UNION BANK OF INDIA Vs. NARENDRA PLASTICS BHAVNAGAR

JUDGEMENT

(1.) Ethically immoral legally untenable and pernicious in its practical implications If one were to comment Upon the judgment and decree under appeal in the aforesaid terms it would be difficult rather almost impossible to contradict the statement on any rational and logical grounds being aggrieved by such judgment and decree passed by the learned C. J. (S. D.) Bhavnagar the appellant Union Bank of India original plaintiff has preferred this appeal

(2.) The respondents are original defendants Defendants Nos. 1 to 3 are principal debtors and defendants Nos. 4 to 6 are guarantors. Defendants are business men Defendant Nos. 1 to 3 had opened cash credit hypothecation account with plaintiff-Bank. In this account loan amount sanctioned was to the extent of Rs. 1 75 0 Necessary documents in favour of the Bank including hypothecation agreement was executed by the principal debtors. Since the margin was not being maintained the Bank insisted for security and hence the principal debtors furnished the guarantee of defendants Nos. 4 to 6. Even thereafter the amount remained unpaid. Hence the plaintiff-Bank issued office demanding the amount due. Thereafter when the notice was not complied with the plaintiff Bank filed suit for recovery of Rs. 3 42 145 ps. with 17.5 per cent interest.

(3.) The suit was filed on 7/01/1989 Even before the suit became ripe Lok Adalat was to be held in July 1989. The defendants Nos. 1 to 3 who are principal debtors filed written statement while rest of the defendants have not even filed written statement. In the Lok Adalat the defendants filed purshis Ex. 31 admitting the claim of the Bank and praying for instalments and reduction of rate of interest from 17 5 per cent to 12 per cent. The Bank objected to the decree being passed as suggested by the defendants and the objections were filed by Ex. 32. Despite the objections of the trial Court passed decree describing in the decree that suit was called out in Lok Adalat in presence of the advocates of the parties and the compromise decree is passed. The trial Court directed that the defendants shall pay the amount of decretal dues by quarterly instalments Rs. 18 0 with 13 per cent interest (instead of 12 per cent as suggested by the defendants). It is his decree which is challenged by the appellant original plaintiff-Bank.