MOHINDER SINGH Vs. BANK OF INDIA

JUDGEMENT

(1.) THIS R.S.A. has been directed against the judgment and decree dated 3.8.1999 passed by the Addl. District Judge, Ferozepur, who, while dismissing the application under Section 5 of the Limitation Act of the appellant, also dismissed the appeal.

(2.) SOME facts can be noticed in the following manner :- Bank of India (plaintiff) advanced a term loan to the extent of Rs. 67,760/- to Mohinder Singh deceased on the guarantee of Mohan Singh, defendant No. 2. This loan was repayable to the bank in 14 half yearly instalments of Rs. 4,840/- each with effect from July, 1996. The defendants also agreed to pay interest at the rate of 2-1/2 (12-1/2 ?)per cent per annum with half yearly rests subject the variation. The loan was granted for the purchase of tractor. Defendant No. 1 mortgaged his land measuring 82 kanals 16 marlas with the plaintiff-bank as collateral security. Defendant No. 2 stood guarantor and executed guarantee deed for the due repayment of the said loan. The defendants also executed agreement for term loan and other necessary documents in favour of the bank. Tractor bearing registration No. PAD-5434 was purchased. However, the defendants did not pay the loan amount. Mohinder Singh, original loanee, died and the suit was filed against his L.Rs. and the guarantor.

(3.) A reading of the above paras would show that the banking companies are entitled to charge interest as per the contract and by virtue of Section 21-A this Section applies to all types of loans which are granted by banking companies to an agriculturist or a non-agriculturist. In this view of the matter, the trial Court rightly decided the issues in favour of the bank and against the present appellants. Resultantly, I find no merit in the present appeal and the same is hereby dismissed in limine. Appeal dismissed.