J&K BANK LTD Vs. S SURJIT SINGH

JUDGEMENT

(1.) INITIATED by the unsuccessful plaintiff -bank, this Appeal seeks the correctness of the judgment and decree dated 27.11.99 drawn by the First Addl. District Judge (Bank Cases) Jammu, in an action instituted by the plaintiff -bank for the recovery of Rs.354558.18 paisa against the defendants -respondents on account of loan and advance for the purchase of TATA Truck. In culmination of the trial of the suit, the court below dismissed the claim of the plaintiff -bank for the recovery of the suit amount in declaring it as barred by period of limitation.

(2.) THE appellant J&K Bank Ltd. (in short The Bank ) commenced a suit for recovery of Rs.354558.18 paisa, due under the pronote and guarantee deed, against defendants namely S. Surjit Singh, S. Prem Singh and Sh. Behari Lal Gupta, respectively.

(3.) ACCORDING to the plaintiff -bank, an amount of Rs.2,20,000/ - as loan was sanctioned in favour of defendant No. 1 for the purchase of new TATA truck who agree to repay the same in seventy equal monthly installments of Rs.4354/ - each. A Hundi dated 12.08.1981 for the loan amount was executed by defendant No. 1, besides the deed of hypothecation whereby defendant No.1 hypothecated the purchased truck, trust receipt, irrevocable power of attorney, letter of undertaking and an affidavit in favour of bank by way of security of the loan amount advanced by the Bank. Whereas, the defendants 2 and 3 executed guarantee agreement dated 12.8.81 for the said amount and guaranteed repayment of the loan amount along with interest, at the rate of 3.50% p.a. OBR with minimum rate of 12%p.a. or any other rate of interest prescribed by the Reserve Bank of India from time to time. However, failure of defendants No. 1 (borrower) to discharge his obligation to pay the installments of the loan amount in terms agreed to by the parties rendered the loan account irregular and sticky. This led the bank to raise a demand notice dated 4.2.87 issued to the defendants requiring the repayment of the loan amount with interest accrued thereon. Further case of the bank is that the defendant No.1 (borrower) again approached the bank and sought some time to repay the loan amount. The borrower further stated to have executed a D.P. Note wherein he admitted and acknowledged the liability of past debt existing and outstanding against him of a sum of Rs.299865.52 NP and thus, thereby, extended the period of limitation. It is further, stated that the borrower defendant No. 1 promised to repay the amount at the rate of 2 -1/2% OBR with minimum of 12 -1/2% p.a. Failure of the defendant to repay the amount of loan along with the agreed interest despite various demands, the plaintiff -bank, preferred the suit for recovery of Rs.354,558.18 NP, both on account of principal and interest accrued thereon.