SUBBA RAO V Vs. INDIAN BANK

JUDGEMENT

(1.) The defendant in O.S. No. 67 of 1976 on the file of the Subordinate Judge at Gudivada is the appellant. A preliminary decree for recovery of Rs. 80,379-89 paise has been passed against him.

(2.) The respondent-Bank filed the suit O.S.No. 67 of 1976 for the recovery of Rs. 80,379-89 Paise alleging that on 4-6-1969 an overdraft to the extent of Rs. 50,000/- was sanctioned by the respondent-Bank in favour of the appellant- defendant who executed a pronote for Rs. 50,000/- as a collateral security. He also agreed to pay interest at the rate of 5% per annum over and above the rate of interest of Reserve Bank of India. On the same day, he opened his account with the respondent-Bank and borrowed a sum of Rs.10,000/- He also executed a letter of continuity on the same day in favour of the respondent-Bank confirming the overdraft agreement arrived between them. On 9-6-1969, the appellant-defendant deposited his title deed in respect of the house in question creating an equitable mortgage in favour of the respondent-Bank. He also issued a covering letter confirming the creation of equitable mortgage. He renewed the pronote on 21-8-1971 and again on 14-6-1973 and agreed to repay with interest as agreed. He also acknowledged his liability in writing vide pronotes dated 21-8-1971,14-6-1973 and 6-8-1974. The repayments made by the appellant-defendant were appropriated by the respondent-Bank towards the interest due. The respondent-Bank is entitled to claim Rs. 80,379-89 paise including interest from the appellant-defendant because he has failed to pay the amount in spite of demands.

(3.) The appellant-defendant, through his written statement, denied to have created equitable mortgage of his house in question. He pleaded that the covering letter has not been registered through which the equitable mortgage was created and, therefore, it is inadmissible in evidence. Similarly, the letter of continuity is inadmissible in evidence because it is neither properly stamped nor registered. He is an agriculturist and, therefore, he is entitled to claim benefit under the provisions of the Madras Agriculturists Debt Relief Act (for short 'M.A.R. Act'). The interest charged is usurious and, therefore, the appellant-defendant is entitled for reopening the account and scaling down the quantum of interest. Actually he was made to sing in routine way letters without telling him the rate of interest and the contents therein.