Second Appeal No.142 of 1988

1st February, 2005

Petitioner Counsel: Mr. G. R. AGRAWAL
Respondent Counsel: Mr. A. S. CHANDURKAR

Cases Cited:
T. D. Gopalan Vs. The Commissioner of Hindu Religious and Charitable Endowments, Madras, AIR 1972 SC 1716 [Para 9]
Santosh Hazari Vs. Purushottam Tiwari (Deceased) by LRs., (2001)3 SCC 179 [Para 9]
Madhukar Vs. Sangram, (2001)4 SCC 756 [Para 9]
Arumugham (Dead) by LRs. Vs. Sundarambal, 1999(3) ALL MR 471 (S.C.)=(1999)4 SCC 350 [Para 10]
Shrinarayan Rambilas Vs. Bhaskar Waman, AIR 1954 Nagpur 193(a) [Para 12]
Dhirendera Nath Sen and others Vs. Smt. Santasila Debi, AIR 1969 Calcutta 406 [Para 12]
Vasant Deorao Deshpande Vs. State Bank of India, 1996(1) Mh.L.J. 914 (DB) [Para 12]
Lallan Prasad Vs. Rahmat Ali, AIR 1967 SC 1322 [Para 13]
Smt. Aratibala Mohanty Vs. State Bank of India [Para 13]

JUDGMENT

JUDGMENT :- The Appellant-original defendant No.1 (hereinafter referred to as the 'Bank') preferred this appeal against the judgment of the District Judge, Yavatmal in Regular Civil Appeal No.112 of 1985 decided on 30th March, 1988 directing the Bank to return the gold ornaments to the respondents i.e. original plaintiff Nos.1 to 3 and defendant No.2 (hereinafter referred to as the 'plaintiffs') on payment of the principal amount with interest for three months namely June, 1982 to August, 1982 by setting aside the judgment of the Civil Judge, Junior Division, Wani dismissing Regular Civil Suit No.168 of 1983 on 27th March, 1985.

2. For the purposes of this second appeal the facts which are not in dispute are that on 14-4-1979 one Gopalrao Deshmukh obtained loan from the Bank by pledging gold ornaments. Account Nos.27/18 and 27/19 were operated. On the same day Gopalrao Deshmukh gave a declaration in writing (Exh.21) that the gold ornaments belonged to him and no other person has any claim against them. On 14-7-1979 Gopalrao Deshmukh also executed a promissory note in favour of the Bank as a security for the loan. On 8-2-1982 Gopalrao Deshmukh died leaving behind him his widow (plaintiff No.1), son (plaintiff No.2) and daughters (plaintiff No.3 and defendant No.2).

3. After the death of Gopalrao Deshmukh, his widow through her son enquired with the Bank about the amount of outstanding loan against her deceased husband. On 4-8-1982 and 11-8-1982 the Bank gave particulars of the gold loan and crop loan amounting to Rs.34,031.37 ps. including interest up to 31-5-1982. The plaintiffs showed willingness to repay the loan and to redeem the ornaments. However the Bank insisted for submission of "Letters of Administration". Hence on 28-9-1983 suit for mandatory injunction was instituted against the Bank requiring the Bank to accept the amount of loan advanced with interest as on 31-8-1982 and to deliver the gold ornaments to any of the plaintiffs.

4. The Bank resisted the claim. According to the Bank it recognizes the right of the plaintiffs to redeem the gold ornaments provided they prove their right to the ornaments. Since the plaintiffs did not produce any documentary evidence about their right to redeem the ornaments, the Bank refused to return the ornaments to the plaintiffs. According to the Bank the suit is liable to be dismissed.

5. The learned Trial Judge framed necessary issues and after considering the oral and documentary evidence adduced by the parties, the learned Trial Judge held that the plaintiffs proved that the pledged ornaments were the property of the co-parcenary. The learned Trial Judge, however, held that "Letters of Administration" were necessary for claiming the ornaments and in the absence of "Letters of Administration" the plaintiffs were not entitled for return of the gold ornaments. The learned Trial Judge, therefore, dismissed the suit.

6. While deciding the appeal preferred by the plaintiffs the appellate court held that the "Letters of Administration" were not necessary for claiming back the gold ornaments. The appellate court allowed the appeal, set aside the judgment of the trial court and directed the Bank to return the ornaments on payment of loan and interest to the plaintiffs or any person authorised by them on execution of his security bond to the satisfaction of the Bank.

