BANK OF INDIA Vs. C R RAMALINGA GUPTA

JUDGEMENT

(1.) This appeal by the appellant-plaintiff, Bank of India, is directed against that part of the judgment and decree dated May 27, 1985, made in O.S. No. 11 of 1984, a suit for sale on a mortgage, on the file of the Principal Civil Judge, Shimoga, by which the appellant's claim for the enforcement of a covenant for compounding of interest with half yearly rests on the agricultural loan was disallowed decreeing the appellant's suit for sale on a mortgage.

(2.) On January 24, 1984, the appellant instituted a suit for recovery, from the respondent-defendants, of a sum of Rs. 27,002.45 said to be the principal and accrued interest on two loans of Rs. 6,000 and Rs. 2,500, dated August 11, 1975, and May 15, 1976, respectively, borrowed by the first-respondent. A certain Laxman Rao, the second defendant, was the surety. Respondent Nos. 2 to 6 in this appeal are his legal representatives.

(3.) The first loan of Rs. 6,000 was stated to be a crop-loan and the second one of Rs. 2,500 was obtained for the purpose of erecting a fence. The first loan was said to carry interest at 2 1/2% per annum and the second Interest on both the loans, it was claimed, was compoundable with quarterly rests. Both were agricultural loans and were secured by mortgage of immovable property.