Decided on December 16,2005



K. Gnanaprakasham, J. (Chairperson) - (1.) THE defendants 3 and 5 in the OA are the appellants in this appeal. THE respondent Bank filed the suit OS 2919/1992 before the City Civil Judge at Bangalore and it came on transfer to the DRT. Bangalore and taken on file as OA-663/1995. OA was filed for recovery of a sum of Rs. 20,91,615/- together with interest at 23.5% p.a. to be compounded quarterly and for costs and other reliefs.
(2.) The case of the applicant Bank is that the 1st defendant is a proprietary concern owned by the 2nd defendant and they sought for a loan and the same was sanctioned as Cash Credit facility for Rs. 50,000/- on 3.1.1991 and 2nd defendant executed the promissory note dated 3.1.1991, agreement of hypothecation in respect of movable properties and also agreement of hypothecation of plant and machinery and availed the facility in full. During the course of the business, the 2nd defendant also deposited several cheques issued by third parties to the plaintiff Bank and those cheques were also realised. It is stated that the defendant 3, 4, 5 and 6 agreed to give necessary sureties in favour of the plaintiff for the amount due by the defendants 1 and 2 and they have also executed the guarantee agreement and other documents in favour of the plaintiff. As the defendants have not paid the amount, the respondent Bank laid the suit. The third defendant filed reply statement during his liability and stated, his documents of title deeds were made use of the defendants 1 and 2 and the respondent Bank took the signatures of the third defendant on several blank forms and those forms were misused and he was made liable. He also came to know that there was some foul play by the Bank manager and Mr. Balagangadhar Sharma, and 2nd defendant in the OA and they have misused the documents of title deed of this defendant. It is also stated that the manager of the Bank was also suspended and criminal case was filed against him in CC 2884/1992, and he is absconding.
(3.) THE 5th defendant filed a separate reply statement denying his liability. This defendant stated that when he approached the respondent bank through the 2nd defendant for grant of loan of Rs. 2 lakhs, he was asked to handover all the original documents of title in respect of his property and accordingly he had handed over those documents, and instead of granting loan to this defendant, the respondent Bank colluded with the 2nd defendant and played a fraud, made this defendant to walk to the Bank several times, but no amount was paid to him. THE defendant also issued Notice to the Bank calling upon them to return all the original title deeds. This defendant has not executed any document in favour of the respondent Bank.;

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