Decided on February 06,2006



K.J. Paratwar, Presiding officer - (1.) THIS is a second round of the Original Application (O.A.) for recovery of following amounts: Rs. 11,75,261/- being dues under cash credit facility with interest thereon @19.75% p.a. and Rs. 1,56,537/- being dues under term loan facility with interest @19.25% p.a.
(2.) The O.A was earlier allowed by me by judgment dated 28.2.2003. In the Miscellaneous Application (M.A.) No. 23 of 2003, the judgment (and recovery certificate issued pursuant thereto) was set aside by order dated 25.8.2003 as against defendant No. 3 subject to deposit of Rs. one lac. In other M.A. being No. 107 of 2003, the judgment (and recovery certificate issued pursuant thereto) was set aside by order dated 28.1.2004 on deposit by each of the applicant (defendant Nos. 1 and 2) of Rs. 50,000/-. The defendant Nos. 1 to 3 have complied with the conditions which is why afresh hearing in the O.A. took place. The defendant No. 1, carrying business in cupboards, trolleys, etc., issued as Borrower while defendant No. 2 is sued as guarantor. They are also sued as mortgagors. The defendant No. 3 is sued as purchaser of property equitably mortgaged by defendant No. 1 in order to secure the outstandings.
(3.) IN or about August 1991, the applicant sanctioned, by way of renewal, the defendant No. 1 cash credit facility of Rs. 4 lakh and term loan facility of Rs. 1 lakh. The security was continuation of equitable mortgage already created by defendant Nos. 1 and 2, by deposit of title deeds, way back in 1988 apart from personal guarantee by defendant No. 2. IN lieu of the grant of the facilities, defendant No. 1 executed demand promissory note and other usual security documents. The defendant No. 2 gave letter of guarantee. On 26.8.1991, the defendant No. 1 inter alia acknowledge and confirmed balance of Rs. 5,52,772.30 under cash credit facility and Rs. 88,650.80 under term loan facility. The defendant No. 1 availed of the facilities and operated the account but not satisfactorily. He failed in clearing the outstandings despite repeated demands and legal notice. The defendant No. 2 also did not discharge his liability as guarantor. Therefore, this original application is filed.;

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