M/S. GOPALPUR MINERALS, GOPALPUR, DHANBAD & ORS. Vs. THE BRANCH MANAGER, STATE BANK OF INDIA, DHANBAD & ANR.

JUDGEMENT

(1.) Heard learned counsel for the parties. Defendants in Title (Mortgage) Suit No. 175/93 is the appellant herein being aggrieved by the judgment and decree dated 24th February, 1999/12th March, 1995 passed by learned Second Sub Judge, Dhanbad, where-under the plaintiff Bank has been held to be entitled to the relief(s) claimed for with pendent-elite and future interest at the contractual rate on the principal amount.

(2.) The case of the parties as set up before learned trial court through their pleadings is being referred to hereinafter in brief:

(3.) The plaintiff a Body Corporate duly constituted under the Banking Companies Act, 1970 had in course of its business extended cash credit loan of Rs. 4 lakhs and a credit (bill) for Rs. 1 lakh on the application of defendant no. 2 being the sole proprietor of defendant No. 1 for the purpose of calculation of refractory minerals business. The defendant no. 3 stood as guarantor for defendant nos. 1 and 2 for the loan in question. Defendants agreed to pay interest at the rate of 1 % per annum below State Bank Advance Rate (SBAR) rising and falling. Defendant nos. 2 and 3 also created equitable mortgage by depositing their title deeds of land and building dated 12th December, 1988 and 4th October, 1989 against the loan. The second charge over plant and machineries was with the plaintiff and the first charge over plant and machineries was with the Bihar State Financial Corporation (in short 'BSFC')defendant no. 4. On acceptance of the terms and conditions of the loan, the defendants executed agreement letter for loan, D.P. note, delivery letter under PDR, agreement executed by the guarantor, agreement for cash credit for hypothecation of the goods and undertakings of assets dated 18th January, 1991. It is also the case of the plaintiff that the defendant nos. 1 and 2 availed cash credit loan of Rs. 4 Lakhs for their running business, but did avail the loan of Rs. 1 lakh under cash credit. As per the agreement, the defendants would deposit the entire sale proceeds in the Bank and submit statement of assets hypothecated at regular intervals. However, defendants defaulted to comply with the terms and conditions leading to filing of the suit.