7. The Bank preferred Second Appeal No.88 of 1987 against the judgment of the appellate court. By judgment dated 20-8-1987 this Court allowed the appeal, set aside the judgment of the appellate court and remanded the case to the appellate court directing it to decide the appeal by mentioning the amount of loan, the rate of interest, the period for which interest is payable and the quantum of interest to be paid by the plaintiffs.

8. After remand the appellate court by its judgment dated 30-3-1988 allowed the appeal and held that "Letters of Administration" were not necessary and directed the Bank to return the ornaments to the plaintiffs or any person authorised by them on payment of principal amount of Rs.22,283.14 ps. plus interest at the rate of 13.50 per cent per annum for three months namely June,1982 to August,1982 on execution of security bond to the satisfaction of the Bank. The Bank has again challenged this judgment by this Second Appeal.

9. Mr. Agrawal, the learned counsel for the appellant Bank, submitted that the trial court held that the production of the "Letters of Administration" by the plaintiffs was necessary for claiming back the gold ornaments. The appellate court, however, held that the "Letters of Administration" were not at all necessary but while discussing this issue did not at all refer to the reasons given by the trial court. In the absence of non-discussion of the reasons of the trial court by the appellate court, the finding rendered by the appellate court suffers from perversity and needs to be set aside. In this respect Mr. Agrawal placed reliance on the following cases :

i) T. D. Gopalan Vs. The Commissioner of Hindu Religious and Charitable Endowments, Madras, AIR 1972 SC 1716, wherein the Apex Court observed as under :-

"The uniform practice in the matter of appreciation of evidence has been that if the trial court has given cogent and detailed reasons for not accepting the testimony of a witness, the appellate court in all fairness to it ought to deal with those reasons before proceeding to form a contrary opinion about accepting the testimony which has been rejected by the trial court.

ii) Santosh Hazari Vs. Purushottam Tiwari (Deceased) by LRs., (2001)3 SCC 179, wherein it is held that :

"The judgment of the appellate court must, therefore, reflect its conscious application of mind and record findings supported by reasons, on all the issues arising along with the contentions put-forth and pressed by the parties for decision of the appellate court.

While reversing a finding of fact the appellate court must come into close quarters with the reasoning assigned by the trial court and then assign its own reasons for arriving at a different finding. This would satisfy the court hearing a further appeal that the first appellate Court had discharged the duty expected of it."

iii) Madhukar and Ors. Vs. Sangram and Ors., (2001)4 SCC 756, wherein it is held as under :

"Sitting as a court of first appeal, it was the duty of the High Court to deal with all the issues and the evidence led by the parties before recording its findings.

.....the judgment in the first appeal must address itself to all the issues of law and fact and decide it by giving reasons in support of the findings."

10. Mr. Chandurkar, the learned counsel for the respondents, on the other hand, submitted that the appellate court has considered the reasons given by the trial court and also given its own reasons for reversing the finding of the trial court. Mr. Chandurkar further submitted that even in the absence of the appellate court discussing the reasons of the trial court can give its own reasons for differing from the trial court and in Second Appeal no interference can be made on that count. In this respect he relied on the following cases :

i) Arumugham (Dead) by LRs. & Ors. Vs. Sundarambal & Anr., (1999)4 SCC 350 : [1999(3) ALL MR 471 (S.C.)], wherein it is held as under :

"It is open to the first appellate court to consider the evidence adduced by the parties and give its own reasons for accepting the evidence on one side or rejecting the evidence on the other side. It is not permissible for the second appellate court to interfere with such findings of the first appellate court only on the ground that the first appellate court had not come to grips with the reasoning given by the trial court."

11. A perusal of the judgments of the appellate court show that though it has not discussed in details the reasons given by the trial court as regards necessity of "Letters of Administration", the appellate court has given its own reasons while reversing the findings of the trial court in this respect. As such it cannot be said that the appellate court failed to perform its duty.

