FEDERAL BANK LIMITED Vs. SRI SATHYA PRAKASH "KAVITHA"
DEBTS RECOVERY APPELLATE TRIBUNAL
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(1.) THE appellant Bank filed the Original Application No. 162/2000 for recovery of a sum of Rs. 13,13,254.30p under the Cash Credit Account together with interest @ 19.89% p.a. with quarterly rests from the defendants jointly and severally and by sale of 'A' to 'D' schedule properties. THE 1st defendant was the principal borrower and the 2nd defendant was the guarantor. Though the 2nd defendant denied the execution of the guarantee agreement in Exh. A11, the Tribunal came to the conclusion that the 2nd defendant did execute the guarantee agreement Exh.A11 and rejected the contentions otherwise as contended by the 2nd defendant. But, however, on the question that the 2nd defendant did not execute the guarantee agreement simultaneously when the 1st defendant borrowed the amount and therefore the guarantee agreement (Exh. A11) is not supported by consideration and thereby came to the conclusion that the 2nd defendant, the guarantor is not liable, and dismissed the OA as against the 2nd defendant. Aggrieved by the same, the Bank has preferred this appeal.
(2.) Heard the Authorised Officer of the appellant Bank. The 1st respondent was set ex parte on 29.4.2005 and the 2nd respondent is absent throughout. The 2nd respondent was not represented on 25.5.2005, 17.6.2005 and 5.7.2005, and today, also he is not represented. The 2nd respondent is called absent and set ex parte.
The 1st respondent had the benefit of loan on 27.2.1999, to which the 2nd respondent executed the deed of guarantee on 13.8.1999. Though the 2nd defendant had taken several pleas before the DRT, all his contentions were negatived and the DRT upheld that the 2nd defendant did execute the guarantee letter on 13.8.1999. But, however, the DRT held that the 2nd defendant did not execute the guarantee letter Exh. A11 simultaneously or contemporaneously on the date when the 1st defendant namely K. Sathya Prakash, the principal debtor, had the benefit of loan under Exh. A16 on 27.2.1999.
(3.) NOW, the point which arises for consideration of this Tribunal is, whether the deed of guarantee executed by the 2nd defendant subsequent to the date of loan, is a valid guarantee and supported by consideration.;
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