IN THE COURT OF PRINCIPAL CIVIL JUDGE (SENIOR
DIVISION), NARASARAOPET
Present: Smt A. Purnima,
Principal Civil Judge (Senior Division), Narasaraopet.
Friday, this the 13th day of DECEMBER, 2024.
A.S.No.164/2024
Between:- Syndicate Bank, Represented by the Branch Manager, Narasaraopet Branch, Guntur District.
...Appellant/Plaintiff
And
1. Chapparapu Subbaiah, S/o Venkateswarlu, Hindu, aged about 62 years, Cultivation, R/o Vellaturu, Bollapalli Mandal, Guntur District.
2. Narni Mallikharjuna Rao, S/o Venkateswarlu, Hindu, aged about 42 years, Cultivation, R/o Gogulapadu, Rompicherla Mandal, Guntur District.
3. M/s ICY City Cold Storage (P) Ltd., Rep. by its Managing Director, Motupalli Surendra Babu, having its cold storage unit at Kanamarlapudi, Savalyapuram Mandal, Guntur District.
…Respondents/Defendants
This appeal suit is filed against the Judgment and Decree dt.17.11.2017 passed in OS.No.77/2023 on the file of Prl. Civil Judge’s Court (Junior Division), Narasaraopet.
Between:- Syndicate Bank, Represented by the Branch Manager, Narasaraopet Branch, Guntur District. … Plaintiff
And
1. Chapparapu Subbaiah, S/o Venkateswarlu, Hindu, aged about 62 years, Cultivation, R/o Vellaturu, Bollapalli Mandal, Guntur District.
A.S.No.164/2024 // 2 //PCJ(SD), NRT
2. Narni Mallikharjuna Rao, S/o Venkateswarlu, Hindu, aged about 42 years, Cultivation, R/o Gogulapadu, Rompicherla Mandal, Guntur District.
3. M/s ICY City Cold Storage (P) Ltd., Rep. by its Managing Director, Motupalli Surendra Babu, having its cold storage unit at Kanamarlapudi, Savalyapuram Mandal, Guntur District. … Defendants
This Appeal suit came before me on 20.11.2024 for final hearing in the presence of Sri N. Lakshmi Narayana, Advocate for the Appellant and Sri B. Suresh, Advocate for the Respondent No.2, the Respondent No.1 remained exparte and the suit against the Respondent No.3 dismissed, upon hearing on both sides, considering the material on record, having stood over for consideration till this day and this Court delivered the following:
JUDGMENT // //
1.The appellant herein is the plaintiff and the respondents herein are the defendants in the said suit. The parties herein after referred as they arrayed before the trial Court for the sake of better understanding and appreciation.
2.The plaintiff being Syndicate Bank represented by its
Branch Manager, Narasaraopet Branch filed suit for recovery of loan amount with subsequent interest at 14% p.a. with half yearly rests and also for costs.
3.The pleadings of the plaint in brief are that:-
(i)The 1st defendant approached the plaintiff’s bank by representing that he stored his agricultural produce i.e., 162 bags of chillies weighing about 72.90 quintals in all in the cold storage unit of the 3rd defendant covered by the storage bonds bearing No.253 and 1185 which was issued by the 3rd defendant on 26.05.2010 in the name of the 1st defendant and sought for a loan amount of Rs.1,90,000/- (Rupees One Lakh and Ninety Thousand Only). The 3rd defendant was also confirmed the said storage of chillies and also issued storage bond.
A.S.No.164/2024 // 3 //PCJ(SD), NRT
The plaintiff’s Bank believed the representations of the defendants
No.1 and 3 and agreed to sanction for a sum of Rs.1,90,000/- (Rupees
One Lakh and Ninety Thousand Only) against the pledge of the said stock of 72.90 quintals of chillies. The 1st defendant got issued letter of delivery of storage bonds on 14.06.2010. The 3rd defendant was also gave undertaking to deliver the agricultural produce to the plaintiff’s bank or to their nominee and also stood as guarantor for due repayment of the loan amount.