12. Mr. Agrawal further submitted that the pawnor is entitled to redeem the property only on payment of the amount of loan with interest. It is only the actual tender of such amount that would stop running of the interest. Mr. Agrawal submitted that what is essential is actual payment of the amount and not merely an offer or willingness to pay. Mr. Agrawal submitted that the plaintiffs never issued notice to the Bank informing the Bank that they were ready to repay the loan due against the original debtor. Even while instituting the suit the plaintiffs did not deposit the amount due. Even during pendency of the suit the plaintiffs never made an application for permitting them to deposit the loan amount. Hence the appellate court was not justified in holding that the plaintiffs were liable to pay interest only for three months i.e. June,1982 to August,1982. Mr. Agrawal further submitted that even after the judgment of the appellate Court dated 30-3-1988 the plaintiffs have not deposited the loan amount. Hence the liability of the plaintiffs to pay interest for the entire period would continue. Mr. Agrawal also commented that the plaintiffs have not examined the son of plaintiff No.1 who had gone to enquire about the loan amount with the Bank. In the absence of his examination Mr. Agrawal submitted that there was no offer by the plaintiffs to pay the loan amount. Hence their liability to pay interest cannot be restricted only for three months. Mr. Agrawal relied on the following cases :

i) Shrinarayan Rambilas and Ors. Vs. Bhaskar Waman and Ors., AIR 1954 Nagpur 193(a), it is held as under :

"Interest does not cease on the giving of merely a notice unaccompanied by any actual tender of mortgage amount."

ii) Dhirendera Nath Sen and others Vs. Smt. Santasila Debi and others, AIR 1969 Calcutta 406, wherein the principles laid down by the authorities have been summarised as follows :

"1. Where a certain sum is payable and interest is payable thereon upon non-payment, a valid tender of the amount due will stop the further running of interest.

2. Such a tender to be valid must satisfy the following conditions :

(b) A tender must be unconditional, or at all events, free from any condition to which the creditor may rightfully object.

(c) The tender must be "kept good" that is to say the offer of payment must be a bona fide offer. The money due must be actually tendered and where interest is to be avoided the amount due should be set aside for payment and it must be shown that the tenderer was at all material times ready and willing to make the payment."

iii) Vasant Deorao Deshpande Vs. State Bank of India, 1996(1) Mh.L.J. 914 (DB), wherein it is held that :

"So long as there is no discharge of the liability by the defendant, he is not entitled to get back the gold ornaments. Further, so long as the liability is not discharged, he is liable to pay interest agreed to by him."

13. Mr. Chandurkar, the learned counsel for the respondents, on the other hand, submitted that it was not necessary to examine the son of plaintiff No.1 because the Bank in its pleading admitted that it was the son of plaintiff No.1 who came to enquire about the loan amount. Mr. Chandurkar further submitted that actually the Bank had transferred another loan account in the name of the plaintiffs and accepted amount therein. The plaintiffs had shown their readiness and willingness to repay the loan amount but since beginning the Bank insisted for submission of "Letters of Administration" by the plaintiffs which was, in fact, not necessary, particularly when the Bank had transferred another loan account of the deceased in the name of the plaintiffs. Mr. Chandurkar further submitted that it had become clear to the plaintiffs that even if they repay the loan amount, the Bank would not return gold ornaments unless they produce "Letters of Administration". In such circumstances no prudent man would repay the loan when there was no possibility of returning of the gold ornaments. Mr. Chandurkar submitted that insistence of the Bank for "Letters of Administration" was not proper and legal since beginning and in such circumstances the plaintiffs could not be blamed for not making actual payment of the loan amount. In this respect Mr. Chandurkar placed reliance on the following cases :

i) Lallan Prasad Vs. Rahmat Ali and Anr., AIR 1967 SC 1322, wherein it is held as under :

"If the pawnee is not in a position to redeliver the goods he cannot have both the payment of the debt and also the goods."

ii) Smt. Aratibala Mohanty Vs. State Bank of India & Ors., AIR 1991 Orissa 260, in which it is held as under:

"Where the Bank as the pawnee was not in a position to deliver back the goods on account of the seizure made by the police. The Bank as the pawnee having refused to perform its obligation of re-delivering the goods on debts being satisfied cannot claim any interest from the date on which the petitioner wanted release of the goods pledged by satisfying the debt."

14. It may be seen that the circumstances of the case show that there was reasonable apprehension in the mind of the plaintiffs that even if they were to pay whole of the loan with interest gold ornaments would not be returned to them. In such circumstances they were justified in not making actual payment of loan amount. The appellate court was justified in holding that the liability of the plaintiffs to pay interest would stop after August, 1982. I find no illegality in the conclusion drawn by the appellant Court.

15. In the result, I find no merit in the appeal. The same is, therefore, dismissed with costs.

Appeal dismissed.