UCO BANK Vs. LUCKY AND COMPANY

JUDGEMENT

(1.) BEING aggrieved by decreeing of the suit in part and declining the prayer of preliminary decree for mortgage in respect of 'B' and 'C' schedule properties and dismissal of the suit against defendants 4 and 5, appellant-UCO Bank has preferred this Appeal.

(2.) BRIEF facts which led to the filing of suit is as follows: Defendants 2 and 3 (Perumal @ Kaliaperumal and Shanmugam) are the partners of 1 st respondent-Lucky and Company. On 31.5.1972, defendants 2 and 3 approached the plaintiff Bank and availed loan of Rs.5,000/- by hypothecating the 'A' schedule properties. Defendants 2 and 3 have also agreed to repay the same with interest at the rate of 6% p.a. over the RBI rate subject to a minimum of 15% p.a. On 19.3.1973, at the request of defendants 2 and 3, the said limit was enhanced to Rs. 20,000/- and to that effect defendants 2 and 3 have executed documents by way of securities. Subsequently, defendants 2 and 3 have requested for further increase in the limit. One Sundarambal executed guarantee deed infavour of plaintiff Bank on 16.5.1973 and also deposited her title deeds in respect of 'B' schedule property belonging to her with an intention to create an equitable mortgage over the same for the liability of 1 st defendant not only for the existing limits, but also for the future increase in limits.

(3.) CONTENDING that 5th defendant-Central Bank of India is unnecessary party to the suit, 4th defendant filed written statement which was adopted by 1 st defendant contending that and the suit is hit by mis-joinder of parties. Case of 4th defendant is that there is no cause for the suit, since he had not extended the alleged mortgage of 'C' schedule property infavour of plaintiff Bank and extension of any mortgage is one unknown to law. According to 4th defendant, there was no enhancement of claim to the tune of Rs. 5.50 lakhs as alleged, besides the ad hoc limit of? 1 lakh, because, at every stage, the outstanding balance would be adjusted towards the part of the quantum payable and the actual amount of advance availed would only be less than Rs. 4 lakhs. Further case of 4th defendant is that Sundarambal was only a guarantor and she never offered her 'B' schedule property as mortgage. Likewise, 4th defendant has also never extended any mortgage in respect of 'C' schedule property and he does not own the same. Since, Pondicheny Municipality demolished the business place of 1st defendant, 1st defendant Firm suffered heavy loss and prayed for dismissal of the suit.