Decided on December 13,1991

UCO.BANK Appellant
ASHOK GAUTAM Respondents


D.P.SOOD, J. - (1.) Shri Ashok Gautam, the Principal borrower intended to purchase a truck. For that purpose, he made an application Ex. P -l dated 12 -2 -1982 clarifying that he himself is principal borrower that the loan of Rs. 1,80,700 would be guaranted by defendant No 2 Shri Tilak Raj Sharma. Accordingly, the loan, referred to above, was paid to the loanee, that is, defendant No. 1 on 12 -2 -1982 The U. Co. Bank a Body Corporate Constituted under the Banking Companies (Acquisition and transfer of undertakings), Act, 1970 (plaintiff) sanctioned the loan pursuant to which the principal borrower as also his principal guarantor executed the various loan, like, Memo of agreement -cum -guarantee deed (Ex - P -2), term loan agreement (Ex P -3) and hypothecation agreement (Ex. P -4). Pursuant to the aforesaid arrangement made in between the parties, the principal borrower Ashok Gautam (Defendant No. 1) was to deposit an amount of Rs. 32,206 from his own pocket in addition to the loan so advanced by the plaintiff for the purchase of the truck. There is no dispute in between the parties regarding the purchase of the truck bearing No.HPK -1885.
(2.) According to the terms and conditions of the agreement, interest agreed to be payable by defendant No 1 was at the rate of 6% over the bank rate subject to a minimum of 15% with quarterly rests. The entire loan, including interest was repayable in 48 instalments, each instalment being of Rs. 4,500. The first instalment was to be paid on 12 -3 -1982.
(3.) The plaintiffs case is that the principal borrower (defendant No. 1), became defaulter on the very first instalment, that is, on 12 -3 -1982; that they thereafter made attempts to regularise the payments but failed to do so. However, defendant No. 1, Ashok Gaaiam had been seeking time to re -pay the entire amount by writing various letters which are Exts. P -14 to P -19. It is alleged (hat in between defendant No. 1 also admitted the liability by signing the balance confirmation letters and acknowledging the debt of the plaintiff -bank However, as per further assertions made, no sum towards the liquidation of the loan amount was repaid by defendant No. 1. It is alleged that as per the terms of the agreement (Ex. P -2) Tilak Raj, Guarantor was also bound to repay the said amount, his guarantee being a continuing and co -extensive with that of the principal borrower. Having failed to realise the loan amount, ultimately plaintiffs filed the instant suit on 2nd June, 19 7 for the recovery of an amount of Rs. 4,61,310.53, inclusive of interest as on 31 -5 -1987.;

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