SOHAN TEXTILES INDUSTRIES Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) This first Appeal has been filed by the appellants-defendants assailing the judgment and decree dtd. 13/5/1997 whereby and where under Civil suit filed by the respondent-plaintiff- Punjab National Bank for recovery of Rs.83,076.00 has been decreed and while passing the decree for such due amount, the Trial Court directed to pay interest @ 14% p.a. quarterly on the cash credit facility amounting to Rs.29,682.00 and interest @ 20.25% p.a. quarterly on the term loan of Rs.53,394.00.

(2.) The brief facts of the case as culled out from the record are that appellant-defendant No.2- Sohan Lal Agrawal as proprietor of appellant-defendant No.1- Firm Sohan Textiles Industries applied for term loan of Rs.40,000.00 on 30/9/1978 and again applied for cash credit facility of Rs.15,000.00 on 16/12/1978 for the purpose of establishment of cottage industry. The appellant-defendant No.3 had furnished guarantee for re-payment of the said loan. It appears that though defendant Nos. 1 and 2 paid few installments of the loan, however could not pay the entire loan, therefore, the respondent-bank filed a Civil suit for recovery of due loan on 17/12/1993 through its authorised person, Senior Manager Mr. Suraj Prakash.

(3.) After receiving the notices of aforesaid suit, defendants submitted joint written statement and took defence that Mr. Suraj Prakash has no authority to file the present suit for and on behalf of the Bank. The defendants, in their written statement had not denied the fact of taking term loan and cash credit facility and have also not disputed the execution of the mortgage deed and other relevant documents in favor of the Bank to ensure re- payment of loan amount. However, the defendants only disputed that since defendant No.2 is not a literate man and does not know English, therefore, he made signatures on the papers of loan under ignorance. The defendants have raised specific objection with regard to the rate of interest which has been calculated and being levied by the plaintiff-bank, is too higher and against public policy.