STATE BANK OF INDIA Vs. JAY BEE ENTERPRISES

JUDGEMENT

(1.) The State Bank of India, hereinafter described as the appellant, has filed the present suit for recovery of Rs.1,34,854.72 against the defendants. It has been pleaded that Shri T.C.Sharma has been duly authorised by the local head office to institute and file the present suit. Defendant no.1 is alleged to be a sole proprietorship firm carrying on business of manufacturing body building of buses and tractors. Defendant no.2 is stated to be the proprietor of defendant no.1 and 3 is the guarantor. Defendant no.3 died on 12/4/1986. Therefore defendants 3(a) to (d) have been arrayed as defendants.

(2.) It is the case pleaded that defendant no.2 on behalf of defendant no.1 approached the plaintiff for grant of cash credit facility. The plaintiff considered the application and allowed the cash credit facility to the extent of Rs.1,25,000.00. Defendants 1 and 2 executed an agreement for cash credit limit against hypothecation of goods on 21/1/1983. Tek Chand stood as the guarantors. A promissory note was executed by defendants 1 and 2 to the extent of Rs.1,25,000.00. The deceased Tek Chand endorsed the same as guarantor. When defendants wilfully were not depositing the sale proceeds a legal notice was issued. The plaintiff was constrained to transfer the outstanding amount of Rs.1,33,792.30 to the Protested Bill adding interest from 8/8/1988 to 28/8/1988. The present civil suit has been filed.

(3.) Defendants 1 and 2 in their written statement filed took up the preliminary objection that civil suit is bared by time. The plaintiff was alleged to be not entitled to any interest and that it has not been properly signed and verified. It has been pleaded that there was no agreement to pay the interest and further that defendant no.1 had started running into heavy losses and was therefore not in a position to pay the amount.