S R SUBRAMANIAM Vs. SYNDICATE BANK

JUDGEMENT

(1.) THIS appeal has been directed against the decree and Judgment in O.S.No.274 of 1987 on the file of the Court of Additional Subordinate Judge, Salem.

(2.) THE averments in the plaint sans irrelevant particulars are as follows: In the year 1980, the defendant had obtained the following loan limits sanctioned by the plaintiff. 1) Rs.10,000/- at 12% p.a interest on hypothecation of stock-in-trade without margin 2) a sum of Rs.1,00,000/- as general loan on an interest of 12 -% p.a. on a pledge of raw materials without margin3) A sum of Rs.1.8 Lakhs with interest at 12.5% p.a to enable discounting of bills accompanied by railway receipts and lorry receipts and also bills drawn on Government, semi-Government and reputed public limited companies, accompanied by inspection notes and delivery challans. THE bills to be discounted should be honoured within 45 days. THEre was a repayment holiday for the first six months from the date of loan and the payment was expected at Rs.8,000/- per month from March 1981 to May 1981. In the second year, the repayment should be Rs.8,500/- per month. In the third year the payment should be Rs.9,000/- per month. In the fourth and fifth years, the payment should be Rs.11,500/- per month. In the sanction letter various conditions which should be adhered to by the defendants have been laid and a copy of the said order has been given to the defendant. THEreafter, the defendant has been operating all these facilities for which by way of security the defendant has also executed a promissory note for Rs.1,00,000/- on 26.12.1980 whereby the defendant agreed to repay the amount due with interest at 4.5% per annum over and above the Reserve Bank of India rate subject to a minimum of 13.5% per annum compoundable once in three months viz., on the 31st March , 30th June ,30th September and 31st December of each year. As per accounts maintained by the plaintiff's bank, the amount due from the defendant as on 24.4.1987 comes to Rs.2,75,002/23ps. THE defendant has also executed written acknowledgment of debts on 23.12.1983 and 18.4.1985. Hence the suit.

(3.) HEARD the learned counsel appearing for the appellant and also learned senior counsel appearing for the respondent and considered their respective submissions.