H MOHAMED KHAN Vs. ANDHARA BANK LTD

JUDGEMENT

(1.) This appeal has been preferred by the legal representatives of the original defendant-3 challenging the judgment and decree dated March 22, 1974, made against them in O.S.No.86 of 1969 by the Second Additional Civil Judge, Bangalore City.

(2.) Respondent-1, Andhra Bank Ltd. since nationalised and now called as the Andhra Bank Ltd. since nationalised and now called as the Andhra Bank ("the Bank") sued defendants 1 to 3 to recover a sum of Rs. 1,63,330/- on the following allegations : That defendant-1 Seth Menghraj Parasuram ("Parasuram") was having financial accommodation with the Bank under various sets of accounts. As security for the amounts advanced he has endorsed promissory notes and other securities in favour of the Bank executed in his favour of his customers. On April 4, 1966, defendant-2 Abdul Jabbar executed a promissory notes in favour of Parasuram along with a consideration receipt agreeing to pay on demand to him or to his order the sum of Rupees 1,20,000/- together with interest thereon at the rate of one per cent per mensem. For valuable consideration received, that promissory note was also endorsed in favour of the Bank. The Bank has thus become the holder in due course and is entitled to recover the amounts due under the said On Demand Promissory Note. Defendant-3 Mohamad Khan has stood guarantee for payment to the extent of Rs.75,000/- of the amount that might be advised by Parasuram to Jabbar and executed a letter of guarantee in that behalf. Parasuram has also assigned that letter of guarantee in favour of the Bank and Mohamad Khan is therefore liable to pay as guarantor to the extent of Rs.75,000/- and interest thereon.

(3.) Parasuram in his written statement has set up a short and simple defence. He has disowned the liability to pay the suit claim based on the promissory note and the receipt on the ground that he has endorsed the same in favour of the Bank for collection. In regard to the alleged letter of guarantee by Mohamad Khan, which was said to have been assigned in favour of the Bank, he feigned his ignorance and said that he was not even aware of it.