SHEEL POLYPACKS Vs. SANGLI BANK LIMITED

JUDGEMENT

(1.) This is a defendant's appeal arising out of a suit for recovery of money which the court below has decreed with interest pendent elite and till realization.

(2.) Defendant No.1-appellant herein was during the relevant period carrying on business in the manufacture and sale of poly propelene bags and sheets. It appears to have approached the respondent bank for two facilities in the nature of IBD and Cash Credit Hypothecation limits as early as in the year 1990 and 1991. Upon execution of the requisite documents that included demand promissory notes, letters of lien, hypothecation agreements, undertakings, etc., the bank provided the facilities of IBD limit to the tune of Rs. 2 lakhs and Cash Credit Hypothecation limit to the tune of Rs. 1 lakh, against security of stock of raw material, finished goods and goods in process. Repayment on amounts availed by the borrower was guaranteed by the defendant-appellant No. 2 in this appeal who had executed two letters of guarantee on 1.3.90 and 24.8.1991. Since the defendants did not arrange the repayment of the amounts outstanding in their account, a sum of Rs.1,77,538.25 as on 12th February, 1998 was due from them towards IBD limit apart from a sum of Rs.173708.60 towards Cash Credit Hypothecation limit. These amounts were exclusive of interest @ 22.5% claimed by the plaintiff-bank from 12.2.98 onwards. A suit for recovery of the said outstanding amount was accordingly filed by the plaintiff bank which was contested by the defendants on several grounds giving rise to the following issues :

(3.) In support of its case, the plaintiff bank examined PW-1 Shri K.D. Naik, Senior Manager, PW-2 Vithal D. Mohide, Deputy Regional Manager and PW-3 Ram Narsinha Puntambekar, apart from a number of documents that were proved and exhibited in the course of the trial. The defendants remained content with the affidavit of Shri Sushil Bahl, examined as DW-1 while defendant No. 2 was ex parte and did not appear or adduce any evidence.