JULLUNDUR MOTORS Vs. PUNJAB AND SIND BANK

JUDGEMENT

(1.) THIS is defendant Regular First Appeal against the judgment and decree of Sub-Jude 1st Class, Batala, dated 23-8-1988, whereby the suit filed by the plaintiff-bank for recovery of Rs. 526072. 64 paise alongwith interest at the rate of 19. 5% per annum till its realisation, was decreed.

(2.) THE plaintiff-bank filed suit for recovery of Rs. 526072 64 P. against the defendants on the allegations that the plaintiff-bank is body corporate constituted under the banking companies (Acquisition and Transfer of undertakings) Act 40 of 1980. It was further stated that the plaintiff bank has a branch at Umarpura in District Gurdaspur Shri Pal Singh, Senior Manager District Gurdaspur and Shri Gurdeep Singh, Manager of Umarpura Branch of the plaintiff bank were stated to be the principal officers of the plaintiff bank and thus authorised and empowered by the plaintiff-bank to file the present suit on its behalf. It was further averred that defendant No. 1 is a partnership firm and defendants No. 2 to 5 are its partners. The amount was advanced as Cash Credit Facilities to defendant No. 1 on the request of defendants No. 2 to 5, who in consideration thereof, executed for self and on behalf of defendant No. 1 agreement for Cash Credit Facilities in favour of the plaintiff bank They also executed a demand promissory note, an undertaking for the repayment of the amount due without presentment of the promissory note, an agreement for hypothecation of goods to the extent of Rs. 3 lacs and letter of authorization regarding the penal interest on 6-6 1983 in favour of the plaintiff bank. The rate of interest as agreed between the parties wag 19. 5% per annum with quarterly rests on the amount. Besides, defendants' No. 6 and 7 stood surety for defendants No. 1'to 5. They also executed letter of guarantee on behalf of defendants No. 1 to 5 in favour of the plaintiff bank on 6 6-198 3. In this way, they made themselves liable jointly and severally alongwith defendants No. 1 to 5 for repayment of the amount due to the plaintiff bank. In addition to these, defendants No. 3 and 5 to 7 also gave an additional security for the' repayment of the loan due by means of mortgaging their immovable properties, as detailed in the plaint.

(3.) THE defendants put in appearance, filed written statement and took preliminary objections to the effect that the suit has not been filed by a duly authorised person; suit is not within limitation; suit is not maintainable and the suit is bad for mis joinder of the parties. It was also alleged that defendant No. 1 firm has since been dissolved and defendants No. 2 to 5 are not carrying on the business under the name and style of defendant No. 1 firm. Defendants further alleged that they never approached the plaintiff-bank for Cash Credit Facilities in the year 1983 as alleged in the plaint. Defendants further averred that the plaintiff bank obtained signatures of the defendants on blank printed forms. Defendants also denied the execution of demand promissory note, letter of continuity, undertaking etc in favour of the" plaintiff-bank and so claimed that these documents are null and void arid without consideration Defendants also denied that there was any agreement between the parties regarding the payment of interest. However, the defendants expressed their willingness to pay the actual amount which according to them has been disbursed to them, after rendition of the account. Defendants also denied that defendants No. 6 and 7 executed any guarantee deed in favour of the plaintiff-bank on behalf of defendants No. 1 to 5 as alleged.