PUNJAB NATIONAL BANK Vs. Y VENKATA KRISHNAIAH

JUDGEMENT

(1.) Appellant herein is the Punjab National Bank, represented by the manager. Aggrieved by the partial decree passed in O.S. No. 75 of 1982, by the Subordinate Judge, Nizamabad, on 27/04/1984, the appellant has approached this court in appeal on the grounds mentioned in the memorandum of appeal.

(2.) The brief facts leading to the filing of this appeal can be briefly narrated as follows : The appellant herein was the plaintiff and defendants Nos. 1 and 2 are the principal borrowers. The said defendants Nos. 1 and 2 had approached the plaintiff-bank for cash credit facility to the extent of Rs. 50,000. By negotiation, the plaintiff agreed to give them cash credit facility to the extent of Rs. 50,000 provided somebody stands surety. Accordingly, defendant No. 3 stood a surety (guarantor) for the cash credit facility given to defendants Nos. 1 and 2.

(3.) It further appears from the pleadings on record that the original defendants Nos. 1 and 2 wanted to enhance the cash credit facility from Rs. 50,000 to Rs. 1,00,000, and, therefore, they made a representation to the plaintiff-bank. The plaintiff-bank agreed to enhance the cash credit facility provided defendant No. 3, the guarantor, is prepared to execute and stand as guarantor to the said enhanced facility. But, defendant No. 3 denied to stand as a guarantor for the enhanced facility, and, therefore, defendants Nos. 1 and 2 produced defendants Nos. 4 and 5 as new guarantors and accordingly the cash credit facility was enhanced from Rs. 50,000 to Rs. 1,00,000 by the plaintiff.