INDIAN BANK Vs. K NATARAJA PILLAI

JUDGEMENT

(1.) This appeal by grant of special leave is directed against the judgment of Madras High court dated 25/11/1980.

(2.) The appellant Indian Bank (in short 'the Bank') filed a suit for the recovery of an amount of Rs. 1,21,006.98 due under an equitable mortgage and pronote against three defendants namely, K. Nataraja Pillai (defendant 1, his wife N. Pappathi -Ammal (defendant 2 and his son N. Narayanan (defendant 3. According to the Bank, the defendants 1 to 3 executed a promissory note for Rs. 1,00,000. 00 on 26/08/1971 in favour of the Bank. They also executed two hypothecation deeds in respect of 'a' schedule properties and executed an equitable mortgage on 28/08/1971 for 'b' schedule properties. The consideration for the aforesaid transaction alsoincluded an amount of Rs. 71,000. 00 granted by the Bank in favour of 37 persons by way of short term loans. The defendant 1 had executed a guarantee agreement on 14/06/1971 in favour of the Bank in respect of the aforesaid short term loan in favour of 37 persons. The Bank had thus based its claim in the plaint on the promissory note and guarantee agreement for Rs. 1,00,000. 00 as principal and Rs. 21,006.98 as interest.

(3.) The first defendant filed a written statement denying the execution of guarantee agreement as well as the promissory note. He pleaded inter alia that the defendants had not furnished any guarantee on 14/06/1971 with regard to the repayment of loans amounting to Rs. 71,000. 00 to 37 persons. The defendants had not executed any promissory note in favour of the Bank for a lakh of rupees nor had executed any equitable mortgage nor deposited any documents of title towards any loan of Rs. 1,00,000. 00. The defendant 1 also pleaded that the agent of the Bank Shri Krishnamurthy iyer in order to ward off his own prosecution and arrest for having advanced large amounts as loans to landless persons in an irregular manner obtained the signature of the defendants on a printed promissory note without the details having been filled up. The documents were got executed by exercise of fraud, undue influence, coercion and misrepresentation. The defendants 2 and 3 filed a separate written statement and took the same stand as taken by the defendant 1. The third defendant subsequently filed a separate additional written statement taking the ground that he was born on 12/11/1953 and as such being minor on the date of the alleged execution of the promissory note, the same was void as against him. The trial court by judgment dated 29/04/1975 decreed the suit in favour of the Bank and against the defendants 1 and 2 only and dismissed the suit against defendant 3 as he was found to be minor on 26/08/1971.