JAYANT T SHAH Vs. ANDHRA BANK LTD

JUDGEMENT

(1.) This appeal is filed by the 3rd defendant against the decree in O.S. No. 516 of 1972 on the file of the 1st Additional Judge, City Civil Court, Hyderabad.

(2.) The Andhra Bank Limited, the plaintiff, filed the suit to recover Rs. 14,768- 57Ps. with subsequent interest. The 1st defendant is M/s. M. A. C. Industries of which the 2nd defendant, Mrs. Maqbool Fatima, is the proprietor. The 1st defendant had an account with the plaintiff-bank. The 2nd defendant approached the plaintiff in the beginning of April, 1969 to extend the credit facilities to the extent of Rs.20,000 and also wrote a letter to that effect on 5th April, 1969. The 3rd defendant Jayant T. Shah, subsecribed his signature to that letter. After discussion, the 2nd defendant sent a letter dated 9th June, 1969 addressed to the Chairman of the plaintiff-bank requesting for an overdraft facility to the extent of Rs. 20,000. She offered security of two planners with motors, Fiat car, Jawa motor-cycle and Vespa scooter, of a total value of Rs.33,500. The plaintiff-bank granted overdraft facility. The defendants 1 to 3 executed the necessary documents in favour of the plaintiff including a promissory note dated 18th August, 1969 for Rs. 20,000 repayable with interest at 4l/2 % over and above the Reserve Bank of India rate of interest with a minimum of 9l/2 per annum with quarterly rests. The 3rd defendant also signed all the necessary documents as a co-obligant including the aforesaid promissory note undertaking joint and several liability along with the 2nd defendant and further signed a letter dated 18th August, 1969 in the printed form to the effect that the amount Rs. 20,000 might be paid to the 1st defendant. The 2nd defendant operated the account and drew the money as sanctioned by the plaintiff. The plaintiff called upon the defendants several times both orally and in writing, to adjust the amount but they did not pay the amount. Towards the end of November, 1970 the plaintiff wrote to the first defendant that the facility fell due on 18th August, 1970. Repayment due thereon was Rs. 19,995-06. The 2rd defendant sent a letter to the plaintiff -bank, dated 29th January, 1971 promising to repay the amount and requesting for further time. The plaintiff again wrote another letter, dated 12th April, 1971 intimating the balance then due. The plaintiff wrote another letter, dated 14th August, 1971 to the 2nd defendant intimating that a sum of Rs. 21,237-37 Ps. was due and it was noticed that the 1st defendant-factory was not working and the defendants should adjust the amount within 7 days from the date of the receipt of the letter. A copy of that letter was also sent to the 3rd defendant. Still they did not pay. The 2nd defendant gave a reply stating that some more time might be given for payment. The 3rd defendant did not give any reply. Subsequently on 31st August, 1971, the plaintiff addressed another letter to the 1st defendant informing the 2nd defendant that no further extension of time would be granted. Still there was no payment. Again on 4th February, 1972, the plaintiff issued a notice through a lawyer calling upon them to adjust the amount completely within 3 days after the receipt of the registered notice failing which the hypothecated goods would be seized and sold under the hypothecation agreement. The 3rd defendant was also similarly called upon to adjust the amount failing which appropriate legal steps would be taken and a copy of the registered notice sent by the plaintiff's lawyer to the 1st defendant was enclosed for reference. That registered cover was returned unserved with the postal endorsement "refused". The plaintiff seized the Fiat car No. 5522, which was hypothecated to the bank and ultimately sold it for Rs. 9,500 and credited it on 16th February, 1972 to the account of the defendants. Thus as per the account, on the date of the plaint, the defendants had to pay a sum of Rs. 14,768-67 Ps. for which the present suit is filed. In the plaint it is stated that the 3rd defendant is liable to repay the entire debt due to the plaintiff along with defendants 1 and 2 since he is a co-obligant and undertook joint and several liability for this amount.

(3.) In this case, I need not refer to the written statement filed by the defendants 1 and 2. They have not filed appeals. In the written statement filed by the 3rd defendant the appellant herein, he has stated that he merely attested all the documents as a witness but not as a co-obligant. He has further stated that the defendants 1 and 2 have hypothecated items 1 to 4 out of which only one item was seized and sold by the plaintiff and the value of the other items is more than sufficient to meet the claims of the plaintiff.