In addressing the above rival submission at the cost of
repeatation for better appreciation, it may be stated that the so called
cash credit facility holder, Madhusudan being dead, his liability towards
the so called cash credit facility as is said to have been availed by him
from the plaintiff-Bank is now sought to be fastened upon the defendant
assigning him in the position as that of a guarantor.
Undeniably, the plaintiff-Bank neither proved any loan
document i.e. promissory note, nor any such agreement for said cash
credit facility said to have been availed of by Madhusudan from the
plaintiff-Bank nor the agreement of the hypothecation being executed by
Madhusudan Pansari. The document which the bank has proved is the
statement of account certified under Banker’s Book of Evidence Act.
Thus the factum that Madhusudan had availed of any such cash credit
facility from the plaintiff-Bank has not been established. So when the
plaintiff-Bank has not proved the factum of lending of money by way of
cash credit facility to said Madhusudan, there arises no question of any
person coming to be saddled with the liability on that score merely
basing upon the statement of the account that too on being said as a
guarantor. There being no relationship of creditor and debtor between
the plaintiff-Bank and Madhusudan, the creation of relationship putting
a person in the position of a guarantor / surety does not arise. This
assignment of position of a guarantor to the defendant is based upon the
relationship between the person who has taken the cash credit facility
standing as the debtor which stands as the basic precondition so as to be
satisfied. Then only the question of the defendant standing as guarantor
as the surety in securing the payment of dues of the plaintiff- Bank
remaining unpaid by Madhusudan for its recovery on account of default
of Madhusudan would arise.
The law is quite well settled that mere statement of
account is not sufficient to charge the person of the liability unless of
course with the relationship first, the liability if on that score is accepted
by giving a nod to the correctness of the entry of account. This is not the
case here. In every such monetary transaction, the relationship between
the parties must be established first with the availment of the facility and
thereafter the accounts relating to the said transaction as between the
parties as maintained in due course of business when is proved would go
to determine the rights and liability of the parties to the transaction. The
statement of the account has been filed with the plaint. The correctness
of the same has been challenged with the denial of relationship between
the plaintiff-bank and Madhusudan and thereafter the position of this
defendant as assigned by the Bank as a guarantor. When it is stated in
the plaint that Madhusudan has executed a promissory note, no such
pro note has been proved in the case. P.W.1 on behalf of the Bank has
merely gone to depose that the bank record reveals about the advance of
cash credit facility to the extent of Rs.50,000/- to Madhusudan on
21.3.1971 according to his request. Evidence of P.W.1 being read with
the relevant pleading in the plaint, it is seen that the agreement of
hypothecation also is said to have been executed in the year 1976
whereas facility is said to have been so advanced on 21.3.78 which is one
year and four months after the execution of the so called agreement of
hypothecation. Those documents are not going to establish the
advancement of the cash credit facility to Madhusudan and about such
other documents, it has neither been spoken by P.W.1 nor those have
even been produced and proved in accordance with law. Said documents
have not seen the light of the day. The statement of account filed by the
bank containing the certificate as required under section 3 of the
Banker’s Book of Evidence Act undoubtedly raises a presumption with
regard to correctness of the statement of account until so rebutted by the
adversary. But the same itself is not taken as the document from which
the court can got to hold that the plaintiff-Bank’s case as regards the
advancement of cash credit facility to Madhusudan and the factum as
stated that the defendant stood as guarantor / surety for the same by
tendering the title deeds with the plaintiff-Bank in creating with
equitable mortgage for the purpose of repayment of loan in case of
default by mortgaged has been so established. Mere entry in the books of
account even though maintained therein the Bank in course of official
transaction and by those in due discharge of official duty cannot be
taken as enough and sufficient or the basis so as to fasten the liability
upon the (so called debtor) or a person sought to be proceeded with in
connection with said transactions and dues recoverable by the creditor
being arraigned as a guarantor as to have been given his property as
equitable mortgage through deposit of title deeds for recovery of said
outstanding dues due to default by the so called debtor and in the
absence of proof of any documents laying the foundations in creating the
relationship between parties.
HIGH COURT OF ORISSA: CUTTACK.
