GOPAL CHANDRA BAGARIA Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) Defendant No. 2 is appellant against a decree making him jointly and severally liable for the amount decreed.

(2.) Plaintiff is a Bank constituted under the State Bank of India Act having a branch at industrial estate, Rourkela. On 17-12-1982 plaintiff sanctioned a sum of Rs. 1,10,000/-by way of cash credit Mandi facility and Rs. 79,000/- by way of cash credit bill facility to defendant No. 1. Defendant No. 2 stood guarantee for the amounts to be advanced and both defendants Nos. 1 and 2 executed required documents. Defendant No. 1 secured the loan facility by pledging of goods, both raw materials i.e. different chemicals, finished goods and merchandise. When relationship so continued, defendant No. 1 defaulted in making payments. Notice to him by plaintiff remained unreplied. Hence, suit has been filed for recovery of the amount due including interest at the rate of 14 per cent per annum for a sum of Rs. 91,762.37 with pendente lite and future interest. 2A. Defendant No. l did not contest. Case of defendant No. 2 is that he only signed blank form since defendant No. 1 was his close friend who brought those forms. He denied to have executed any promissory note or to have executed any delivery letters. His specific case is that pledged goods were not insured though required under the contract. Since plaintiff did not take adequate care in respect of the goods, the same were lost and accordingly, he is not liable as guarantor which stood discharged.

(3.) Plaintiff examined two witnesses and proved documents marked as Exts. 1 to 41 series in support of his case. Defendant No. 2 examined two witnesses only. On the basis of these materials trial Court held that defendant No. 1 had taken loan and is liable as claimed in the suit. Trial Court has further held that defendant No. 2 executed the necessary documents and became the guarantor. As regards discharge of liability of defendant No. 2, trial Court held that in absence of evidence that goods hypothecated have been lost on account of plaintiff, defendant No. 2 is liable. This is the grievance of defendant No. 2 in this appeal.