JAIRAM P KAMAT Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) THIS appeal is filed by the third defendant against the judgment in Special Civil Suit No. 81/81 decided on 16th July, 1988, whereby the appellant/third defendant was made jointly and severally liable for the decretal amount. The suit was filed by the State Bank of India, Margao Branch, against the defendants. The first defendant is a Company and the second defendant is the Managing Director, the third defendant is the Executive Director and the fourth defendant is the Director of defendant No. 1. The suit is for recovery of an amount of Rs. 2,00,593. 83 p. According to the plaintiff/ respondent No. 1 in 1976 it had granted a Cash Credit Loan with a limit of Rs. 1,00,000/- secured by stocks for working capital purposes. After sometime, the first defendant Company requested to put their accounts under Banks rehabilitation programme to enable them to tide over the financial crises and to make it a viable unit. The request of the first defendant Company was accepted by the plaintiff. Accordingly, the limit of Cash Credit Advance has been enhanced to Rs. 2,00,000/- and the remaining amount due in the account of the earlier Cash Credit Loan has been converted into a term loan of Rs. 70,000/ -. Accordingly, the Cash Credit Loan was granted on hypothecation of moveables, books, debts and other assets and a supplemental agreement was executed. Ultimately, the defendants committed default in making repayment and the present suit was field for realization of that amount. The defendant No. 3 alone challenged the decree in this appeal. His specific case is that he stood guarantee only for Cash Credit Loan and in respect of other term loan he is not liable. Another plea among other pleas of the third defendant is that the securities furnished by the first defendant for the Cash Credit Loan have been lost by the fault of the plaintiff and therefore his agreement of guarantee executed by him cannot be enforced in realization of the amount from the third defendant. He also says that there is no consideration for the guarantee given by him.

(2.) ON a cursory reading of the judgment it appears to us that none of the pleas taken specifically by the third defendant had been addressed by the Court below. Even specific issue has not been framed in the light of the pleadings. The Court below proceeded on the basis that there is common defence for all the defendants in the suit. In fact, all the defendants, except defendant No. 4 have filed separate written statements taking distinct and different pleas. In some points they are even conflicting each other. None of these aspects have been considered by the Court below which are very vital for the purpose of deciding the case. We need not elaborate the defects that we came across in the judgment either in framing the issue or in conducting the trial as we are intending to remand the case to the trial Court for further trial as far as it relates to the defendant No. 3 is concerned.

(3.) IN the result, the appeal is allowed. The judgment and decree of the Court below are set aside to the extent it relates to the defendant No. 3. The Court below is directed to frame issues afresh in the light of the pleadings of the defendant No. 3 and decide the matter afresh according to law. The parties are at liberty to lead further evidence on the issues to be framed. Since the matter is of 1981, we direct the lower Court to dispose of the suit by 30th June, 1997. Parties are directed to appear before the trial Court on 10th January, 1996, at 10. 30 a. m. for further proceedings in the matter. Appeal allowed.