STATE BANK OF INDIA Vs. G J HERMAN

JUDGEMENT

(1.) The question that has come up for consideration in this case is as to whether the court has got jurisdiction to direct the creditor to postpone the execution of a decree as against some of the sureties, till the creditor exhausts his remedies against another surety.

(2.) Plaintiff is the appellant. Suit was for realisation of money. Plaintiff bank had advanced a loan of Rs. 6,40,000/- to one Sasihithlu Fisheries on the guarantee of fifth respondent, a society set up for the welfare of the fishermen, for the purchase of a mechanised fishing boat. Fifth respondent stood as guarantor by pledging fixed deposit receipts for Rs. 9.87 lakhs. Sasihithlu Fisheries failed to repay the loan amount. Consequently, fifth respondent offered to find out a person, for purchase of the fishing boat, provided the credit facilities given to Sasihithlu Fisheries are transferred to the said purchaser by the bank. Plaintiff bank accepted the offer and agreed to transfer the loan account in the name of the intending purchaser, as suggested by the fifth respondent.

(3.) Accordingly fifth respondent proposed the first respondent to purchase the fishing boats and requested the bank to transfer the loan account in the name of the first respondent. Consequently, on 10.2.1981 first respondent approached the plaintiff bank for a loan of Rs. 6,91,000/- for purchase of fishing boats and accessories. Bank had on 10.2.1981 granted the loan of Rs. 6,91,000/- on the guarantee of respondents 2 and 3. All the three respondents executed necessary documents before availing of the loan. Respondents 2 and 3 have deposited their title deeds which are described in the plaint as A, B and C schedules with intention to create an equitable mortgage in respect of those properties. Respondents 1 to 3 agreed to repay the loan amount in monthly instalments with minimum interest at 11.35% per annum. Fifth respondent also offered fixed deposits as security for the loan amount advanced to the first respondent. They agreed that the entire loan amount would be paid within a period of seven years from the date of avail.