CHANDRASHEKARA GOUDA Vs. CANADA BANK MANGALORE

JUDGEMENT

(1.) This appeal by defendant 7 is directed against the judgment and decree dated 5-9-1974 passed by the District Judge, South Kanara, Mangalore in R. A. No, 8 of 1971 on his file, partly allowing the appeal and to that extent reversing the judgment and decree dated 14-4-1971 passed by the I Addl. Civil Judge, Mangalore in O. S. No. 83 of 1968 on his file, dismissing the suit of the plaintiff bank against defendants 6 and 7 granting decree only against defendant 2.

(2.) Defendant 2 is the Proprietor of a money lending firm called Mangalore City Bankers arrayed as defendant 1. Defendants 3 to 5 are the sons of defendant 2. Under a hire-purchase agreement entered into by defendant 6 for which defendant 7 was the guarantor, dealer of goods vehicle, sold the goods vehicles to defendant 6. In respect of the advance made by defendant 2 to defendants 6 and 7, the plaintiff bank financed defendants 1 and 2 for which defendant 2 executed a pronote for Rupees 1,50,000/- An agreement was entered into between the plaintiff and defendants 1 and 2, according to which, the plaintiff was to advance amounts from time to time to the limit of Rs. 1,50,000/- on taking hire-purchase agreements from customers. Defendant 6 entered into hire-purchase agreement in favour of defendant 2 the proprietor of defendant 1 and hired the goods vehicle. Subsequently, defendant 2 also took a promissory note as collateral security from defendants 6 and 7 and he assigned the same to the Bank and since the Bank did not receive the instalments from defendant 2 or from defendants 6 and 7, the Bank filed a suit against defendants 1 to 7.

(3.) As stated above, defendant 1 is the Mangalore City Bankers concern. Defendant 2 is the proprietor of the first defendant; defendants 3 to 5 are the sons of defendant 2 and defendant 6 is the person who entered into hire-purchase agreement with defendant 2. Defendant 7 is the subsequent purchaser of the vehicle after the cancellation of hire-purchase agreement by defendant 2.