SITARAM Vs. UNION OF BANK OF INDIA

JUDGEMENT

(1.) THE appellant/defendant No. 2 preferred this appeal against the judgment and decree passed on 22.8.1989 by Third Additional District Judge, Sagar, in Civil Suit No. 7-B/87 by which the suit of respondent No. 1/plaintiff for recovery of Rs. 55,600.95 along with interest was decreed against the defendants.

(2.) AS per plaintiffs case, the defendant No. 1/respondent No. 2 took a loan of Rs. 20,000/- from the plaintiff-Bank at the rate of 12.5% interest per annum and he executed the D.R Note. The appellant and Channulal Namdeo stood guarantor for this loan. On 1.12.1984, the stock of wood was burnt and that Is why on the request of borrower, a new limit of Rs. 20,000/- was sanctioned by the Bank on 3.12.1984. He also executed a hypothecation deed on 3.12.1984 and the appellant and his father Channulal again stood guarantors for the loan. Thereafter, the borrower failed to repay the amount and the suit was filed. All the defendants admitted the execution of documents but they raised an objection with regard to rate of interest and it is further stated that the plaintiff got insured the Saw Mill and its stock and before expiration of that insurance policy, the stock of wood was burnt therefore, the Insurance Company becomes a necessary party.

(3.) THIS appeal has been filed by the guarantor/defendant No. 2 on these grounds that the stock of wood was got insured by the plaintiff with New India Insurance Company and therefore, the Insurance Company is liable to pay the amount and for that, the Insurance Company is a necessary party. Channulal, the other guarantor expired and no legal representatives were brought on record and as such, the whole suit was abated. There is no liability of the appellant for payment of amount. The learned trial Court has wrongly shifted the burden of proof on the defendants with regard to insurance of the Saw Mill.