CENTRAL BANK OF INDIA Vs. PRAJAPAT SINGH

JUDGEMENT

(1.) PLAINTIFF , a Nationalised Bank, is dissatisfied with the judgment and decree, dated 18.12.1990, passed by learned 1st Additional District Judge, Mandsaur, in Civil Suit No. 16 B/88. Thus, to get rid of such judgment and decree the plaintiff has filed the present first appeal under section 96 of C.P. Code before this Court. Facts in brief which lead to filing of the suit and the appeal need mention. Appellant is the plaintiff and respondents are defendants.

(2.) APPELLANT brought the suit against the respondents (defendants) for the recovery of Rs. 36,026/ . Suit was founded on the allegation inter alia, that defendant No. I on 3.10.1985 applied to the plaintiff bank for grant of loan for running a business. Plaintiff bank sanctioned and paid a sum of Rs. 35,000/ to the defendant No. 1. It was alleged that in lieu of the loan taken, the defendant No. 1 executed certain documents whereas defendants No. 2 and 3 stood as guarantors and signed the guarantee deed in favour of the plaintiff bank. It was alleged that defendant No. 1 was to pay a sum of Rs, 5,000/ per month and this monthly instalment was to be payable w.e.f. January, 1986. It was further agreed that defendant No. 1 will pay interest at the rate of 12% per annum with half yearly rests. It was alleged that though defendant No. 1 took loan and executed all necessary documents such as guarantee deed, mortgaged deed etc. but did not pay the money despite giving them notice by the plaintiff Bank on 17.9.1988, and hence suit was filed for the recovery of Rs. 36,026/ against all the three defendants. The defendants denied the transaction and urged that they had not executed any guarantee deed in favour of the plaintiff Bank. On the basis of these pleadings, issues were framed. Parties led evidence. Eventually the trial Court decreed the suit filed by the plaintiff, amounting to Rs. 36,026/ together with interest payable thereon in terms of the agreement. However, learned trial Judge dismissed the suit as against defendants No. 2 and 3. It is this decree of dismissal as against defendants No. 2 and 3 which is challenged in this appeal by the appellant.

(3.) THE main submission of learned counsel for the appellant is that trial Court committed a mistake in dismissing the suit as against defendants No. 2 and 3, i.e., guarantors. It was the submission of learned counsel for the appellant that once the agreement was signed by the defendants, then liability of principal borrower being co extensive to that of defendants No. 2 and 3 (guarantors), decree had to follow jointly and severally against all the three defendants which obviously included the principal borrower and the guarantors. It was, therefore, submitted that decree should be passed also against the defendants No. 2 and 3. Learned counsel for the respondents supported the view taken by the learned trial Judge and accepted the judgment in its entirety.