INDIAN BANK Vs. NARINDER KUMAR GUPTA

JUDGEMENT

(1.) This is an application under Order 37, Rule 3 (5) of the Code of Civil Procedure for leave to defend the suit

(2.) The plaintiff is Indian Bank. The suit against the defendant is for the recovery of Rs 71,933.15 with costs and future interest at the rate of 21.5 per cent per annum from the date of institution of the suit till the payment. The suit is based on the Demand Promissory Note dated 14 -7 -1980. This promissory note is for Rs. 45,798.96. By this promissory note the defendant has undertaken to pay the amount with interest thereon at the rate of 8 per cent per annum over the official rate of Reserve Bank of India with a minimum of 17 percent per annum with quarterly rests from the date of loan to the date of payment in full.

(3.) The case of the plaintiff is this. On 7 -10 -77 the defendant opened a current account with the plaintiff and simultaneously requested for over -draft facility in this account. The plaintiff accepted the request of the defendant and the latter was allowed over -draft facility to the extent of Rs. 25,000 in the said current account. On 13 -2 -1978 the plaintiff called upon the defendant to pay the entire amount failing which the plaintiff would take steps to recover it. On 21st September, 1978 the defendant asked for being sanctioned Regular Open Cash Credit Loan facility in the said account. This request was accepted. The defendant executed a Demand Promissory Note in favour of the plaintiff at Simla for Rs. 25,000/ - as security for the said over -draft. This is dated 21 -9 -1978. It shows that the defendant has undertaken to pay the amount with interest at the rate of 6 per cent per annum over the official rate of the Reserve Bank of India with a minimum of 15 per cent per annum from the date to the date of payment in full with quarterly rests. The defendant also executed an agreement for Demand Cash Credit on the hypothecation of movable property (wrongly written in para 6 of the plaint as immovable property). By this hypothecation agreement the defendant hypothecated the timber stored at Dharampur in favour of the plaintiff. However, the defendant failed to pay. The plaintiff served a notice dated 30th April, 1980 through its Advocate calling upon the defendant to pay the entire amount. The defendant requested for time. On 14 -7 -1980 there was a debit balance of Rs. 45,798.96 including interest as on 30 -6 -19:0. The defendant acknowledged his liability by tendering to the plaintiff a balance confirmation letter dated 14 -7 -1980. On the same date the defendant executed the Demand Promissory Note referred to earlier,