(ii)The 1st defendant along with the 3rd defendant were entered into tripartite pledge agreement with the plaintiff’s Bank on 14.06.2010. There was also agreement between the parties that the loan amount shall carry interest at minimum amount of 10% compounded periodically besides over due interest at 2%. The present rate of interest is 14.5% compounded half yearly rests. The 2nd defendant stood as guarantor to the 1st defendant and executed guarantee agreement in favour of the plaintiff’s Bank on 14.06.2010.
The 1st defendant availed entire loan amount by executing all necessary documents and the loan amount was deposited in the savings bank account of the 1st defendant. The 1st defendant committed default in repayment of the amount.
(iii)The 3rd defendant failed to produce the stored produce covered by the storage bonds issued by them though the plaintiff’s
Bank demanded the 3rd defendant. The defendants No.1 and 3 were colluded with each other in order to cause wrongful loss to the plaintiff’s
Bank. The defendants No.2 and 3 stood as guarantors. Therefore, their liability is co-extensive with that of the 1st defendant. The defendants No.1 to 3 are jointly and severally are liable to repay the loan amount. The defendants failed to repay the loan amount.
Therefore, the plaintiff’s Bank got issued legal notice to the defendants on 27.04.2013. The notice served to the 1st defendant, but unserved to the defendants No.2 and 3. The originals of the produce storage bonds bearing No.253 and 1185 issued by the 3rd defendant were seized by
A.S.No.164/2024 // 4 //PCJ(SD), NRT
the vigilance department for enquiry. Therefore, the originals will be produced during the time of trial. Hence the suit.
4(i).The 3rd defendant filed written statement and denied the pleadings of the plaint. Further stated that, the 3rd defendant does not know about the obtaining loan from the plaintiff’s Bank by the 1st defendant for a sum of Rs.1,90,000/- (Rupees One Lakh and Ninety
Thousand Only). Further stated that, the 1st defendant repaid the loan amount by cash to the plaintiff’s Bank and the same was revealed by the account copy also. Only interest is due by the 1st defendant and the 1st defendant has to pay the interest. The plaintiff’s Bank sanctioned the loan against the pledge of the stock of the chillies, which are kept in the safe custody of the 3rd defendant cold storage and against the bonds that were issued by the 3rd defendant. Therefore, the plaintiff’s Bank ought to have filed suit for mortgage. If the defendants failed to repay the debt as stated by the plaintiffs Bank, it is option left over to the plaintiff’s Bank to proceed against the property which is in the custody of the 3rd defendant’s cold storage. The plaintiff’s Bank is not claimed the interest properly. The burden and liability is on the 1st defendant and he has to repay the loan amount to the plaintiff’s Bank as the plaintiff’s Bank sanctioned loan to the 1st defendant. The 3rd defendant’s cold storage never stood as guarantor to the defendant No.1. The 3rd defendant never executed any guarantee agreement in favour of the plaintiff’s Bank.
(ii)Further stated that, the then Manager of plaintiff’s Bank,
Telaprolu Srinivasarao, Gurram Srinivasarao, Devineni Edukondalu,
Mothupalli Haribabu, Shaik Basha and Hanumantharao were colluded with each other and manipulated things and obtained signatures of the 3rd defendant on some papers and availed several loans in the name of several agriculturists, such as 1st defendant. The plaintiff’s Bank was also filed several cases before the Debt Recovery Tribunal,
Visakhapatnam and the said Tribunal dismissed the cases. Besides that, the plaintiff’s Bank was filed other 11 cases against the 3rd defendant and others on the file of Prl. Civil Judge’s Court (Senior
A.S.No.164/2024 // 5 //PCJ(SD), NRT
Division), Narasaraopet for recovery of amount. Out of that, four suits were dismissed against the 3rd defendant and seven suits were decreed. The 3rd defendant was also preferred appeals and the same are pending. Moreover, the documents filed by the plaintiffs are copies, but not originals. There is no original stamp or seal of the 3rd defendant’s company on the documents filed by the plaintiff’s Bank.
