Oriental Bank Of Commerce vs Prakashwati And Ors.

Ranjit Singh, J

These two appeals noted above are directed against the order dated 13 July, 2010 passed by Debts Recovery Tribunal-1, Delhi in OA No. 603 of 1996 filed by the Oriental Bank of Commerce. In this case M/s. Brindavan Overseas Pvt. Ltd. and M/s. Seafin (P) Ltd. were granted packing credit facility against LC and FDBP facility against hypothecation of stocks and personal guarantees of defendants/respondents Smt. Parkash Wati, Shri Bhagwan Dass, Shri C. Ramakrishnan and Shri C.G. Vishwanath. The said respondents executed following documents in consideration thereof:

(i) Packing credit agreement dated 3.9.1993 by defendant No. 1.

(ii) Agreement for case credit overdrafts dated 3.8.1993 by defendant No. 1.

(iii) Agreement regarding Bill purchase/Bill discounted and advance against Bill of collection dated 3.8.1993 by defendant No. 1.

(iv) Agreement of guarantee dated 3.9.1993 by defendant No. 2.

(v) Agreement of guarantee dated 3.9.1993 by defendant No. 3.

(vi) Agreement of guarantee dated 3.9.1993 by defendant No. 4.

(vii) Agreement of guarantee dated 3.9.1993 by defendant No. 5.

(viii) Agreement of guarantee dated 3.9.1993 by defendant No. 6.

Smt. Parkash Wati had also executed a memoranda of deposit of title deed dated 3.8.1993 and by depositing the original sale deed in respect of land measuring 4 bigas 16 biswas comprised in Khasra No. 36/23, village Najafgarh, Delhi had created an equitable mortgage in favour of the appellant Bank.

M/s. Brindavan Overseas Pvt. Ltd. had availed Rs. 10 lacs on March 16, 1993 but failed to submit the bills within the stipulated period for negotiation in terms of the sanction despite extension of period of negotiation. The buyer vide letter dated December 3, 1993 refused to extend the period. M/s. Brindavan Overseas Pvt. Ltd. informed the Bank that the foreign buyer had agreed to reduce the entire amount of packing credit advance to them against the order along with interest. A cheque of Rs. 1.25 lacs in favour of M/s. Brindavan Overseas Pvt. Ltd. was also sent with a request letter that the amount be credited in their current account. This cheque was dishonoured. The respondent concern was then called upon to liquidate the amount and the limits sanctioned were cancelled in December 1993.

In April 1994, the defendant got submitted the bills for US dollars 42,450 (Rupees 1357 lacs) drawn on M/s. Thrin Building Material, Dubai which were purchased by the overseas branch of the appellant Bank and the proceeds were credited to the overdraft amount of the M/s. Brindaban Overseas in Gurgaon branch. The bill remained unaccepted for a long period and the amount was remitted to the overseas branch of the appellant Bank by Gurgaon branch.

M/s. Brindaban Overseas then got permission from the ECGC and the Reserve Bank of India to re-sell the goods to an alternate buyer in UAE. Photocopies of documents in the name of changed consignee were prescribed to the Bank. Photocopies being not clear were not receipted and were returned. The Bank repeatedly demanded the dues from the respondents. OA was filed when the repeated demands by the appellant Bank to clear the dues failed to get response.

The OA was allowed against the respondents against which Smt. Parkash Wati and Shri Bhagwan Dass preferred an appeal before this Tribunal. This appeal was allowed on December 6, 2004 and the final order passed by the Tribunal dated 26th December, 2001 relating to the said respondents was remitted back to the DRT for fresh disposal in terms of the observations contained in the order passed by this Tribunal. The final order against the remaining respondents was allowed to stand as it is and the case was taken up for fresh inquiry so far as the liability of respondents Smt. Parkash Wati and Shri Bhagwan Dass is concerned.

