FEDERAL BANK LTD. Vs. K.C. SIVANANDAN

JUDGEMENT

(1.) Aggrieved by the dismissal of the suit for recovery of money and the decree passed on the counter claim, the plaintiff is in appeal.

(2.) The plaintiff is a Bank. According to the plaintiff, the first defendant availed a cash credit facility of Rs. 5 lakhs from the plaintiff-Bank on 13.03.99. The facility was secured by defendants 2 to 7 on their personal guarantee as well as by creating equitable mortgage over plaint 'A' to 'C' schedule immovable properties. The plaint-A schedule property belongs to the second defendant, plaint 'B' schedule to the third defendant and plaint 'C' schedule to defendants 4 to 7 jointly. The suit is filed for recovery of the loan amount with interest.

(3.) The first defendant-principal borrower admitted the transaction, but challenged the rate of interest claimed. Defendants 3 and 7 remained ex parte. The second defendant on one hand and defendants 4 to 6 on the other, disputed their involvement in the transaction. They denied the plaintiff's claim that they are guarantors to the transaction. They also denied the creation of equitable mortgage in respect of the plaint 'A' and 'C' schedule properties. The title deed regarding the 'A' schedule property is Ext. A5 and regarding 'C' schedule property is Ext. A9. Regarding the possession of the title deeds by the plaintiff Bank, the contention of the second defendant as well as defendants 4 to 6 are similar. It is their case that the first defendant is the partner of a financing concern. They borrowed amounts from the first defendant, and to secure the same, they were required to hand over Exts. A5 and A9 title deeds to the first defendant. The first defendant has misutilised the same and has given the same to the plaintiff's Bank. They have not created equitable mortgage nor they have stood as guarantors for the loan availed by the first defendant, is their contention. The second defendant raised a counter claim seeking a mandatory injunction for return of Ext. A5 title deed.