CORPORATION BANK Vs. MOHANDAS BALIGA

JUDGEMENT

(1.) This Appeal by the plaintiff is preferred against the judgment and decree dated 22nd March, 1990 passed by the learned XVIII Additional City Civil Judge, Bangalore City in O.S.No. 10914/85. The suit was for recovery of a sum of Rs. 1,42,639.05 along with future interest and costs from defendants 1 to 3. The trial Court has decreed the suit as against defendants 1 and 2 but it has dismissed it as against defendant No.3.

(2.) The suit claim was divided into three parts. The first defendant is a proprietary concern. It raised three types of loans from the plaintiff-Bank: (i) A loan of Rs. 15.000/- was raised on 14-7-1981 on overdraft facility with interest at the rate of 17.5% per annum to be i compounded on quarterly basis under the over-draft Account No, 4/81. The second defendant was the surety; (ii) The second type of loan was a demand loan of Rs. 22,000/-. For this also the second defendant was a surety. This was operated under demand loan secured Account No.6/81; (iii) The third type of loan was raised by the first defendant on hypothecation by hypothecating machinery. It was for Rs. 44,000/- Hypothecated properties were as described in Schedule-B to the plaint. According to the case of the plaintiff, defendant No.3 was the surety to this loan; that a demand promissory note was also executed by defendants 1 and 3 on 21 -11 -80 for a sum of Rs. 44,000/- agreeing to pay interest of 19.40% per annum compounded on quarterly basis; that defendants 1 and 3 executed continuing guarantee agreement; that in addition to this the first defendant executed an Agreement hypothecating machineries as described in Schedule-B to the plaint. This machinery loan was maintained under loan account No. 1/80.

(3.) On the basis of the pleadings of the parties, the trial Court framed the following issues for consideration: