BANK OF INDIA Vs. JOGESH KUMAR SETHI

JUDGEMENT

(1.) Defendant no.1 approached the plaintiff bank for grant of financial facilities. The request of defendant no.1 was considered and acceding to his request he was granted a Cash Credit (Hypothecation of Stocks) facility with a limit of Rs.1,40,000.00 on 29.4.1986 with interest thereon at the rate of 6.5% OBR minimum 16.5% per annum with quarterly rests. The said limit at the request of defendant was enhanced by a sum of Rs.90,000.00 on 10.12.1986 thereby bringing the total limit to Rs.2,30,000.00 . Following documents were executed in favour of the plaintiff by defendant no.1 on 10.12.86 :-

(2.) These documents are Ex.Public Witness 1/2 to Public Witness 1/7. For the said facility, defendant nos.2 and 3 executed in favour and delivered to the plaintiff bank a letter of continuing guarantee. Defendants 2 and 3 further agreed that the plaintiff bank could, at its liberty, treat them as principal debtors. The guarantee letter is Ex.Public Witness 1/8.

(3.) The limit of cash credit facility was further enhanced by Rs.1,30,000.00 on 15.4.1987 and documents were executed by defendant no.1 in favour of the plaintiff. The same are Ex.Public Witness 1/9 to Public Witness 1/12. In consideration and enhancement of the limit in cash credit limit by an additional amount of Rs.1,30,000.00 , defendant nos.2 and 3 further executed and delivered to the plaintiff on 15.4.1987 letter of continuing guarantee. The same is Ex.Public Witness 1/13. Defendant no.3 on 22.9.1987 deposited with the plaintiff bank title-deed of her property i.e. 44, Mahila Colony, Gandhi Nagar, Delhi with an intention to create an equitable mortgage in favour of the plaintiff bank on the said property. The said equitable mortgage was a security for the plaintiff bank for realisation of the entire limit of Rs.3,60,000.00 along with cost, interest and other charges.