UNION BANK OF INDIA Vs. AVINASH P BHONSLE

JUDGEMENT

(1.) THIS appeal by the original plaintiff is directed against the decree dismissing the claim insofar as it was made against the defendant No. 3 who is alleged to have been a guarantor for the payment of the loan advanced by the plaintiff to the defendants Nos. 1 and 2, a decree having been passed against the defendants Nos. 1 and 2 in the sum of Rs. 60,221. 95 with interest at the rate of 17 per cent per annum from 18th of March, 1980. The case of the plaintiff was that a loan of Rs. 37,000/- was advanced to the defendants Nos. 1 and 2 on August 29, 1977 for the purpose of purchasing one Tempo Matador Diesel Van to be utilized in their business and a cash credit limit up to Rs. 7,500/- was also granted. On August 29, 1977 the defendants Nos. 1 and 2 executed a promissory note and a hypothecation bond against the amount of Rs. 37,500/- paid in cash. The third defendant in consideration of the plaintiff having agreed to grant accommodation to the first and second defendants, executed a letter of guarantee on September 14, 1977 binding himself to the extent of Rs. 45,000/- and interest on such amount. Since no repayments were made the plaintiff claimed Rs. 60,221. 95 together with interest of the rate of 17% per annum from March 1980. The defendants Nos. 1 and 2 did not appear and an ex parte decree was passed against them to the extent of the claim.

(2.) THE third defendant denied that he had become a guarantor for the defendants Nos. 1 and 2 or that he was in any way concerned with the loan granted to them. He denied having executed a letter of guarantee on September 14, 1977. He contended he signed the letter of guarantee on account of misrepresentation and it could not be enforced against him as it was without any consideration.

(3.) THE learned trial Judge accepted the third defendants contentions and dismissed the suit.