CENTRAL BANK OF INDIA Vs. JAI KISHAN

JUDGEMENT

(1.) THE present Regular Second Appeal has been filed against the judgment and decree dated 7.9.1983 passed by the learned lower Appellate Court vide which the suit filed by the appellant-plaintiff herein was ordered to be dismissed against defendant No. 3 i.e. guarantor.

(2.) THE plaintiff-Bank filed a suit for recovery of Rs. 1,65,227/- against the defendants including defendant No. 3 Shri Banarsi Dass son of Bishna, as a guarantor. It was pleaded in the suit that under the Self Employment Loan Scheme defendant No. 1 was sanctioned an interim loan amounting to Rs. 69,000/-. The said loan was to be paid back with interest of 5% over the Reserve Bank of India's rate of interest. To secure the loan, defendant Nos. 1 and 2 executed a Demand Promissory Note for a sum of Rs. 69,000/- letter of waiver, letter of interest, letter of non-encumbrance and letter of authority. In addition, hypothecation agreement was also executed whereby all tangible immovable properties such as Tractor, accessories etc. were hypothecated as security of the loan. An additional loan of Rs. 41,000/- was also sanctioned which was also secured by the documents referred to above. The said loan was also secured by a personal guarantee of defendant No. 3. Out of the sanctioned loan a sum of Rs. 49,500/- was released by defendant Nos. 1 and 2. However, on the failure to repay the loan, a suit for recovery of Rs. 1,65,227.09 was filed.

(3.) IN replication, the stand taken by the plaintiff was reiterated and following issues were framed:-