VARGHESE Vs. DHANALAKSHMI BANK LTD

JUDGEMENT

(1.) This appeal arises from the judgment and decree of the second Additional Sub Judge of Trichur in OS No. 204/85.

(2.) The appellants were the defendants in OS No. 204/85 before the Sub-Court of Trichur. The respondent herein is the Dhanalakshmi Bank Ltd. and it had filed me suit as plaintiff for realisation of the amount due from the defendants. The facts are that the plaintiff bank had sanctioned a term loan to the defendants for a sum of Rs. 30,000/- for a period of five months repayable with interest at 16.15% per annum on 6.2.1981. The defendants availed of the loan on 18.2.1981 and they executed and delivered a demand promissory note for a sum of Rs. 30,000/- undertaking to repay the said amount with interest with quarterly rests. The loan was availed for commercial purposes by the defendants. The second defendant had mortgaged his properties by deposit of title deeds and had also executed a memorandum creating equitable mortgage. On 24.9.1982, a sum of Rs. 3,510/- and on 10.9.1983, a sum of Rs. 10,000/- were received through Chelakkara Service Cooperative Bank on behalf of the defendants. The balance amount was not repaid even after sending a notice on 20.10.1982. On 25.1.1984, the defendants acknowledged the liability in writing. Later the plaintiff Bank issued notice to the defendants on 12.10.1984. The plaintiff prayed for a decree for realisation of Rs. 48,744.95 with interest at 18% per annum on 47,480.90 from 1.4.1985 till realisation and with costs. There was a prayer for sale of the mortgaged property shown in the plaint. The defendants contended before the Trial Court that the Bank was not properly represented and that the suit was not maintainable. They denied execution of the letter of acknowledgement. Thus, according to them, the suit was barred by limitation. It was contended that the loan was granted on the undertaking given by the Chelakkara Service Cooperative Society and the stipulation was to pay the sale proceeds of cashew nuts supplied by the defendants to the society. Thus, according to the defendants, they had sold 5,302.500 Kgs. of cashew nuts to the aforesaid Society on 6.4.1981 and its value of Rs. 41,359.50 was received by the society for payment of the same to the Bank towards the loan transaction. According to the defendants they had supplied cashew nuts to the society on 23.4.1981, 25.4,1981 and 15.5.1981. They contended that the suit was bad for non joinder of Chelakkara Service Cooperative Society. Thus, they contended that the plaintiff was not entitled to get a decree without impleading the society.

(3.) After framing necessary issues the Trial Court examined PWs.1 to 4 and Dws.1 and 2 and marked Exts.A1 to A18, B1 to B4 and X1 to X5. After hearing both sides the lower court considered the matter and held that the Chelakkara Service Cooperative Society was not a necessary party and that hence the suit was not bad for non joinder of necessary parties. The lower Court held that the suit was not barred by limitation in view of the acknowledgement evidenced by Ext.A4. It was held that there was no valid contract between the plaintiff and the Chelakkara Service Cooperative Society, and that there was no validity for the undertaking given by the Secretary. The lower court held that even though the Society was not a necessary party it was a proper party. It was found that the plaintiff Bank was properly represented in the suit It was held that the plaintiff was entitled to get the amount as prayed for with interest only at the rate of 16.15% per annum with quarterly rests. Thus, the suit was decreed as prayed for showing interest at 16.15% per annum. Aggrieved by that judgment and decree the defendants had filed this appeal.