G. RAMASWAMY Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) THE 5th defendant in the Original Application (OA) has preferred this appeal as against the judgment dated 29.9.2003 passed by the DRT, Ernakulam, in TA -1015/1997[(OS -711/1994), Sub -Court Kollam].

(2.) THE 1st respondent in the OA. viz. M/s. Surya Refineries Private Ltd. was a Private Limited Company, in which the appellant was one of the Director. The defendant Company had Cash Credit facility with the applicant Bank of Rs. 18 lakh on 21.8.1989, for which it had executed an agreement of Hypothecation and also Demand Promissory Note on 21.8.1989. The repayment of the amount was guaranteed by the defendants 2,4 and 5 in the OA and they have also executed a letter of guarantee dated 21.8.1989. The 1st defendant Company had also executed necessary Deeds and Letters in favour of the applicant Bank. The 2nd defendant had also executed a mortgage by deposit of title deeds on 21.8.1989 offering his property for due repayment. It is the case of the applicant Bank that at the request of the defendants, the credit limits were enhanced on 9.2.1980, 21.3.1980, 9.8.1990 and on 9.11.1990, and the 1st defendant company had executed fresh documents on those debts, extending mortgages to the enhanced limits. All the amounts due and payable by the 1st defendant company were guaranteed by the defendant Nos. 2,4 and 5 as per the letter of guarantee dated 10.4.1992 and they have also executed a declaration, Memorandum of title deeds, particulars of existing charge, application f for credit facilities, authorisation letter, interest escalation . Application and agreement for letter of credit, letter of lien and also letter stating that the mortgaged properties belong to the 1st defendant, on 10.4.1992. As the 1st defendant company committed default in the repayment, the applicant Bank, brought the suit for the recovery of a sum of Rs. 1,74,38,064.13p. together with interest thereon.

(3.) THE DRT after taking into consideration all the aspects of the ease, tame to the conclusion that the applicant Bank has failed to prove that the 5th defendant had executed Exhibit A67 letter of guarantee dated 10.4.1992, Exh. A29. Letter of guarantee dated 23.3.1990, Exh, A42 letter of guarantee, dated 9.8.1990, Exh. A57. Balance confirmation letter dated 9.11 1990. and Exh. A76 balance confirmation letter dated 10.4.1992. But however, the Tribunal held that the 5th defendant is liable to extent of Rs. 18 lakh based upon the letter of guarantee dated 21.8.1989. Aggrieved by the same, the 5th defendant has preferred this appeal.