STATE BANK OF INDIA Vs. SAJITA ENGINEERING WORKS

JUDGEMENT

(1.) This is an appeal by the plaintiff a bank in a suit for realisation of loan amount as the trial Court did not make the guarantor jointly and severally liable with the debtor.

(2.) . Plaintiff bank is a creature of statute under the State Bank of India Act, 1955. Proprietor of defendant No. 1 applied for loan and defendants Nos. 2 and 3 by separate letters agreed to be guarantors for the proprietor. On that basis, cash credit loan to the extent of Rs. 1,40,000/- was granted to the proprietor. Terms and conditions were accepted by all the three. Proprietor of defendant No. 1 executed a demand promissory note on 10-2-1981 in favour defendants Nos. 2 and 3 who endorsed the same in favour of plaintiff. An agreement for cash credit was executed by Proprietor of defendant No. 1. Defendants Nos. 2 and 3 also executed a deed of guarantee on the same day. Proprietor operated the cash credit transaction. However, he did not pay the dues for which suit was filed to recover Rs. 1,76,193.31 paise with pendente lite and future interest.

(3.) Defendants Nos. 1 and 3 filed a joint written statement. They did not specifically dispute assertions of plaintiff. Since the industry was sick they requested for payment by instalments.