UNION BANK OF INDIA Vs. SURESH BHAILAL MEHTA

JUDGEMENT

(1.) This is an appeal under Sec. 96 C.P.C. filed by the original plaintiff, challenging the judgment and decree of the dismissal of its suit, viz., Civil Suit No. 2173 of 1976, passed by the City Civil Court, Ahmedabad. The plaintiff had filed the suit against the defendants for a sum of Rs. 13,586.75 together with costs and interest.

(2.) The plaintiff averred that the first defendant-first respondent was a person who had suffered financial hardship on account of communal riots which broke out in the city of Ahmedabad in September 6, 1969, and therefore, requested the plaintiff-bank to extend to him credit facilities by way of a clean loan to continue his business activities. Accordingly, the plaintiff-bank sanctioned a loan of Rs. 15,000/- and paid that sum to him on 5th December 1969. The first defendant at that time executed a demand promissory note for the said amount, an agreement of hypothecation and other documents is favour of the plaintiff-bank, and the second defendant stood as a surety and/or guarantor for the liability of the first defendant. The second defendant, therefore, executed on the same day, i.e., 5th December 1969 a letter of guarantee in favour of the plaintiff-bank. Thus, according to the plaintiff, both the defendants are jointly and severally liable to pay to the plaintiff-bank the outstanding balance on account of the loan together with interest. It is further averred that the first defendant confirmed the correctness of the debit balances in his account from time to time on 31st December 1969, 30th June 1970, 30th January 1971, 30th June 1974 and lastly on 29th March 1976, by signing the balance confirmation statements and handing over the same to the plaintiff-bank. It is, therefore, averred by the plaintiff-bank that by signing and handing over to the plaintiff such balance confirmation statements, the first defendant has renewed his liability and/or obligations to pay the debt, and under the Letter of Guarantee the second defendant is a continuing guarantor and thus he is jointly liable to pay the amount outstanding in the account of the first defendant. According to the plaintiff, after giving due credit for the amounts paid by the first defendant towards the suit loan and interest, a sum of Rs. 13,586.75 is due and payable to the plaintiff by the defendants. The plaintiff-bank had issued a notice dated 22nd May 1976 to both the defendants, but since the said notice was not complied with, the plaintiff was obliged to file the suit.

(3.) The plaintiff had set out in para 7 of the plaint the necessary formal recitals as to the cause of action, notice, non-compliance with the demand, etc., and therefore, filed the suit as a Summary Suit under Order 37 of C.P.C.