SYNDICATE BANK UDUPI Vs. K CHANDRAKALA BHAKTHA

JUDGEMENT

(1.) ON the request of first respondent as principal debtor and respondents 2, 3 and K. Prakash bhakta (of whom respondents 4 to 8 are the legal heirs) as co-obligants/guarantors, the petitioner-Bank sanctioned a loan of Rs. 3,50,000. 00 in November 1980 for the purpose of establishing and starting a nursing home (Bhakta's Nursing Home) by the first respondent respondents 1 to 3 and K. Prakash Bhakta (for convenience, referred to jointly as the 'borrowers') agreed to secure the repayment of the loan to be advanced to the first respondent by equitable mortgage of the suit 'a' schedule property (Sy. No. 128/37 measuring 73 cents at shivalli Village, Gundibail Ward, Udupi Taluk, situated within Udupi municipal Limits ).

(2.) THE respondents executed a loan agreement dated 16-3-1981 containing the terms and conditions of the loan and first respondent availed the loan dated 16-3-1981 and subsequently the Bank alleges that the borrowers agreed to repay the said loan in certain instalments between 16-10-1981 and 16-3-1986 with interest at the rate of 6. 10% p. a. above the reserve Bank of India rate, subject to a minimum of 15. 10% p. a. or at such rates to be charged by the petitioner-Bank from time to time as per the directives of the Reserve Bank of India applicable for such loans; and that in the event of default, the borrowers agreed to pay an overdue interest at the rate of 17. 80% per annum on the overdue amount. According to the Bank, in addition to the equitable mortgage of suit 'a' schedule property, the Borrowers also hypothecated the suit 'c' schedule movables of Bhakta's Nursing Home consisting of medical equipment, furniture and fittings, as security.

(3.) THE petitioner-Bank filed a suit in O. S. No. 437 of 1988 on the file of Civil Judge, Udupi, against the Borrowers alleging default in repayment of the loan by the Borrowers, for recovery of Rs. 10,52,457. 96 from respondents 1 to 3 and Prakash Bhakta, with interest thereon from the date of suit till the date of realization at the rate of 17% p. a. within the time to be fixed by the Court. The Bank also sought a decree for sale of the suit 'a' schedule property and suit 'c' schedule movables in the event of failure to pay the decretal amount within the time to be fixed by the court.