BANK OF BARODA Vs. PERCHEM INDUSTRIES

JUDGEMENT

(1.) THE aforesaid two appeals arise from a common judgment and, therefore, they are heard and disposed of together.

(2.) TWO Civil Suits were filed by the appellant Bank against the same set of respondents. They were registered as Special Civil Suit No. 167/79 and 168/79. The first respondent in either of the two suits is a partnership firm dealing in the business of manufacturing aromatics and allied chemical having its factory at Hingna Road, Nagpur. The respondent Nos. 2 to 6 are the partners of the firm. The respondent No. 2 is the Managing Partner of the firm.

(3.) THE first respondent approached the appellant Bank for financial assistance upto a limit of one lakh for erection of the factory and for purchase and installation of machinery. After due scrutiny and verification of the requirements of the first respondent, sanctioned a term loan of Rs. 30,000/- against the equitable mortgage of the plot and building and Rs. 70,000/- against the hypothecation of machinery on 10-8-1974. The first respondent and respondent Nos. 2 to 6 executed a demand promissory note agreeing to pay jointly and severally a sum of Rs. 70,000/- with interest at 4 per cent over and above the Reserve Bank rate with minimum of 11% per annum with monthly rests. An agreement of hypothecation also came to be executed. In consideration of the facilities granted, one Jaywant Ramchandra Deshpande, the father of respondent No. 2, executed a letter of guarantee in favour of the Bank. The said guarantor expired prior to the filing of the suit leaving behind respondent No. 2 and respondent Nos. 7 to 10 as legal heirs, in possession of the property left by the deceased. These respondents are equally liable for the amount claimed in the suit.