The plaintiff’s Bank verified the signatures of the 3rd defendant and filed the suit. Hence prays to dismiss the suit with costs.
5.Basing on the pleadings and documents, the following
Issues are framed on 01.06.2017 by the trial Court for the purpose of trial:-
1. Whether the alleged tripartite agreement
dt.14.06.2010 and agreement of guarantee are
true, valid and binding on the 3 rd defendant?
2. To what relief?
6.During the course of trial, the Branch Manager of the plaintiff’s Bank by name Pinnamaneni Sivannarayana filed his chief examination affidavit as P.W.1 and exhibited 13 documents which are marked as Exs.A1 to A13. The Exs.A14 to A16 are marked through the cross-examination of D.W.1. Again one K. Sekhar Babu, Branch
Manager of the plaintiff’s Bank got examined as P.W.1. The manager,
Inspection Department of the plaintiff’s Bank regional Inspector,
Secunderabad got examined as P.W.2.
After closure of the plaintiffs side evidence, the Managing director of the 3rd defendant’s cold storage got examined as D.W.1 and exhibited one document which is marked as Ex.B1.
7.After going through the entire evidence placed by the both parties and having heard the arguments submitted by the learned counsels on both sides, the learned trial Court dismissed the suit with costs with an observation that, the plaintiff did not get any guarantee of agreement from the 3rd defendant and the agreement of guarantee was
A.S.No.164/2024 // 6 //PCJ(SD), NRT
not signed by the 3rd defendant and moreover, in the absence of original signatures of the defendants No.2 and 3, the tripartite agreement is not valid. Therefore, the plaintiff is not entitled for recovery of the suit amount.
8.Aggrieved by the Judgment and decree passed by the leaned trial Court, the unsuccessful plaintiff’s Bank preferred appeal against the Judgment and decree passed by the learned trial Court on 17.11.2017 in OS.No.77/2013 so as to set aside the Judgment and decree passed by the learned trial Court on the said date and to decree the suit in OS.No.77/2013 with costs.
The grounds of the appeal in brief are that:-
The Judgment and decree passed by the trial Court is contrary to law, weight of evidence and probabilities of the case. The trial Court committed grave error in dismissing the suit against the defendants more particularly against the defendants No.1 and 2. The trial Court failed to give any reasons for dismissing the suit against the defendants
No.1 and 2. The tripartite pledged agreement marked as Ex.A4 was actually approved by the 3rd defendant and as such the trial Court should not dismissed the suit. The observation of the trial Court that, the signatures of the 3rd defendant was obtained on unfilled form and later on filled up the columns in Ex.A2 is totally incorrect. The observation of the trial Court about the execution of the document by the defendants No.2 and 3 under Exs.A2 and A4 is incorrect. Hence prays to allow the appeal suit and set aside the Judgment and decree dt.17.11.2017 in OS.No.77/2013 on the file of Prl. Civil Judge’s Court (Junior Division), Narasaraopet and decree the suit with costs.
9.No oral or documentary evidence adduced on either side for this appeal suit purpose. The learned counsel for the appellant did not choose to advance arguments inspite of conditional order also therefore, the arguments on appellant side was closed on 03.10.2024.
The learned counsel for the respondents No.2 also did not choose to submit arguments on behalf of the respondent No.2 inspite of
A.S.No.164/2024 // 7 //PCJ(SD), NRT
conditional order also. Therefore, the respondent No.2 remained exparte on 20.11.2024.
10.Heard both sides.
11.Now the points for consideration are that :-
1. Whether the Judgment and decree passed on
17.11.2017 in O.S.No.77/2013 by the learned
Prl. Civil Judge’s Court (Junior Division),
Narasaraopet is liable to be set aside as prayed for by the appellant/plaintiff?
