CANARA BANK Vs. SAI BOX FACTORY

JUDGEMENT

(1.) The plaintiff Bank has filed the present suit under Order 34, Code of Civil Procedure, against the three defendants for the recovery of Rs.7,80,702.08 paise by way of sale/foreclosure of the mortgaged property comprising of land measuring 15 marlas, described as M.I.G. Plot No. 34 in Housing Colony, Una, alongwith the superstructure standing therein.

(2.) Defendant No.l, Messrs Sai Box Factory is a sole proprietorship concern of which defendant No.2 is the sole proprietor. On the request of defendants 1 and 2, the plaintiff bank granted an open cash credit limit to the tune of Rs.2, 80,000/ - in their favour in the year 1989. The facility was availed of by the defendants. On their requests the defendants No. 1 and 2 were also permitted the facility of advance against the supply of bills to the extent of Rs.2,00,000/ -. Defendant No.3 stood as guarantor for defendants No. 1 and 2 for the repayment of the outstanding amounts of the abovesaid two loan facilities. She also created an equitable mortgage of her land, referred to above, in favour of the plaintiff - bank by depositing the title deeds. The two loan facilities carried interest at the rate of 15.5% per annum with quarterly rests or at such rate(s) as may be varied from time to time. The defendants having availed the facilities, failed to repay the same in accordance with the agreed terms inspite of demands. As on the date of suit, a sum of Rs.7, 80,702.08P was due from the defendants towards the two facilities, which they failed to repay.

(3.) The suit is being resisted and contested by the defendants. It was pleaded that though the facility of open cash credit limit of Rs.2,80,000/ - was sanctioned in their favour on 20.7.1987, the defendants were allowed to avail the same only on 5.8.1989. Due to non -availability of the facility, the defendants could not fulfil their commitments and as a result they had to suffer huge losses. Even in respect of the facility of advance against supply orders, sanctioned in their favour to the extent of Rs.2, 00,000/ - the defendants faced the similar difficulties and on account of non - release of advances in time, they further suffered huge losses. Insofar as the execution of loan documents are concerned, it was pleaded that the signatures of the defendants were obtained on blank proformae and the blanks were filled in behind their back. Rate of interest as claimed was also denied. It was pleaded that nothing was due from the defendants.