SYNDICATE BANK Vs. K MANOHARA

JUDGEMENT

(1.) Against the judgment and decree passed in O.S. No. 39/1990 on the file of the Sub-Court, Kasaragod, this appeal is filed by the plaintiff. The plaintiff filed the suit for recovery of money. An amount of Rs. 25,000/- advanced by the plaintiff to the first defendant and the second defendant was the surety. On the date of advancement of money, the defendants have jointly executed a memorandum of agreement in favour of the plaintiff agreeing to repay the amount with interest at 12% per annum with the compound interest with quarterly rests. As per the agreement, the amount has to be repaid in monthly instalments of Rs. 325/- from 12-10-1984 and the last instalment was due on 12-2-1991. The said amount was borrowed by the first defendant for business purposes. The first defendant had hypothecated the goods and the machinery which is described as B schedule in the plaint. The defendants further agreed to pay overdue interest at 12.5% per annum. An amount of Rs. 36,621/- is due from the defendants. Hence the suit is filed for recovery of the said amount.

(2.) The first defendant remained ex parte and the second defendant alone filed a written statement contending that the suit is filed without any bona fides. The second defendant has no connection with the loan transaction. The loan was granted to the first defendant under the scheme for providing loan to self-employment of un-employed educated youth. There is a circular from the Reserve Bank of India to the effect that the person who availed loan alone is liable to pay the amount. The assets purchased out of the Bank finance alone will be the security for advancement of the loan. So the plaintiff has no authority to proceed against the second defendant. The first defendant is conducting a shop by name "Sithara". He has also in exclusive possession of 95 cents of property in R.S. No. 59/13 in Edanad village besides his joint property in Arikkady. He denied the execution of agreement in favour of the plaintiff for the loan of Rs. 25,000/-. There was no agreement to pay interest also. The documents produced by the plaintiff are not binding on him. The suit is barred by limitation.

(3.) On the basis of the pleadings the Court below raised three issues. The evidence in the case consists of the oral testimony of P.Ws. 1 and 2 and Exts. A1 to A14, Ext. B1. The Court below after appreciation of the evidence decreed the suit against the first defendant alone and dismissed against the second defendant. Against the said judgment and decree this appeal is preferred by the plaintiff.