D PANDI Vs. DHANALAKSHMI BANK LIMITED

JUDGEMENT

(1.) Second defendant in O. S. No. 493 of 83 on the file of the Additional Subordinate Judge, Madurai is the appellant in the above appeal. The plaintiff/respondent herein filed the said suit for recovery of a sum of Rs. 6,73,577-01 with subsequent interest at 18 per cent per annum from the date of the plaint till date of realisation, for sale of the immovable and movable properties in the Schedules A, B and C of the plaint and for appropriating the sale proceed towards the decree amount in case the defendants failed to pay the decree amount within time. The plaintiff has also prayed for passing of a personal decree against defendants 1 to 5 in case the sale proceeds found insufficient for the decree amount.

(2.) The case of the plaintiff as seen from the plaint is briefly stated hereunder :- The plaintiff is a Banking company as defined under the Banking Regulation Act, 1949 carrying on business with Head office at Trichur and Branch office among other places including the one at Door No. 105, Mount Road, Madras-2. The first defendant is the sole proprietor of M/s. Plastic Crafts, a small scale industry at Madras.The first defendant had applied to the plaintiff Bank for the grant of Term Loan to the tune of Rs. 2 lakhs and also cash credit facilities upto a limit of Rs. 2 lakhs to be utilised as working capital for the new small scale industry for the manufacture of plastic goods. Pursuant to the request, the plaintiff Bank sanctioned a Term Loan to the tune of Rs. 2 lakhs and also cash credit facility up to the tune of Rs. 2 lakhs on 22-10-80. It was agreed inter alia between the plaintiff and defendants 1 to 3 that documents relating to the two loans have to be signed by the defendants 1 to 3 and that the third defendant had agreed to stand as a guarantor for and on behalf of the first defendant for the two loans sanctioned. The defendants 1 and 2 had executed a promissory note for Rs. 2 lakhs on 23-12-80 in favour of the plaintiff Bank, agreeing to pay interest at 11.85 per cent per annum with quarterly rest towards the Term Loan. The defendants 1 to 3 had also executed other documents on 23-12-80 such as instrument of pledge of machineries, Trust letter, Deed of pledge, Deed of pledge for advances against the furniture and also Term Loan agreement. The said documents have been signed by the defendants 1 to 3 and all of them knew fully well about the contents of those documents and also the purpose for which those documents were executed in favour of the plaintiff bank. The first defendant failed to repay the amount as agreed to. The total amount payable by the defendants towards the said two loan accounts comes to Rs.6,73,577.01 including interest as agreed by them and calculated up to 19-12-83. The plaintiff has therefore filed the suit for recovery of the said amount.

(3.) Second defendant filed a written statement wherein it is stated that he never stood as a guarantor for and on behalf of the first defendant in respect of the alleged facilities stated to have been given to him by the plainiff bank. He never agreed to do so. The 2nd defendant never agreed for advancing loans by the plaintiff who ought not to have sanctioned any loan to the first defendant on the basis of the guarantee alleged to have been given by him. The 2nd defendant never signed or executed either promissory note or any other deed including mortgage deed. He never signed in any promissory note on 23-12-80 or any guarantee letter etc., as alleged in favour of the plaintiff for the purpose of advancement of cash credit limit loan by the plaintiff to the 3rd defendant. He has not signed or executed any hypothecation (goods) agreement on 23-12-80 or promissory note on 4-10-80 as claimed. All the signatures alleged to have been signed by the 2nd defendant in the documents are all clear forgeries. The second defendant is not at all connected with the suit transactions; accordingly prayed for dismissal of the suit. Though 4th defendant has also filed a written statement, in view of the issue which we are going to consider in this appeal, it is unnecessary to refer the same.