BANK OF INDIA Vs. SUDHIR KUMAR PANDEY

JUDGEMENT

(1.) This appeal under Clause 10 of the Letters Patent of the Patna High Court on behalf of the plaintiff is against the judgment of a learned single Judge in First Appeal No. 61 of 1955 (R), whereby and whereunder, the judgment and decree in Money Suit No. 50/17 of 1981/84 was set aside.

(2.) In view of the points involved in this appeal and further that the learned trial Court as well as the Court of appeal have stated the facts of the case in great details, it is not necessary to reiterate the entire facts. Suffice it to say that defendant No.1 approached the plaintiff Bank and applied for a loan to purchase a Chassis of Mini Bus. At the relevant time, the total cost involved was Rs. 1,30,000/-, out of which the plaintiff Bank sanctioned a sum of Rs. 97,500/- by way of loan repayable on demand together with the interest thereon at the rate of 41/2 per cent over the Reserve Bank of India's rate and minimum at the rate of 131/2 per cent per annum and consequent to such agreement, defendant No. 1 executed a demand of promissory note on 5-3-1976 for Rs. 97,500/-. An agreement of hypothication of vehicle was also executed on 5-3-1976 and defendants Nos. 2 to 4 also executed the deed as guarantors of defendant No. 1. Admittedly, in view of the advance of the loan defendant No. 1 purchased the Chassis of Mini Bus and got the body constructed. In view of the aforesaid advance of money, a sum of Rs. 1,50,700.22 paise became due from the defendants inclusive of interest up to 5-3-1981 including other charges and expenses borne by the Bank. On 20-9-1978, as would appear from Ext. 8, the defendants signed a letter of acknowledgement of indebtedness and admitted that they were liable to pay a sum of Rs. 1,06,606.19 paise. The defendants, however, failed to pay the dues to the plaintiff in spite of repeated demands, hence after observing the formalities of notice etc. the suit was filed on 6-5-1981 by the Bank for recovery of the dues.

(3.) The defendants in their written statement accepted that the loan in question was advanced for purchase of Mini bus, but according to them, the Bank had assured to charge a nominal interest. It was also denied that by a letter dated 20-9-1978 there was any acknowledgment of indebtedness signed by the defendants making themselves liable to pay the dues.