INDIAN BANK Vs. HUMERA MUMTAZ

JUDGEMENT

(1.) THE applicant Bank in OA is the appellant. Aggrieved by the order dated 28.12.2001, passed by the DRT -I, Chennai, the Indian Bank has preferred this appeal.

(2.) AS the appeal has been filed as against the discharge of defendants 3 and 4 alone, facts leading to the case of defendants 1 and 2 are not given below. The defendants 3 and 4 filled a separate reply statement, stating that the OA filed against them is not maintainable and it is barred by time. It is their further case that they are not liable for the loans granted to Mrs. Humera Mumtaz, and their signatures were obtained in blank papers and subsequently filled up and fabricated by the Bank. They have not executed any revival letters extending the period of limitation. The Bank also failed to recover the amounts from the defendants 1 and 2. Hence, prayed for the dismissal of the OA.

(3.) THE learned Advocate for the appellant would contend that in respect of the loan sanctioned in favour of the 1st defendant, the defendants 2 to 4 have executed Agreements of Guarantee. The defendants 2 to 4 have also created an equitable mortgage by deposit of title deeds of their properties. The defendants 1 and 2 have acknowledged their liabilities in respect of Packing Credit, Foreign Bills purchased/ negotiated/ADOVEXBIR and temporary overdraft facility by their confirmation letters dated 30.6.1994 That in the Agreement of Guarantee executed by 3rd and 4th defendants, they have consented to the Bank for making any variance as the Bank think fit in terms of the contract with the borrower including enlarging or varying the credit limits. Under Clause -9 of the agreement, they have further agreed that, "The guarantors also agree that any balance or debts confirmed by the borrower, or his authorised agent or any acknowledgement of liability concerning the same made and signed by the borrower or his authorised agents shall be binding on the guarantors in the same manner as if the borrower or his authorised agent was their authorised agent to make such acknowledgement of liability or confirming the balance and the said acknowledgement and confirmation shall be binding on them, as if made by themselves. They further agree that every such acknowledgement by the borrower or his authorised agent would renew their liability as guarantors and the guarantors would be liable for the payment of acknowledged debts in the same way as for the debts hereby guaranteed". Based upon this Clause, the appellant argues, even though the guarantors have neither acknowledged the debt nor given confirmation letter within time i.e. in the year 1994, as the defendants 1 and 2 did on 30.6.1994, they are liable as the principal borrowers have acknowledged the debt in time, that is sufficient to clamp the liability, on the guarantors also.