2. To What relief?
Point No.1:
Whether the Judgment and decree passed on
17.11.2017 in O.S.No.77/2013 by the learned Prl. Civil
Judge’s Court (Junior Division), Narasaraopet is liable to
be set aside as prayed for by the appellant/plaintiff?
12.As seen from the pleadings of the plaint, it can be said without any hesitation that, there is no clarity from the pleadings of the plaint that how much amount paid by the 1st defendant out of loan amount availed by him from the plaintiff’s Bank. The plaintiff’s Bank pleaded that, they sanctioned the loan amount of Rs.1,90,000/- (Rupees One Lakh and Ninety Thousand Only) against the storage bond issued by the 3rd defendant in respect of the red chilli stored by the 1st defendant in the 3rd defendant’s cold storage and the defendants
No.1 to 3 were executed all necessary documents in favour of the plaintiff’s Bank. After that only the plaintiff’s Bank sanctioned an amount of Rs.1,90,000/- (Rupees One Lakh and Ninety Thousand Only) to the 1st defendant and the same was deposited in the savings bank account of the 1st defendant under SB Account No.221/23370.
13.Further pleaded that, the plaintiff’s Bank was also opened an account for the loan account of the 1st defendant under loan account
No.32788370000649. The plaintiff’s Bank filed the certified copy of loan account statement which is marked as Ex.A11. As seen the
Ex.A11, an amount of Rs.91,270-15 ps. mentioned manually as on
A.S.No.164/2024 // 8 //PCJ(SD), NRT
31.05.2013, but there is no clarity from the pleadings that how much amount has to be paid by the 1st defendant out of the total loan amount of Rs.1,90,000/- (Rupees One Lakh and Ninety Thousand Only). So, there is no clarity from the pleadings of the plant that, how much amount repaid by the 1st defendant out of the total loan amount of
Rs.1,90,000/- (Rupees One Lakh and Ninety Thousand Only) and whether the 1st defendant has due of Rs.91,270-15 ps. or not. The prayer of the plaintiff’s Bank in Para No.15 is that, to pass the decree against the defendants jointly and severally for the suit amount and the suit amount is mentioned like Rs.91,270-15 Ps. Then there must be clarity from the pleadings of the plaint that the remaining amount paid by the 1st defendant or if they proceeded against the stock pledged by the 1st defendant in the 3rd defendant’s cold storage or not.
14.As seen the legal notice issued by the plaintiff’s Bank to the defendants No.1 to 3 on 27.04.2013 shows that, the plaintiff’s Bank issued legal notice to the defendants No.1 to 3 by demanding them to repay the due loan amount of Rs.88,796/- (Rupees Eighty Eight
Thousand Seven Hundred and Ninety Six Only) as on 31.03.2013. So, it appears that, the 1st defendant was already paid some amount to the plaintiff’s Bank, but the details of the amount paid by the 1st defendant is not mentioned by the plaintiff’s Bank in the pleadings. Further, there is no clarity whether the plaintiff’s Bank proceeded against the stock stored by the 1st defendant in the 3rd defendant’s cold storage against the storage bond executed by the defendants No.1 to 3 under Exs.A12 and A13.
15.The specific contention of the 3rd defendant is that, the signatures containing by the Exs.A12 and A13 are does not belongs to them and the same was forged by the plaintiff’s Bank. The managing director of the 3rd defendant’s cold storage got examined as D.W.1 and he deposed during the course of cross-examination that, the 1st defendant stored his produce in the 3rd defendant’s cold storage under
Exs.A11 to A13 and they issued documents under Exs.A11 to A13 to the 1st defendant, but his specific contention is that, he never gave any
A.S.No.164/2024 // 9 //PCJ(SD), NRT
letter to the plaintiff’s Bank under Exs.A2 and A3. The Exs.A2 and A3 are the finance against the storage receipts/bonds dt.14.06.2010.
