- (1.) Leave granted.
(2.) Being aggrieved by the judgment delivered by the High Court of Karnataka in Regular First Appeal No. 1684 of 2004 dated 29th July, 2005, this appeal has been filed by the Karnataka State Khadi and Village Industries Board, who was defendant No. 3 in the Suit, which had been filed by Punjab National Bank, who is respondent No. 1 (for sake of convenience, the creditor- Punjab National Bank has been described as 'the Bank' whereas the appellant has been described as the 'Board' and the principal debtor Shevashakti Gramodyoga Sangh, Gulbarga, who had borrowed funds from the Bank has been described as the 'Borrower').
(3.) The facts, giving rise to the present litigation, in a nutshell, are as under : The Borrower had borrowed money from the Bank for its business and as per policy of the State of Karnataka, the Board had assured the Bank that by way of subsidy, the amount of interest would be paid by the Board to the Bank, provided there was no default in repayment of the principal amount by the Borrower.;