CORPORATION BANK Vs. DARBY

JUDGEMENT

(1.) THE Corporation Bank, who was the plaintiff in O. S. No, 2456 of 1990 on the file of the VIth additional City Civil Judge, Bangalore city, is aggrieved by the part decree granted by the trial court in respect of the cash credit facility transaction, wherein interest has been reduced to 12 per cent. simple per annum from the date subsequent to the suit, has preferred the above regular first appeal.

(2.) THE plaintiff's case in brief is that the plaintiff-bank is a banking company wholly owned by the Government of India, having its branch at Lady Curzon Road, Bangalore ; the first defendant is a partnership firm and defendants Nos. 2 to 5 are its partners ; defendants Nos. 1 to 5 are joint borrowers and also defendants Nos. 2 to 7 are guarantors ; on an application of the defendants for financial assistance for running liquor business of the first defendant, the plaintiff bank granted them cash credit facility up to a limit of Rs. 2,00,000 on May 4, 1987, and the same has to be closed within 24 months with interest subject to a minimum of 17. 5 per cent, per annum compounded quarterly ; accordingly a cash credit account No. 8 of 1987 was opened in the name of the first defendant ; the defendants have executed an on demand promissory note on May 4, 1987, and they also executed a deed of hypothecation, hypothecating the stock in their possession ; as a security for the said cash credit facility, the fourth and seventh defendants have executed an agreement on May 4, 1987, assigning his Life Insurance Corporation policy in favour of the plaintiff ; the first defendant has been a chronic defaulter and has failed to regularise the cash credit account satisfactorily despite repeated requests, a legal notice was issued to the defendant ; even after the issue of legal notice, the defendants have failed to repay the balance amount due to the plaintiff. Hence, the suit came to be filed for recovery of Rs. 2,06,438. 50.

(3.) THE defendants remained absent and ex parte and consequently accepting the evidence of pw-1 and the documents produced therein, the suit was decreed by the trial court.