said amount and a recovery certificate is prayed against them. Tribunal below dismissed the OA against defendants 1 and 2 but granted recovery certificate against 3rd defendant for the suit amount of Rs.13,62,310.65p. Aggrieved by the same, present appeal is preferred.
Heard both sides.
Main argument of advocate for appellant is that in the prayer of OA it is only against defendants 1 and 2 and no relief is claimed against 3rd defendant for the reason that bank received Rs.55,94,091/- from 3rd defendant, appellant herein and issued a discharge certificate dated 5.10.2010, but Tribunal below without any relief against appellant granted a recovery certificate and discharged the borrowers against whom relief is claimed. It is submitted that order of Tribunal below is contrary to law and even against the relief claimed by the bank and for that reason order of Tribunal below is liable to be set aside.
On the other hand, advocate for first respondent bank submitted that in the pleadings of OA, bank specifically contended that both borrowers and the guarantor viz., defendants 1 to 3 are jointly and severally liable for claim amount of Rs.13,62,310.65p but in the relief portion claim is made against borrowers only, which is a mistake on the part of bank and that cannot be rectified at this stage. It is further submitted that for dismissal of claim against defendants 1 and 2, advice is already given for filing an appeal and it is under process.
I have perused material papers and impugned order dated 23.7.2015. I have also perused copy of OA, which is filed along with Memorandum of Appeal. In the relief portion of OA, bank specifically prayed in following lines.
“(a) Pass an Order in favour of the applicant directing the first and second defendants personally to pay the applicant, the application claim amount of Rs.13,62,310.65p (Rupees Thirteen lakh six two thousand three hundred ten and sixty five paise only) including current and future interest at the rate of 14.00% p.a. on 13,62,310.65p from the date of application till the date of realisation”
Therefore, very request of bank is to grant a recovery certificate against defendants 1 and 2 only for Rs.13,62,310.65p and no relief is claimed against appellant herein. As seen from the impugned order, Tribunal below appear to have passed such order on the basis of pleadings of R2 & R3 i.e., borrowers. But no counter claim is made by borrowers. On the basis of pleadings of D1 & D2, liability cannot be fixed on a co-defendant i.e. D3, which is not prayed by applicant i.e. Bank. As rightly pointed out by advocate for appellant, bank left appellant herein for the reason that appellant paid Rs.55,94,091/-, for which, bank issued a letter discharging defendant No.3 from guarantorship and the very same fact is also pleaded by Defendant No.3 in the statement of objections filed to OA, specifically pleading that relief is claimed against defendants 1 and 2 only. It is also pleaded that defendant No.3 paid Rs.55,94,091/- and bank discharged 3rd defendant from guarantorship.
Considering these aspects, I am of the considered view that Tribunal below grossly erred in allowing OA against Defendant No.3 when bank itself has not prayed for such a relief.
For these reasons, impugned order dated 23.7.2015 is liable to be set aside. Accordingly, appeal, RA 153/2017 is allowed to the extent of Defendant No.3, with no order as to costs.
All pending IAs, if any, stand closed.