STATE BANK OF INDORE Vs. MANOJ TRADING SYNDICATE

JUDGEMENT

(1.) The plaintiff- State Bank of Indore ("Bank" for short) has filed this suit against the defendants for the recovery of their outstanding dues in the sum of Rs.65,341.29 and also claimed future interest thereon from the date of suit till realization. The defendant No.1- M/s.Manoj Trading Syndicate is a partnership firm; defendant Nos.2 and 3 are the partners of defendant No.1 firm, whereas defendant No.4 is the guarantor to the suit transactions.

(2.) It is the case of the plaintiff that on or about 6th February, 1982, defendant Nos.1 to 3 in the course of their business applied to the plaintiff- Bank for cash credit limit for the sum of Rs.50,000/-. In consideration of the same, they have executed in favour of plaintiff demand promissory note dated 12th March, 1982 promising to repay the said sum of Rs.50,000/- on demand with interest. On the same day, i.e. 12th March, 1982, they also executed an agreement for pledge of goods under which, they have, inter alia; agreed that in the event of delay or default on their part to abide by the said agreement and, in particular repayment of loan, they shall bear and pay interest at the rate of 16% per annum with quarterly rests. The defendant Nos.1 to 3 continued to enjoy the said facility and renewed the same on 9th September, 1987 for an enhanced facility of Rs.55,000/- with interest at the rate of 13.55% per annum by executing fresh demand promissory note. On the same day, they have also executed in favour of the plaintiff an agreement for pledge of goods.

(3.) The defendant No.4 has also executed in favour of the plaintiff an agreement of guarantee, guarantying repayment of loan advanced to defendant Nos.1 to 3 with interest, costs, charges and expenses jointly and severally along with defendant Nos.1 to 3.