UNION BANK OF INDIA Vs. POTHINENI NARAIAH

JUDGEMENT

(1.) The appeal is filed by Union Bank of India, Pamarru, represented by its Branch Manager, aggrieved by the judgment and decree of the Court below on the ground that the defendants/ respondents are entitled to the benefits of the provisions of A.P. Agriculturists Debt Relief Act, 1938 (in short called as Act IV of 1938).

(2.) The Appeal is dismissed for default against Respondent No.2. The appellant/ plaintiff filed O.S.No.13 of 1986 on the file of the Subordinate Judge, Addanki. The Suit was filed for recovery of Rs.50,574.10 ps., by sale of the plaint schedule lands mortgaged by the first defendant by passing a preliminary decree with an interest as claimed by the appellant/plaintiff.

(3.) It is pleaded by the appellant- plaintiff Bank that the 1st respondent/1st defendant approached the plaintiff for agricultural crop loan and he mortgaged the plaint schedule lands by executing a simple mortgage deed dated 22.8.1973 for Rs.10,000/- and it is a continuing one for the amounts borrowed and to be borrowed from the plaintiff-bank and on 26.7.1976 he availed Rs.7,000/- and on 20.9.1976 he availed Rs.3,000/- and executed demand promissory notes for the said amounts agreeing to repay them with interest at 3 1/2% p.a., over and above the bank rate with a minimum of 12 1/2% p.a., with half yearly rests. It is also pleaded that he agreed to discharge the loans on or before 31.5.1979 and on failure, to pay additional interest at 2% p.a. and he failed to repay the loan amounts. It is also pleaded that on 8.2.1978, he applied for conversion of the above loan into a medium term loan payable before May, 1979 and his request was considered accordingly. On 23.10.1978 he verified his account and found that Rs.10,825.00 was due to be payable by him and he executed a promissory note for that amount agreeing to repay it with interest at 13% p.a., with half-yearly rests and on failure to pay it by 31.5.1979, to pay additional interest at 2% p.a. and he executed an agreement of hypothecation of standing crops. Defendants 2 and 3 executed an indemnity and guarantee agreeing themselves as sureties for the due discharge of the said loan. The 1st defendant applied for a further loan of Rs.7,000/- and it was sanctioned in Account No.AG.STC.3035/78, which was opened in the name of the 1st defendant. The 1st defendant availed the loan by withdrawing Rs.5,000/- on 26.10.1978 and Rs.2,000/- on 14.11.1978 and by executing Promissory Notes agreeing to repay the amounts with interest at 13% p.a., with half-yearly rests. He agreed to discharge the loan on or before 31.5.1979 and on failure, to pay additional interest at 2% p.a., and he executed an agreement of hypothecation of standing crops. Defendants 3 and 4 stood as guarantors to him by executing an indemnity and guarantee agreement. As the 1 st defendant was given an additional loan limit upto Rs. 15,000/- he execute another simple mortgage deed dated 7.10.1978 creating hypothecation over the plaint schedule land and he failed to repay the amounts. Hence this siut was filed.