VIJAYA BANK Vs. MYTRIDATTA MOVIES AND ORS.

JUDGEMENT

(1.) I have heard the appellants' learned Advocate and the learned Advocate who represents the L.Rs. of deceased respondent 3 who was the original defendant 3. The preliminary objection canvassed on behalf of L.Rs. of respondent 3 is that they have wrongly been made parties to the appeal and furthermore, what is pointed out is that the Bank ought to have dropped the original defendant No. 3 at the stage when the attachment was raised insofar as the defendant 3 was a party to the suit in his capacity of a guarantor. Defendant 3 had pointed out that the Bank had substituted one Smt. Manjula as a guarantor in place of defendant 3 and that consequently on and from that time the defendant 3 could not be held liable for the whole or any part of the decree passed by the Court. The situation has got slightly aggravated now because defendant 3 had died and the L.Rs. are sought to be held liable in their capacity as heirs of the guarantor and the learned Advocate submits that if he is able to satisfy the Court that defendant 3 had ceased to be a guarantor from the year 1990 onwards, that this Court must delete the original defendant 3 and the L.Rs. from the proceedings. It is true that neither the defendant 3 nor the L.Rs. have filed any appeal against the decree but the whole issue is open insofar as the Bank has filed an appeal and secondly while considering the case if it does appear that there is a manifest error on the record, it is within the jurisdiction of the Appeal Court to rectify that error.

(2.) Learned Counsel who represents the appellant Bank submitted that while it is true that one Smt. Manjula was taken over as a guarantor and that the attachment against the property of the defendant 3 was raised, that since the suit had continued against defendant 3 the Court would have to construe the second guarantor as an additional guarantor and not as being a fresh or substituted guarantee that has the effect of discharging the defendant 3 from the liability totally. As far as this submission is concerned, it would be difficult to uphold it because the respondents have produced before me a long with their statement of objections a confirmatory letter of the Bank itself dated 22.5.1990 very clearly indicating that the attachment against the original defendant 3's property was raised because Smt. Manjula was taken as guarantor in place of the original defendant 3. Also the Bank has taken steps to attach the property of Smt. Manjula and therefore, there is total extinguishment of the liability vis-a-vis defendant 3 on and from that point of time. The necessary consequence would, therefore, be that the suit as against defendant 3 will have to be taken as having been dismissed but this will not in any way affect the validity of the decree vis-a-vis the remaining defendants.

(3.) The Bank's learned Counsel principally on the basis of the decision reported in ILR 1993(3) Karnataka 2035, submitted that the award of interest at the flat rate of 6% in the operative part of the lower Court's order is erroneous. He submitted that the suit was virtually defenceless and that the Bank has not only lead evidence but produced requisite documents and that consequently the Trial Court was certainly in error in not having awarded the higher rate of interest despite the aforesaid records. His submission was that since the respondent though served, have virtually not contested this appeal, that the appeal be allowed and that necessary rectification be done by this Court.