STATE OF BANK OF INDIA Vs. KAUSHAL PLASTICS

JUDGEMENT

(1.) This is a suit for recovery of Rs. 3,70,530.95 filed by the Plaintiff bank against the Defendants, Defendant No. 1 a partnership firm and Defendants No. 2 to 5 its partners. It is alleged that Plaintiff had granted financial assistance to the Defendants in the sum of Rs.20,000.00 for working capital. This was extended to Rs.75,000.00 later and again to Rs.3,10,000.00 . The Defendants have executed various documents including Demand Promissory Note dated 10.4.1983 in the sum of Rs.2,50,000.00 repayable with interest at a minimum rate of 16% per annum with quarterly rests and Agreement of hypothecation dated 10.4.1983 pledging the stock in trade, machinery etc. as security. Defendant No. 2 had also created equitable mortgage by deposit of title deed in respect of his property No. 3B, Inder Luk, Old Rohtak Road, Delhi. This facility was availed by the Defendants. They had executed revival letters dated 23.2.1986 and 27.3.1986 acknowledging their liability to pay thereby extending the period of limitation. The Defendants did not make repayment of the dues in spite of notices of demands and a sum of Rs.3,67,261.30 as balance due-en 29.10.1986, Rs.3,204.65 as interest for 29.10.1986 to 19.11.1986 and Rs.65.00 as enpenses, in all Rs.3,70,530.95 are claimed in the present suit for recovery and also-preliminary decree for sale of the mortgaged property.

(2.) Defendants filed written statement disputing their liability. It is admitted that they were granted Financial assistance ofRs.20,000.00 and then ofRs.75,000.00 . However, it is denied that the limit was extended to Rs.3,10,000.00 . It is admitted that various documents were signed by them. However, it is stated that signatures of Defendants were obtained on various blank documents when financial assistance of Rs.20,000.00 was granted. It is also denied that Defendants had executed revival letters dated 23.2.1986 or 27.3.1986. It is alleged that the Plaintiff is guilty of not making the advances in accordance with the agreement and dishonoured the cheques issued by the Defendants thereby causing loss to them. It is also alleged that the suit is time barred and is not maintainable. Liability to pay interest is also denied.

(3.) Plaintiff in replication had denied the averments made in the written statement reaffirming their case pleaded in the plaint.