V THULASI Vs. INDIAN OVERSEAS BANK

JUDGEMENT

(1.) Being aggrieved by the order dated 5.3.2007 allowing Application No. 3294 of 2006 filed Under Order 7 Rule 11(d) Code of Civil Procedure read with Order 14 Rule 8 of Original Side Rules and thereby rejecting the suit - C.S. No. 265 of 2006, Appellant/ Plaintiff has preferred this appeal.

(2.) The background facts of the appeal and suit - C.S. No. 265 of 2006 are as follows:

(3.) The 1st Defendant was originally a partnership firm under the name and style of M/s. Balaji Fashions. In May, 2003, a cash credit limit of Rs. 50 lakhs was sanctioned to the said Balaji Fashions and the same was not availed by the said firm. The business of the said Balaji Fashions was closed and its assets and liabilities were transferred to the 1st Defendant - Cavin Cally Fashions (India)Pvt. Ltd. By sanction letter dated 4.6.2004, the Bank had sanctioned cash credit limit of Rs. 55 lakhs to the 1st Defendant. For the cash credit facility availed by the 1st Defendant, the Plaintiff stood as guarantor and the plaint schedule property was also under the equitable mortgage to the Bank to secure the outstanding in the Liquirent loan. According to the Bank, the Plaintiff and the 1stDefendant agreed that the residual value of the plaint schedule property has to betaken as a collateral security for the cash credit limit sanctioned to the 1stDefendant. In pursuance of the same, the Plaintiff is stated to have authorised the Bank to continue to hold the documents already deposited by the Plaintiff on18.5.2004 as security to the cash credit limit availed by the 1st Defendant also. On 17.6.2004, the Plaintiff confirmed the said constructive deposit of title deeds in writing. The 1st Defendant operated the cash credit account for its business needs.