SYNDICATE BANK Vs. DOABA PAINT HOUSE

JUDGEMENT

(1.) The present suit is filed by the plaintiff for recovery of Rs.1,24,441.18 against the defendants.

(2.) The plaintiff is a Bank, constituted and functioning under the Banking Companies (Acquisition and Transfer of Undertekings) Act, 1970, with the Head office at Manipal, South Kanara District of Karnataka State and a branch, amongst others at Punjabi Bagh, Delhi It is alleged in the plaint that the plaint is signed, verified and the suit instituted by Smt.Vathsala Pant, who was the Manager and Principal Officer of the plaintiff Bank at Punjabi Bagh, New Delhi. She was duly authorised to file the suit, sign and verify the plaint and-was also conversant with the facts of the case.

(3.) Defendants 2 and 3, who are father and son respectively have been carrying on business in the partnership under the name and style of defendant no.1. It is alleged that at the request of the defendants, the plaintiff bank granted overdraft limit of Rs.25,000.00 against hypothecation of stocks, consisting of paints and varnish etc. and an overdraft limit of Rs.25,000.00 against pledge of goods and another limit of Rs.5,000.00 against discounting of cheque and drafts. The said facilities were required to be secured by way of equitable mortgage of property owned by defendant no.2 and in this context, the said defendant deposited the original Title Deed of property No. 17A/29Q, Anand Parbat Industrial Arca,New Delhi as collateral security. The defendants further requested on November 25,. 1972 that they were facing certain practical difficulties regarding the pledge; account and that the overdraft against hypothecation of stocks be enhanced to Rs.50,000.00 in cancellation of the pledge account. The plaintiff Bank agreed to the said request and accordingly enhanced the over-draft limit against pledge of goods. The defendants executed various documents, including the Demand Promissory Note dated April 4, 1973 for Rs.50,000/ - carrying interest at the rate of 4 % per annum above the bank rate with a minimum of 10% per annum compounded quarterly.