STATE BANK OF INDIA Vs. RAMAYANAPU KRISHNA RAO

JUDGEMENT

(1.) Reversal of success by the learned District Judge, Koraput, Jeypore, has brought the State Bank of India (described for convenience as the 'plaintiff') before this Court. The suit is one for recovery of money based on a demand promissory note.

(2.) The facts position presented by the parties essentially is as follows: First the plaintiffs stand. Plaintiff, a banking company constituted under the State Bank of India Act, 1955, having one of its branch office at Gunupur in the district of Koraput, had advanced loan to the defendants-respondents in this appeal. On being approached by the defendants for loan, cash credit loan of Rs. 4,000/- was sanctioned on 7-6-1977. Defendant No. 1 executed a demand promissory note in favour of defendants Nos. 2 and 3, and the said defendants duly endorsed the said promissory note in favour of the plaintiff-bank on 7-6-1977. Defendants 2 and 3 signed in acceptance of the terms and conditions stipulated in the agreement. Defendant No. 1 hypothecated his stock of goods in favour of the plaintiff-bank by executing the agreement wherein defendants 2 and 3 signed in acceptance of the terms and conditions stipulated therein. On the same day, i.e., 7-6-1977 defendants 2 and 3 also executed a bond of guarantee in favour of the plaintiff-bank. On 20-12-1979, all the defendants acknowledged the liability by executing revival letters. In spite of the revival letters acknowledging liability, the amount having not been paid in spite of demand, the suit was filed for recovery of the sum of Rs.3044.41 paise, which included the outstanding loan with interest, and also pendente lite and future interest on the contractual loan. The agreement for hypothecation is Ext.5 and the letter of revival in Ext.6. Defendants 2 and 3 also executed a letter of revival vide Ext. 7, acknowledging their liability on the demand promissory note. Defendants entered their appearance and filed written statement taking the stand that they had not taken any loan from the plaintiff-bank. The execution of the demand promissory note, deed of hypothecation, agreement for guarantee and letters of revival were denied by them. It was stated that defendant No. 1 applied for loan from the plaintiff-bank, and the staff of the bank took his signatures, and that of other defendants on various papers in a set, and they promised that they would forward those papers to their higher authorities for sanction of loan. In good faith the defendants had signed on printed papers, having some blanks. Defendant No. 1 approached the bank authorities several times to give money, or in alternative to return the papers signed by them. But that was not done, and the suit has been falsely filed.

(3.) The trial Court framed fifteen issues, the important issues being issues Nos. 1 and 2. The first issue was; Whether the defendants have executed the demand promissory note and revival letters? and the second issue was; Whether the defendants have executed guarantee letters and jointly letters and jointly and severally liable for the amount? No witness was examined on behalf of the contesting defendants. In support of its case plaintiff examined two witnesses. The first witness was the Branch Manager and the second witness was the Divisional Manager, Agriculture, State Bank of India, Gunupur. P. W. 1 was admittedly the Branch Manager at the time the promissory note was allegedly executed by defendant No. 1. He proved the signatures of defendant No. 1 on various exhibits by stating that he was acquainted with the signature of defendant No. 1. Relying on the evidence of P. Ws.1 and 2, the trial Court came to hold that the promissory note had been duly executed, and the same was binding on the defendants, and the defendants were jointly and severally liable. Accordingly the suit was decreed. Being aggrieved by the said judgment and decree, an appeal was filed before the learned District Judge, Koraput, Jaypore. The learned District Judge on reassessment of evidence, came to hold that the demand promissory note and the signature of defendant No. 1 thereon had not been duly proved. He also held that the certified copy of the ledger account (Ext. 2) was not proved. Accordingly the suit was dismissed, and the appeal was allowed. Being aggrieved by such judgment and decree, the present second appeal has been filed under S.100 of the Code of Civil Procedure, 1908 (in short, the 'Code').