2003 (9) TMI 797

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....h Manager, Civil Lines Branch, Jabalpur, against the respondents No. 2 and 3 (hereinafter mentioned as 'borrowers') and against the appellant (hereinafter referred to as 'guarantor'). As per the plaint the respondent No. 1 is a Nationalised Bank constituted under the provisions of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its head office at Bombay and a Branch at Civil Lines, Jabalpur. The respondent No. 3 is the sole proprietor of respondent No. 2, M/s Kamla Chemist dealing in business of Drugs and Medicines. Respondents No. 2 and 3 applied to the plaintiff/Bank for grant of cash credit limit to the extent of Rs. 20,000/- for his business and executed necessary loan documents on 18-2-....

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....nce of the legal notice they filed this suit for recovery of the amount to the tune of Rs. 2,09,277.60 with interest at the rate of 17.25 per cent per annum with quarterly interest from the date of due till realization of the entire amount. The borrowers in spite of receipt of the notice of plaint did not make their appearance before the trial Court and as such they were proceeded ex parte. The appellant/guarantor appeared before the Court and filed written statement contending, inter alia, therein that he had not given the guarantee for the borrowers for the loan and denied the execution of any agreement of guarantee in favour of the Bank. The trial Court framed issues and recorded the evidence led by the parties and decreed the suit....

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....is point was not raised by the appellant in the trial Court. However, we find that this argument has got no force. The appellant had executed documents in the nature of continuing guarantee and has mortgaged the immovable property by way of equitable mortgage and, therefore, as the suit was filed on the basis of such document the same can be instituted within 12 years. Thus, the suit filed by the respondent was within limitation. Facing with the above situation the learned counsel for the appellant has apprised us of the fact that the Reserve Bank of India has floated a scheme for one time settlement and has prayed that the respondent Bank be also directed to consider their case sympathetically under that scheme. Shri Rajesh Maindiratta,....