STATE BANK OF INDIA NAGERCOIL Vs. MOHAMMED HABHEE

JUDGEMENT

(1.) THE appeal is against the judgment and decree of the court of the Subordinate Judge, Padmanabhapuram in O. S. No. 92 of 1977. THE plaintiff is the appellant.

(2.) THIS is a suit on a mortgage for sale of the mortgage property and for a personal decree against the defendants. The plaintiff, which is the State Bank of India, Nagercoil Branch, granted to the 1st defendant who is a small scale manufacturer of handloom textiles a cash credit special hypothecation advance upto a limit of Rs. 15,000 on 4. 10. 1973. The 1st defendant executed a promissory note in favour of the 2nd defendant guarantor for a sum of Rs. 15,000 agreeing to repay the sum with interest at one per cent below the State Bank of India advance rate with a minimum of eight per cent per annum with monthly rests. The 2nd defendant endorsed the said promissory note in favour of the plaintiff and offered the same as collateral security. The 1st defendant executed an agreement hypothecating the goods, machinery, book debts and other assets stored at the 1st defendant's factory at Vadasery. The 2nd defendant who stood as guarantor, deposited in 4/10/1973 with the plaintiff her title deeds as security for the cash credit facility afforded to the 1st defendant upto a limit of Rs. 15,000. Subsequently at the request of the 1st defendant, the plaintiff enhanced the credit facilities to a limit of Rs. 25,000. A fresh promissory note for Rs. 25,000 was executed by the 1st defendant in favour of the 2nd defendant guarantor and this promissory note was also endorsed by the 2nd defendant in favour of the plaintiff. On 20. 6. 1974, 1st defendant executed an agreement hypothecating the goods, machinery, book debts and other assets. On 20. 6. 1974, the 2nd defendant declared in the presence of the Branch Manager and Field Officers that the benefit to the Bank of the mortgage by deposit of title deeds relating to the plaint schedule properties shall apply for and stand extended to and cover the enhanced aggregate limit of Rs. 25,000. On 20. 1. 1975, the 1st defendant acknowledged in writing that a sum of Rs. 25 ,000. 97 was due from him as on 31. 12. 1974. He has also acknowledged on 7. 12. 1977 that a sum of Rs. 31,027. 35 was due as per the cash credit account as on 31. 12. 1976. According to the plaintiff, a sum of Rs. 34 ,283 is due from the defendants to the plaintiffs as per its accounts. Inspite of notice, the amounts have not been paid. Hence the suit.

(3.) THE only point which arises for consideration is whether the grant of interest by the Court below at 6% per annum from the date of plaint till realisation is correct. POINT: