SYNDICATE BANK GADAG Vs. A V ANGADI

JUDGEMENT

(1.) THE plaintiff in a suit for recovery of money on a mortgage is the appellant. The first defendant is a registered partnership firm, of which, defendants 2 to 6 are its partners. Defendants 7 and 8 are impleaded as their co-obligants with defendants 1 to 6 who have executed necessary loan documents along with defendants 1 to 6 in favour of the plaintiff-bank.

(2.) ACCORDING to the plaint allegations, defendant 1-the partnership firm and its partners defendants 2 to 6 entered into an agreement with the food corporation of India on 29-1-1977 to construct two godowns of 2500 tonnes capacity each on the specifications laid down by the food corporation of india. They had agreed to complete the construction of the two godowns in their land on gadag-hubli road and give delivery to food corporation of India within six months from the date of signing of the agreement. For the above purpose, defendants requested the plaintiff-bank for giving financial aid to be released under

(3.) THE plaintiff-bank advanced a total sum of Rs. 5,30,000/- to defendants 1 to 6 with the co-obligants-defendants 7 and 8 towards the said project of the construction of the said godown, as per the terms and conditions agreed and embodied in the agreement dated 27-1-1978 evidenced by ex. P-1. An equitable mortgage of the land in r. s. No. 312/1 was also made by deposit of title deeds, the original registered sale deed along with other relevant documents. The defendants have agreed to repay the loan in instalments of Rs. 12,000/- per month. The first instalment to commence from 30-4-1978 till closing the loan in full. They have also agreed to pay interest at the rate of 7% above the reserve bank of India rate subject to the minimum of 16% p. a. , on 31st march, 30th june, 30th September and 30th December in each year so long as the principal or part remain unpaid. The defendants had also agreed to pay interest at quarterly rates and on failure to pay overdue interest at the rate fixed by the plaintiff-bank from time to time. Defendants 7 and 8 have agreed and accepted all the terms and conditions of loan and have joined in execution of the suit loan documents along with other defendants 1 to 6. The defendants also equitably mortgaged the properties mentioned in schedule-a by depositing their title deeds on 24-1-1978. Defendant 2, the managing partner of defendant 1-firm and the general power of attorney of defendants 1 to 6 has created an equitable mortgage of his land bearing r. s. No. 288/e by giving additional security for the said loan. The properties so mortgaged as additional security are described in schedule-b-i in the plaint. On 27-1-1978, as per the above scheme and in accordance with the agreement, an amount of Rs. 77,300/- was released and credited to the defendants suspense account, for which, they had executed a stamped receipt. As per the above agreement, amounts were paid on 21-4-1978 and on subsequent dates, for which, the defendants have executed duly stamped receipts on the respective dates.