D.W.1 deposed that the Ex.A3 does not bear their stamp, but as seen the Ex.A3, there is a stamp of the 3rd defendant’s cold storage in bottom of the page.
16.So, when the plaintiff’s Bank sanctioned loan basing on the stock stored by the 1st defendant, then the plaintiff’s Bank ought to have proceed against the stock if the 1st defendant failed to repay the entire loan amount. As per the contents of Ex.A11, the 1st defendant has to repay the loan amount within 12 months. As seen the Ex.A11, the loan amount sanctioned to the 1st defendant on 14.06.2010, so the 1st defendant has to repay the entire loan amount on or before 14.06.2011.
Whereas the accounts statement under Ex.A11 shows that, there was some payments upto 06.05.2013. The plaintiff’s Bank filed the present suit on 01.06.2013. So, if the 1st defendant failed to repay the amount within one year, then the plaintiff’s Bank is having right to proceed against the stock stored by him in the 3rd defendant’s cold storage, but there is no such steps taken by the plaintiff’s Bank immediate after completion of the validity period and nothing is pleaded by the plaintiff’s
Bank in the pleadings that what about the stock stored by the 1st defendant in the 3rd defendant’s cold storage and what are the hurdles to them to proceed against the stock of red chilli.
17.P.W.2 deposed that they tried to recover the amount within one year by demanding through phone, but the defaulter did not turn up. They inspected the stock in the cold storage till the year 2011, he is not filed any record to show that they inspected regularly, they did not obtain any separate agreement of guarantee from the 3rd defendant.
P.W.2 further deposed that, the Ex.A4 is the Photostat copy and it does not bear the original seal of 3rd defendant and signature of the 3rd defendant. As seen the Ex.A4 which is the tripartite pledge agreement dt.14.06.2010, the same is copy of document and original document is not filed by the plaintiff’s Bank. To that effect, the plaintiff’s Bank pleaded that, the original produce storage bonds bearing No.253 and
A.S.No.164/2024 // 10 //PCJ(SD), NRT
1185 dt.26.05.2010 issued by the 3rd defendant were seized by the vigilance department of the bank for the purpose of enquiry. But there is no mention about the original of Ex.A4 in the pleadings. Therefore, what about the original tripartite agreement which is marked as Ex.A4 has to be proved by the plaintiff’s Bank, but there is no such steps.
Though the plaintiff’s Bank sanctioned loan amount of Rs.1,90,000/- (Rupees One Lakh and Ninety Thousand Only) to the 1st defendant, but he paid some amount, but whereas there is no clarity from the pleadings of the plaint that how much amount paid by the 1st defendant to the Bank except the Ex.A11.
18.Coming to the Ex.A4 which is the tripartite agreement which is disputing by the Managing Director of 3rd defendant’s cold storage who got examined as D.W.1 that, the same is Photostat copy and he never subscribed his signature in the tripartite agreement dt.14.06.2010.
The D.W.1 specifically pleaded in Para No.11 of the written statement that the Bank authorities forged his signatures and filed the suit. During the course of cross-examination of P.W.2 who worked as Branch
Manager of the plaintiff’s Bank by that time deposed that the Ex.A4 is
Photostat copy and also deposed that, it does not bear the original seal of 3rd defendant and it does not bear the signature of the 3rd defendant.
But P.W.2 deposed that, the 3rd defendant executed tripartite agreement and they have not obtained any separate agreement of guarantee from the 3rd defendant. When the stock stored by the 1st defendant in the 3rd defendant’s cold storage, then it is for the authorities of the plaintiff’s
Bank to take all possible steps with caution and they have to maintain the original documents so as to fix the liability on the 3rd defendant’s cold storage.
