K. CHELLAPPAN PILLAI Vs. CANARA BANK

JUDGEMENT

(1.) DEFENDANTS Nos. 1 and 3 in O. S. No. 127 of 1979 on the file of the Court of the Subordinate Judge, Mavelikkara, are the appellants.

(2.) THE suit was filed by the first respondent herein for money due under a cash credit account and mortgage loan account. The first defendant took these loans for expansion of his concern, Elite Radio and Electronic Components at Mararikulam Mini Industrial Estate after executing demand promissory notes, agreement of hypothecations of movables and an equitable mortgage. Defendants Nos. 2 and 3 are co -obligants. The hypothecation agreement was executed by the first defendant on March 10, 1976. On the same day, all the defendants executed another agreement. The demand promissory note was executed on the next day. The third defendant created an equitable mortgage in favour of the plaintiff. As per the loan account as on August 5, 1976, the first defendant was given financial assistance to the tune of Rs. 17,166.83, and the amount due to the bank on this account as on January 13, 1979, came to Rs. 22,057,67. As per the open cash credit account, the amount due to the bank as on January 13, 1979, came to Rs. 30,367.39. Thus, as on January 13, 1979, a total sum of Rs. 52,425.06 was due to the plaintiff -bank and in spite of repeated demands, the defendants did not pay the amount. In accordance with the conditions of the hypothecation agreement, the plaintiff took possesssion of the raw materials and machinery and they were auctioned and a sum of Rs. 13,424 was realised which was credited on May 3, 1979. Some furniture and fittings in the premises of the said concern and belonging to the defendants could not be auctioned by reason of a suit filed by the sellers claiming certain rights over these articles. The said suit was pending in the Munsiffs Court.

(3.) IN the written statement filed by the first defendant, it was contended that the court had no territorial jurisdiction, that the suit was barred by limitation and the payment of Rs. 200 by the first defendant was made not on December 6, 1976, but on December 3, 1976. He also contended that he remitted 10% of the loan sanctioned by the bank which was not credited. It was also alleged that a sum of Rs. 2,800 was sanctioned to him as subsidy by the Industrial Development Corporation and another sum of Rs. 2,800 remitted by him in the bank are not seen credited. It was further averred that the bank took possession of movable articles worth Rs. 60,000 on June 1, 1978, and some of the articles were stolen while the plaintiff -bank had custody of those articles and that the plaintiff was liable for the loss. It was also his case that there were several unauthorised entries making debits in the accounts in his name. The interest claimed also was disputed. In the above circumstances, he prayed that the suit be dismissed.