GOLLAMUDI SIVA KUMARI Vs. INDIAN OVERSEAS BANK GUNTUR

JUDGEMENT

(1.) Defendants 1, 2 and 6 in O. S. No. 150/1970 on the file of the Subordinate Judges Court, Guntur, are the appellants in this appeal. The plaintiff-1st respondent, Indian Overseas Bank, laid the suit for recovery of Rs. 70,046-70 ps. due under a mortgage.

(2.) The case of the plaintiff is as follows: The 1st defendant is the wife of one late Gollamudi Madana Mohana Rao, and 2nd defendant is the son, the 6th defendant is the daughter, the 3rd defendant is the mother and the 4th defendant is his brother. Madana Mohana Rao approached the plaintiff-Bank for a cash credit facility of Rs. 65,000.00 for making additions and improvements to his hotel building Durga Bhavan situated in the 3rd line, Brodipet, Guntur-2. The loan was sanctioned on 8-10-1969 and the same was repayable in monthly instalments of Rs. 1,500.00, commencing from the month of March, 1970. Defendants 4 and 5 stood as sureties. Madana Mohana Rao executed promissory notes on 8-10-1969 for a sum of Rs. 65,000.00 with interest thereon at the rate of 91/2% and defendants 4 and 5 signed the guarantee on the same day jointly and severally guaranteeing the payment of debt. On the same day Madana Mohana Rao and his brother the 4th defendant deposited the title deeds creating a security for the money advances made or to be made to the debtor, thereby constituting an equitable mortgage, Madana Mohana Rao opened an account and withdrew the money from time to time. Unfortunately he died in an accident in the month of February, 1970 leaving behind defendants 1 to 3 and 6. As nobody paid the monthly instalments after his death, the plaintiff Bank issued registered notice to the defendants. Defendants 1 and 2 replied on 20-8-1970 stating that the 2nd defendant was a co-parcener of the joint Hindu family consisting of Madana Mohana Rao and himself, that the 2nd defendants share in the joint family properties cannot be mortgaged and that the debt incurred by Madana Mohana Rao was not binding on him. The plaintiff Bank, therefore, filed the suit for recovery of the money due, against all the defendants.

(3.) Defendants 1 and 2 filed a common written statement stating that the 2nd defendant and Madan Mohan Rao constituted joint Hindu family owning valuable large properties. Madana Mohana Rao was young and inexperienced and contacted several vices. His family was an agricultural family all along and it had nothing to do with the hotel business. The 4th defendant with ulterior motive contracted the loan from the plaintiff Bank and after the sudden death of Madana Mohana Rao the 4th defendant, to the detriment of the other defendants, took away all the account books etc. The joint family of Madana Mohana Rao did not derive any benefit from the transaction of the plaintiff Bank and, therefore, the suit debt is not binding on them. It is also stated in the written statement that Madana Mohana Rao had neither authority, nor power to commence any speculative business like the hotel business and bind the joint family with the debts said to have been incurred for the hotel business.