In its order dated 6th December, 2004, this Tribunal has noticed the contention of Smt. Parkash Wati that she was not even the owner of the property when the mortgage is alleged to have been created as she had sold the property to Jagdish on 30.3.1989. She states that question of creating mortgage would not arise. Plea of the Bank was that it was a fraudulent document, which was produced and the property stood in the name of respondent Smt. Parkash Wati. The finding of the Tribunal below which was under challenge was that Smt. Parkash Wati failed to prove that the property was sold by her to Shri Jagdish or it was mortgaged. The Tribunal was of the view that it was not necessary for the defendants in the OA to summon some body from the Registrar office to prove the certified copy of the sale deed executed in favour of Shri Jagdish. This Tribunal also observed that there was no need to examine Shri Jagdish to give evidence. The Tribunal has further observed the plea of the Bank was that fraud had been played in connivance with the then Bank Manager so the question of sale deed being in possession of the Bank would be of no significance. This Tribunal accordingly was, however, of the view that the Bank should be given an opportunity to prove execution of the deeds of guarantee by the appellants (defendant Nos. 3 and 4 in the OA) and also to prove memo of deposit of title deed. The Bank was given liberty to move an appropriate application for the purpose of examination and comparison of the disputed signatures and thumb impressions and accordingly the case was remitted back to the Tribunal below for further adjudication in the matter. The OA went back to the Tribunal below for adjudication in this background.

This time, the Tribunal below has come to the conclusion that the thumb impressions of Smt. Parkashwati and signatures of Shri Bhagwan Dass are not proved on the documents allegedly executed by them. The Tribunal, now, has accordingly modified the earlier finding recorded by it and has corrected the finding to read that the claim be allowed against defendant Nos. 1, 2, 5 and 6, and the OA qua defendant Nos. 3 and 4 would stand dismissed. The recovery certificate was accordingly modified.

I Aggrieved against the above part of the order, the Bank as well as respondents C. Ramakrishna & Ors. have filed these appeals against the impugned order to this limited extent.

The grievance raised in the appeal filed by the Bank is that thumb impressions and signatures of respondent Nos. 1 and 2 were taken in the office of the DRT on several occasions i.e. on 27.10.2005, 1.3.2006, 21.6.2006 and lastly on 14.11.2006. The signatures and thumb impressions taken on November 14, 2006 were sent to the office of CFSL, New Delhi under forwarding letter dated November 15, 2006 by the Registrar of DRT-I, Delhi. The CFSL had submitted its report dated March 22, 2007 making reference to the thumb impression of said respondent received on 17.8.2006. As per the Counsel appearing for the Bank, it means that the signatures and thumb impressions taken on November 14, 2006 were not considered at all for the purpose of comparison. On this ground, objection was filed on behalf of the Bank against the CFSL report, prayer was made for summoning and for cross-examining the person who had prepared the report. The Presiding Officer had rejected the said application and has finally dismissed the OA against the said respondents. The Bank accordingly has impugned this judgment.

The Counsel for the appellant Bank would plead that as per Section 22 of RDDBFI Act the procedure envisaged by Civil Procedure Code does not strictly apply, but the substantive provisions cannot be given go-bye. The main ground of attack, however, remains that the thumb impressions and signatures which had to be taken repeated was on the ground that earlier signatures obtained were not found fit for the purpose of comparison. The Counsel for the appellant Bank would therefore be justified in raising a challenge to the judgment that this important aspect has escaped the notice of the Tribunal below.

