CORPORATION BANK Vs. MANJOG BUILDERS

JUDGEMENT

(1.) THESE two appeals arise out of the same judgment and decree of the Trial Court and therefore, they are taken up for consideration together and disposed of by this common order.

(2.) FOR the purpose of convenience, the parties are referred to as they are referred to in the original suit before the Trial Court.

(3.) CORPORATION Bank, Shanthinagar, Bangalore is the plaintiff in O.S.No.4991/1994. The case of the plaintiff is that the second defendant Mrs.Amarjeet Kaur as the Proprietrix of the first defendant M/s.Manjog Builders and third defendant Mr.Manjit Singh Sachdev as the guarantor approached the plaintiff for certain credit facilities by way of over draft for the purpose of working capital. A sum of Rs.5 Lakhs was sanctioned. The defendants availed the over draft facility in O.D. account No.14/1986 on 28.11.1986. They agreed to pay interest at 17.75% p.a. compounded quarterly. The defendant Nos.1 to 3 have executed necessary loan documents in favour of the plaintiff on 28.11.1996. They also agreed to pay over due interest at the rate of 2% p.a. As a collateral security, the second defendant created equitable mortgage by deposit of title deeds in respect of suit 'B' schedule property and executed memorandum, confirming the deposit of title deeds on 28.11.1986. The third defendant has executed continuing guarantee dated 28.11.1986. The defendants failed to carry out the operation regularly in their O.D. account No.14186 to the satisfaction of the plaintiff and failed to pay the dues. Therefore, a sum of Rs.5,32,403.54/ - was the balance amount due under the O.D. account. A sum of Rs.1,66,160.00/ - was the interest payable at 21% p.a. on the said amount from 01.04.1993 to 30.06.1994 and Rs.22,508.00/ - is the interest due from 01.07.1994 till the date of filing the suit, in all, a sum of Rs.7,21,072/ -.