STATE BANK OF INDIA ITS BRANCH MANAGER TIRUPATTUR Vs. KASIM PROPRIETOR M/S KASIRA STORES BIG BAZAAR ST TIRUPATTUR RAMANATHAPURAM DT

JUDGEMENT

(1.) THE plaintiff which failed in its attempt to get decree against the defendants in the suit in O.S.No. 17 of 1982 on the file of the Sub-Court, Sivaganga, has filed the above Appeal.

(2.) THE plaintiff filed the above suit on the basis that the 1st defendant sought for Cash Credit Facility to an extent of 12, 000 which was sanctioned by the plaintiff. THE 2nd defendant had agreed to be the guarantor for the 1st defendant. THE 1st defendant executed a demand promissory note in favour of the 2nd defendant for a sum of Rs.12, 000 on 28.2.1975, promising to pay him or order at the State Bank of India, Tirupattur, the above sum of Rs.12, 000 with interest at half percent, over and above the advance rate with a minimum of 14% per annum with monthly rests. THE 2nd defendant in turn had made and endorsement on the back of the promissory note "pay" State Bank of India or order and handover the same to the plaintiff. THE 1st defendant had also executed an agreement for the said facility on 28.2.1975, on security of pledge of goods purchased and merchandised for the said sum of Rs. 12, 000. On the same date the 2nd defendant as guarantor for the 1st defendant had executed a deed of guarantee in favour of the plaintiff. THE 1st defendant had also deposited the title deeds relating to the plaint schedule property with the plaintiff on 24.3.1977 with intent to create an equitable mortgage over the same as collateral security for the loan granted to him by the plaintiff. According to the plaintiff, the 1st defendant had executed revival letters dated 28.1.1978 and 26.1.1981 acknowledging his debt due by him to the plaintiff. THE 2nd defendant also has executed similar letters. In spite of demands, since the defendants did not re-pay the loan, the plaintiff has filed the above suit.

(3.) THE learned counsel appearing for the 2nd respondent/2nd defendant has submitted that the plaintiff cannot enforce the guarantee against the 2nd defendant as they have not enforced the mortgage security, though the plaintiff obtained the decree in their favour. According to the learned counsel, no application for final decree was filed so far by the plaintiff and so they have failed to enforce the security, and, also, they have lost their right to enforce the said security. On that basis the learned counsel has further submitted that the plaintiff have lost their right to enforce the guarantee also.