19.As seen the Ex.A4/Tripartite Pledge Agreement dt.14.06.2010, the signature of the 3rd defendant containing by the original of Ex.A4 is not original signature. In such circumstances, the plaintiff’s Bank is not entitled to fix the joint liability on the 3rd defendant so as to pay the remaining loan amount. Further, there are no pleadings or evidence placed by the plaintiff’s Bank so as to prove that,
A.S.No.164/2024 // 11 //PCJ(SD), NRT
is there any damage occurred to the crop stored by the 1st defendant and whether the same was in a good condition as on the date of visit of the employees of the plaintiff’s Bank, if so, why the plaintiff’s Bank did not take steps so as to auction the crop stored by the 1st defendant in the 3rd defendant’s cold storage. So, when the 3rd defendant is disputing about the Ex.A4 which is the primary document so as to fix the joint liability on the 3rd defendant and the plaintiff’s Bank is also not take sufficient steps so as to prove the contents of the Ex.A4, then the plaintiff’s Bank is not entitled to recover the suit amount by proceeding against the 3rd defendant’s cold storage. The agreement of guarantee which is marked as Ex.A5 got executed by the 2nd defendant in favour of the plaintiff’s Bank and he stood as guarantor for the loan amount sanctioned to the 1st defendant by the plaintiff’s Bank. But the 2nd defendant remained exparte and did not choose to contest the suit proceedings.
20.However, when the 1st defendant stored the crop and availed loan basing on the, crop stored by him in the 3rd defendant’s cold storage, then it is option left over to the plaintiff’s Bank to proceed against the crop stored by him by following due procedure. But there are no such steps taken by the plaintiff’s Bank and filed this suit for recovery of remaining loan amount of Rs.91,270-15 ps., but there is no pleadings and evidence that how much amount paid by the 1st defendant except Ex.A11/statement of account of the 1st defendant prepared by the plaintiff’s Bank. So when there is no clarity in respect of the stock stored by the 1st defendant in 3rd defendant’s cold storage, then the plaintiff’s Bank is not entitled to file suit in a vague manner without clarifying the things.
21.The learned trial Court was also discussed about the Ex.A4 which is tripartite agreement that, the signature and seal of the 3rd defendant appears on Ex.A4 is not original one, then it is for the plaintiff’s Bank so as to take steps to prove that, the signatures on
Ex.A4 are original signatures of the D.W.1 who is the managing Director of 3rd defendant’s cold storage. The learned trial Court was also
A.S.No.164/2024 // 12 //PCJ(SD), NRT
discussed that the plaintiff’s Bank did not get any agreement of guarantee from the 3rd defendant and moreover the terms and conditions mentioned in Ex.A13 and A14 are not fixing any liability on the 3rd defendant’s cold storage and also discussed about the validity of
Ex.A4. If the Ex.A4/tripartite agreement dt.14.06.2010 is valid and genuine one, then the authorities of the plaintiff’s Bank has to take steps to prove the same, but there are no such steps taken by the plaintiff’s
Bank. In such circumstances, the appeal suit filed by the plaintiff’s Bank is not maintainable and the plaintiff’s Bank is not entitled for decree as prayed for. So, after going through the findings of the learned trail
Court, this Court is of the opinion that, there is no necessity to interfere with the Judgment and decree passed by the learned trial Court in
OS.No.77/2013. Accordingly, this point is answered.
Point No.2:
To what relief?
22.In the result, this Appeal suit is dismissed without costs by confirming the Judgment and Decree dt.17.11.2017 passed in
OS.No.77/2013 on the file of Prl. Civil Judge’s Court (Junior Division),
Narasaraopet.
Dictated to the Stenographer, Grade-III, transcribed by her,
corrected and pronounced by me in open Court, on this the 13th day of DECEMBER, 2024.
Sd/- A. Purnima,
Principal Civil Judge (Senior Division),
Narasaraopet.
Appendix of Evidence
- Nil - (No oral and documentary evidence adduced on both sides)
Sd/- A. Purnima,
P.C.J.(S.D.),
NRT.
Fair Judgment
in A .S. No.164/2024