S.A. NO.240 of 1998
U.Co.Bank, Bolangir V Bipin Bihari Pansari
PRESENT:
SHRI JUSTICE D.DASH
Citation: AIR 2017 (NOC)776 Orissa
Print Page
repeatation for better appreciation, it may be stated that the so called
cash credit facility holder, Madhusudan being dead, his liability towards
the so called cash credit facility as is said to have been availed by him
from the plaintiff-Bank is now sought to be fastened upon the defendant
assigning him in the position as that of a guarantor.
Undeniably, the plaintiff-Bank neither proved any loan
document i.e. promissory note, nor any such agreement for said cash
credit facility said to have been availed of by Madhusudan from the
plaintiff-Bank nor the agreement of the hypothecation being executed by
Madhusudan Pansari. The document which the bank has proved is the
statement of account certified under Banker’s Book of Evidence Act.
Thus the factum that Madhusudan had availed of any such cash credit
facility from the plaintiff-Bank has not been established. So when the
plaintiff-Bank has not proved the factum of lending of money by way of
cash credit facility to said Madhusudan, there arises no question of any
person coming to be saddled with the liability on that score merely
basing upon the statement of the account that too on being said as a
guarantor. There being no relationship of creditor and debtor between
the plaintiff-Bank and Madhusudan, the creation of relationship putting
a person in the position of a guarantor / surety does not arise. This
assignment of position of a guarantor to the defendant is based upon the
relationship between the person who has taken the cash credit facility
standing as the debtor which stands as the basic precondition so as to be
satisfied. Then only the question of the defendant standing as guarantor
as the surety in securing the payment of dues of the plaintiff- Bank
remaining unpaid by Madhusudan for its recovery on account of default
of Madhusudan would arise.
The law is quite well settled that mere statement of
account is not sufficient to charge the person of the liability unless of
course with the relationship first, the liability if on that score is accepted
by giving a nod to the correctness of the entry of account. This is not the
case here. In every such monetary transaction, the relationship between
the parties must be established first with the availment of the facility and
thereafter the accounts relating to the said transaction as between the
parties as maintained in due course of business when is proved would go
to determine the rights and liability of the parties to the transaction. The
statement of the account has been filed with the plaint. The correctness
of the same has been challenged with the denial of relationship between
the plaintiff-bank and Madhusudan and thereafter the position of this
defendant as assigned by the Bank as a guarantor. When it is stated in
the plaint that Madhusudan has executed a promissory note, no such
pro note has been proved in the case. P.W.1 on behalf of the Bank has
merely gone to depose that the bank record reveals about the advance of
cash credit facility to the extent of Rs.50,000/- to Madhusudan on
21.3.1971 according to his request. Evidence of P.W.1 being read with
the relevant pleading in the plaint, it is seen that the agreement of
hypothecation also is said to have been executed in the year 1976
whereas facility is said to have been so advanced on 21.3.78 which is one
year and four months after the execution of the so called agreement of
hypothecation. Those documents are not going to establish the
advancement of the cash credit facility to Madhusudan and about such
other documents, it has neither been spoken by P.W.1 nor those have
even been produced and proved in accordance with law. Said documents
have not seen the light of the day. The statement of account filed by the
bank containing the certificate as required under section 3 of the
Banker’s Book of Evidence Act undoubtedly raises a presumption with
regard to correctness of the statement of account until so rebutted by the
adversary. But the same itself is not taken as the document from which
the court can got to hold that the plaintiff-Bank’s case as regards the
advancement of cash credit facility to Madhusudan and the factum as
stated that the defendant stood as guarantor / surety for the same by
tendering the title deeds with the plaintiff-Bank in creating with
equitable mortgage for the purpose of repayment of loan in case of
default by mortgaged has been so established. Mere entry in the books of
account even though maintained therein the Bank in course of official
transaction and by those in due discharge of official duty cannot be
taken as enough and sufficient or the basis so as to fasten the liability
upon the (so called debtor) or a person sought to be proceeded with in
connection with said transactions and dues recoverable by the creditor
being arraigned as a guarantor as to have been given his property as
equitable mortgage through deposit of title deeds for recovery of said
outstanding dues due to default by the so called debtor and in the
absence of proof of any documents laying the foundations in creating the
relationship between parties.
HIGH COURT OF ORISSA: CUTTACK.
S.A. NO.240 of 1998
U.Co.Bank, Bolangir V Bipin Bihari Pansari
PRESENT:
SHRI JUSTICE D.DASH
Citation: AIR 2017 (NOC)776 Orissa
