INDIAN BANK SECUNDERABAD Vs. BOORUGU NAGAIAH RAJANNA

JUDGEMENT

(1.) The appeal arises out of the suit in O.S. No. 322 of 1983 on the file of the Additional Chief Judge, City Civil Court, Hyderabad. The plaintiff is the appellant. The suit was filed for recovery of Rs. 3,00,067-40 Ps.

(2.) The averments of the plaint in brief are as follows :-The defendant No. 1 is a partnership firm and defendants 2 to 11 are the partners. The first defendant obtained Documentary Bills purchase facility for the business up to a limit of Rs. 2,50,000.00 in the year 1971 and executed promissory notes, a letter of continuity and an Agreement for Bills purchase facility as Collateral Security for the repayment of amounts due to the plaintiff bank. The Bills Purchase facility was renewed from time to time. In the course of transactions between the plaintiff and the defendants, the branch office at Madras of the plaintiff bank returned six sets of documents to the plaintiff bank reporting that they were dishonoured by the Drawees (Purchasers) when presented for payment. After the six bills were returned dishonoured, the plaintiff bank addressed a letter dated 25/10/1980 to the defendants by registered post informing them that the abovementioned bills totalling to Rs. 2,02,000.00 with interest thereon were returned unpaid and outstanding in the Bank Books and requesting the defendants to adjust the amounts due. However, the defendants have not discharged the ability. Therefore, on 1/03/1982, a Lawyer's notice was issued demanding a sum of Rs. 2,91,463-25 Ps. as on 28-2-1982 from the defendants in spite of receipt of the notice, the defendants have not paid the amounts. The total amount thus, due from the defendants is Rs. 3,00,067-40 Ps. and the defendants are liable to pay the said amount with interest at the rate of 161/2% p.a. from the date of filing of the suit till the date of realisation.

(3.) The decree set-up by the defendants is one of denial. In addition, it is stated that the plaintiff bank granted Bills discounting facility to M/s. Lokula Kusumaiah and Brothers up to the tune of Rs. 1,50,000.00. The said firm, as and when exceeded their limits, had obtained the additional signature of the first defendant firm as a co-obligant and discounted with the plaintiff bank. Therefore, all the Bills of Exchange filed by the plaintiff bank contain the co-obligant's signature of the firm of M/s. Lokula Kusumaiah and Brothers. The Drawee, Drawer the Purchasers at Madras and the co-obligants M/s. Lokula Kusumaiah are necessary and proper parties to the suit. In the absence of necessary parties, the defendants are exonerated.