It is not disputed before me that the signatures and thumb impressions of the respondents were taken on November 14, 2006, but these had not been utilized for the purpose of comparison. This being the issue raised by the Bank could either have been got clarified by permitting cross-examination of the person who had given this report and who could then offer the explanation as to why the signatures and thumb impressions obtained on November 14, 2006 were not used for the purpose of comparison or got it clarified in an appropriate manner, if permissible. The request of the Bank for cross-examination was declined which, in my considered view, has led to serious prejudice to the case of the appellant. One may have to take notice of the fact that earlier the said respondents were held liable and it was the objection of the Bank in regard to the issue raised in the appeal that the case was remanded back to the Tribunal below for fresh adjudication qua the role of respondents Smt. Parkash Wati and Shri Bhagwan Dass. The Tribunal below in its earlier order dated December 26, 2001 had made certain telling observations about the quality of deposition and worth of defendant Nos. 3 and 4 in the OA as witness. The stand of the said defendants in the OA was that they had not signed the guarantee agreements. Defendant No. 4 has disputed his thumb impression on the guarantee agreement as well. Against this, the witnesses of the Bank had categorically deposed that these guarantee agreements were executed by defendant Nos. 3 and 4 in their presence. The Tribunal below while disposing of the OA was of the view that the testimony of Smt. Parkash Wati (defendant No. 3) and Bhagwan Dass (defendant No. 4) was not reliable. It is also noticed that their testimony got completely shaken in their cross-examination Referring to the evidence given by defendant No. 3, the Tribunal had noticed that she deposed that she cannot say as to whether the affidavit dated 27.3.1998 contained her signatures or not. It was observed that she had given a parrot like reply that she did not sign any document except one sale deed about 10 to 12 years ago. This witness had claimed herself to be an illiterate person, but her affidavit contained her signatures. She had admitted that she knew how to sign while under cross-examination. The Tribunal accordingly had observed that her statement in cross-examination clearly showed that she was not a truthful and trustworthy witness and her evidence as contained in the affidavit could not be given any weightage. The Tribunal had also referred to the cross-examination of defendant No. 4 who admitted that some time he used to append his thumb impressions on documents. In cross-examination, he had deposed that generally he puts his signatures on documents but some time even put his thumb impression. As per defendant No. 4. Ex. P6 did not contain his thumb impression. He, however, did not lead any evidence to show that the thumb impression appearing on Ex. P6 is not his thumb impression. The Tribunal accordingly found that the document which was once proved by the Bank witness, burden to prove that this document did not contain his thumb impression was on the said defendant. He was also termed as a witness, who was not trustworthy and reliable. His answer that neither he can admit nor deny that affidavit dated 23rd July, 1998 bore signatures of his wife was referred to term his testimony as evasive. This witness also gave evasive reply on the point of attestation of the affidavit by the Oath Commissioner. The Tribunal below, thus, was of the view that both the witnesses had executed guarantee agreements. In this background, to ignore their deposition on the basis of expert evidence may not sound fair. The evidence given by the expert further got weakened because opportunity of cross-examination was denied to the Bank Counsel which may not sound, fair and reasonable. This Tribunal, however, considered this aspect and also the assertions made on behalf of the defendants before it and had remanded the case back to the Tribunal below giving a liberty to the Bank to prove execution of the deed of guarantee and also to prove memo of deposit of title. This Tribunal had also given liberty in the order to the Bank to file an appropriate application for the purpose of examination and comparison of the disputed signatures of defendant Nos. 3 and 4 and thumb impression of 4th defendant. Though the opportunity has now been provided for examination of the expert witness, but there are certain lurking doubts still remaining in the evidence, which is fed before the Tribunal which may need to be creased out. These defendants in OA have been exempted from their liability on the basis of evidence which suffers from infirmity as noticed above. It may also need notice here that earlier the tribunal had permitted the Counsel for the respondent to cross-examine the witnesses produced by the Bank, but now, the said Tribunal has disallowed the request of the Bank to cross-examine the witness who had given this opinion evidence. It may need a mention that opinion evidence is always a weak type of evidence and if there is some infirmity of the nature as alleged in this case, such evidence, which is basically opinion evidence, would further may get weakened Issue whether direct evidence would prevail or opinion evidence would need preference may also arise. In such circumstances, it would have been appropriate for the Tribunal below to permit cross-examine of this witness by the Bank so as to ascertain as to why initially thumb impressions and signatures had to be obtained repeatedly and why opinion was given without carrying out comparison with the signatures and thumb impressions which were obtained on November 14, 2006. The opinion expressed by the expert suffers from this serious flaw and, in my view the order impugned cannot be sustained. It is required to be set aside. The case will again have to go back to the Tribunal below which would this time summon the handwriting expert as a witness for the purpose of cross-examination by the Bank's Counsel to ascertain the reasons for which, the thumb impression and signature were required and obtained repeatedly and why those obtained on 14.11.2006 were not used. The grievance of the appellant in Appeal No. 386 of 2010 is that they were not afforded opportunity of hearing and were not permitted to participate though they were adversely affected by the order ultimately passed by the Tribunal below. It may be true that the Tribunal below had earlier remanded the OA only so far as the liability of respondent Nos. 3 and 4 is concerned. It is however seen that the remaining concerned respondents would also ultimately get affected by the order if any passed in regard to the liability of defendants 3 and 4 in the O.A. It may not, there-fore, be fair to deny them opportunity of hearing. The prayer made in this appeal is to rectify the order of the Tribunal whereby respondent Nos. 3 and 4 were discharged from their liability. Since the impugned order has been set aside and the case has been remanded back to the Tribunal below, the appellants in Appeal No. 386 of 2010 may also be heard.

Both the appeals are disposed of in the above terms. The parties through their Counsel are directed to appear before the Tribunal below on 14.7.2014.