LOKAM RAMACHANDRA RAO Vs. BANK OF BARODA

JUDGEMENT

(1.) Heard the learned Counsel on both sides.

(2.) The first defendant is the appellant. The suit was filed by the first respondent, Bank of Baroda, Guntur Branch, for recovery of a sum of Rs.22,295.55 being the amount due towards the loan sanctioned by the plaintiff to the first defendant for the purchase of a tractor. The second defendant was the guarantor. The amount of loan sanctioned was Rs.34,000.00. The first defendant executed a demand promissory note for the said amount in favour of the Bank. He also executed a hypothecation bond hypothecating the tractor. For due repayment of the loan with interest, costs and other charges, the first defendant has also executed the registered mortgage deed dated 4-5-1974 mortgaging the properties shown in the schedule. It appears that the second defendant subsequently took over the tractor from the first defendant and sold away the tractor. The second defendant made certain payments to the plaintiff-bank towards the loan. As the balance was not paid, the suit was filed. An ex parte decree was initially passed on 18-6-1983. But the same was set aside on 14-7-1997 on an application filed by the first defendant and the suit was restored to file. Thereafter the first defendant filed a written statement contending, inter alia, that with the consent of the plaintiff the second defendant took over the liability under the suit transaction as the tractor was taken over by him and as such the plaintiff cannot claim any relief as against the first defendant, that the defendants paid more than Rs.60,000.00 towards the suit transaction by 4-1-1980, that the plaintiff is not entitled to collect more than the principal towards interest, that the plaintiff is entitled to collect only 11% simple interest and that the plaintiff has to deduct Rs.10,000.00 as the defendants are entitled to the benefit of ARDR scheme.

(3.) Dl also filed a memo stating that D2 died on 17-12-1995.