UNION BANK OF INDIA Vs. MONIN ENTERPRISES

JUDGEMENT

(1.) THIS appeal is by the plaintiff-Bank. Plaintiff-Bank filed a suit for the recovery of Rs. 1,13,401. 57 with cost and future interest at 16. 5% p. a. , compounded quarterly from the date of suit till the date of realization of the decretal amount.

(2.) ACCORDING to the plaint averments, that the 1st defendant has availed the cash credit loan facilities from the plaintiff-Bank. According to the plaint averments, Bank extended the facility to the 1st defendant on 17-11-1981 for a sum of Rs. 10,000/- and the same was enhanced to Rs. 25,000/- on 15-7-1982 and from 25,000/- to 30,000/- on 27-4-1983 and finally, it enhanced the amount to Rs. 45,000/- on 8-12-1983. On 14-5-1984, the 2nd defendant stood as a guarantor for due payment to be made by the 1st defendant. Since the defendants did not pay the amount, the suit has been filed for the recovery of the said amount. The defendant No. 1 entered appearance and filed the written statement. He has denied the whole transaction and according to him, he has not availed the said facilities. Alternatively, he pleaded to permit him to pay the decretal amount on easy instalment at Rs. 100/- per month. The defendant No. 1 has also denied the execution of balance confirmation letter dated 8-3-1984, 9-7-1984, 26-7-1984, 9-7-1987 and 25-6-1988.

(3.) THE 2nd defendant appeared before the Court and filed the written statement contending that he has not stood as a guarantor in favour of the 1st defendant. According to him, he has not executed the guarantee deed dated 14-5-1984 in favour of the Bank or on behalf of the 1st defendant. It is contended by him that the plaintiff has not granted the loan facilities to the 1st defendant based on the deed of guarantee executed by the 2nd defendant. He further says that his signatures have been obtained by the Bank when he approached the Bank for grant of loan for his business. By misusing the innocence of the defendant No. 2, plaintiff has filed the suit contending that he has stood as guarantor for the 1st defendant. Alternatively, he also feels that there is a gross negligence on the part of the Bank in not taking suitable steps to recover the money from the 1st defendant and that the confirmation letter even if it is executed by the defendant No. 1, the same is not binding on him.