CENTRAL BANK OF INDIA Vs. J B INDUSTRIES

JUDGEMENT

(1.) The plaintiff bank has filed the suit against four defendants for the recovery of Rs.3,49.001.40. The case of the plaintiff is that the second defendant is the Proprietor of first defendant concern. Second defendant approached the plaintiff for sanction of loan under two heads; one Cash Credit Facilities for R.S. 1,25,000/- and the second Term Loan for Rs. l.75,000.00 for the manufacture of embossing of Stickers and Cards against the hypothetication of the raw-material and stocks-in-trade. The loan was sanctioned. The necessary documents were executed by the defendants 1 and 2 and defendants 3 and 4 were grantors for the repayment of the loan. Defendants I and 2 did not maintain the accounts properly. The demand was made on the defendants for the amount due that was not done- therefore the suit is filed.

(2.) Defendants 1 to 4 filed the written statement contending, inter alia, that first defendant was Small Scale Unit, the rates of interest charged by the plaintiff are excessive and beyond the policy of the plaintiff Bank. The plaintiff bank took signatures of the defendants on blank papers, the rates of interest charged from the Small Scale Industries Unit was 12% per annum while the plaintiff bank charged the interest rate from the defendant @ 16.5% is excessive. It is further case of the defendant that the plaintiff did not allow the defendants to have facilities after February 1985 and thereafter the plaintiff is not entitled to charge any interest for the period posterior to February 1985. In the written statement the defendants prayed as under : Direct the plaintiff to reconstruct their account in the manner as stated in the written statement and to permit the defendants to repay the same by way of reasonable monthly installments. The defendants in this behalf submit that this Hon'ble Court may be pleased to direct the plaintiff to reconstruct the account by charging the applying the interest at the rates applicable to SSI units and by charging interest with yearly rests; and in that behalf

(3.) The plaintiff had filed its replication