BANK OF MADURA LIMITED Vs. G K SETHURATHINAM

JUDGEMENT

(1.) A money suit has been decreed ex parte against the 1st, 3rd and 4th defendants jointly and severally and dismissed on contest against the 2nd defendant by a learned single Judge of this Court in C.S.No.47 of 1997. The plaintiff has appealed against the said judgment, insofar as its claim against the 2nd defendant is concerned. No appeal, however, has been preferred by any of the judgment-debtors (defendants 1, 3 and 4). The admitted case, however, of the parties has been as follows: The plaintiff is a banking institution having its registered office at Madurai. The 1st defendant has been a producer of films. He obtained a loan sanctioned for a sum of Rs. 5,00,000 repayable in 12 monthly instalments with interest thereon at 11% over the Reserve Bank rate of interest subject to a minimum of 20% per annum from the plaintiff-appellant and executed a promissory note on 6.2.1975 on which date he received a sum of Rs.25,000. He also executed a hypothecation deed hypothecating his rights in the said picture, the negatives, the release prints and other materials. He received a further amount of Rs.95,000 on 7.2.1975 and another sum of Rs. 1,00,000 on 12.3.1975 from the plaintiff. The 2nd defendant/respondent is the brother of the 1st defendant.

(2.) ACCORDING to the plaintiff, the 2nd defendant stood guarantee for the due repayment of the said sum by his letter dated 11.5.1975. In June, 1975 the 1st defendant approached the plaintiff for a further advance of Rs.3 lacs. It was sanctioned on 14.6.1975 by the plaintiff and made available to the 1st defendant in June, 1975. The 1st defendant executed a promissory note on 14.6.1975 for the said sum of Rs.3 lacs promising to repay the same with interest at 11% over and above the Reserve Bank rate of interest subject to a minimum of 20%, By way of security for the loan, he hypothecated the negatives, release prints and other materials connected with the picture and executed a hypothecation deed dated 14.6.1975.

(3.) ALLEGING that loans were not repaid although the picture was released and that there were some other creditors who filed suits in respect of their claims against the 1st defendant, the plaintiff filed the suit alleging as on 23.1.1977, a sum of Rs. 6,87,484.34 in respect of the first loan and a sum of Rs. 4,87,618.76 in respect of the second loan became due, that is to say, in all Rs. 10,94,103.10.