P JANAKIRAM CHETTY Vs. PUNJAB NATIONAL BANK LTD

JUDGEMENT

(1.) Defendant 2 is the appellant. The first respondent-Bank obtained a decree on 31st January 1964 against two defendants for a sum of Rs. 29,720-06. The first defendant accepted the decree and has not filed an appeal. The second defendant, however, has preferred this appeal challenging the correctness of the said decree against him.

(2.) The plaintiff-the Punjab National Bank Ltd. (which hereafter shall be referred to as the Bank) instituted O. S. No. 23 of 1959 in the Court of the Principal District Judge, Mysore, against two defendants to recover a sum of Rs. 38,203-01 due from them. It is the case of the plaintiff that it is a banking company, duly registered under the Indian Companies Act, having its head office at Delhi and two of its branches at Bangalore and Mysore. The defendants are merchants of Mysore and are also Directors of the Kapila Textile Mills, Ltd., Nanjangud, Mysore District (now in liquidation).The Kapila Textile mills, Ltd., hereafter shall be referred to as the Mills.

(3.) The said Mills had two cash-credit accounts with the plaintiff-Bank, one on a pledge account secured on the pledge of raw cotton, yarn and other manufactured goods; and the other, a hypothecation account secured on the hypothecation of loose cotton, cloth in pieces and materials in process including cotton on the machines. In addition to the above securities, the plaintiff-Bank had also obtained the guarantee of two defendants, who by their separate letters of guarantee, dated 15th December 1956, personally guaranteed the payment of demand of all the monies or of any balance due by the said Mills. These two guarantees are individually liable to the plaintiff to pay the monies due by the said Mills and their liability so to pay is independent of the liability of the principal debtors.