JILLELLAMUDI DHANALAKSHMI Vs. UNION BANK OF INDIA
LAWS(APH)-1992-2-74
HIGH COURT OF ANDHRA PRADESH
Decided on February 14,1992

JILLELLAMUDI DHANALAKSHMI Appellant
VERSUS
UNION BANK OF INDIA Respondents


Referred Judgements :-

NATESAN PILLAI VS. RATHNAM FILIAL [REFERRED TO]
NICHOLSON BANK VS. RAJAGOPALA AIYAR [REFERRED TO]
VISHWANATH VS. SADASHIVA [REFERRED TO]
JAGAT JIT SINGH VS. MANODAT [REFERRED TO]
SHAHAJI VS. TUKARAM [REFERRED TO]
M THIRUMALACHARIAR VS. S P VARADAPPA CHETTIAR [REFERRED TO]
KRISHNAN MADHAVAN VS. NARAYANAN JAYADEVAN [REFERRED TO]



Cited Judgements :-

VASTAVA CHIT FUNDS PVT LTD VS. MADALA BENARJEE [LAWS(APH)-2005-3-52] [REFERRED TO]


JUDGEMENT

Shah Mohammed Quadri, J. - (1.)These second appeals arise out of the same facts and raise the same question of law. When they came up for hearing before a learned single judge it was represented by the learned counsel for the respondent, the Union Bank of India, (hereinafter referred to as "the Bank"), that a second appeal arising out of the same facts, which was filed by the Bank was dismissed by a learned Single Judge of this Court at the stage of admission without hearing the case fully and without allowing him to cite any decisions; on that representation this batch of second appeals was directed to be posted before a Division Bench. That is how these cases have come up before us.
(2.)In these second appeals, except in Second Appeal No.791 of 1987, the defendants are the appellants. The plaintiff-respondent Bank filed suite for recovery of loan, which were decreed by the trial Court. On appeal by the defendants the learned District Judge, West Godavari District, at Eluru, confirmed the judgments of the trial Court and dismissed ail but two appeals. The aggrieved defendants have filed these second appeals. It may be appropriate to mention here that the said two appeals, namely, A.S.No.178 of 1981 and A.S.77 of 1984 were allowed by the learned District Judge. Against the judgments in those appeals, the Bank filed Second Appeal No.241 of 1985 and Second Appeal No.791 of 1987. The first mentioned second appeal was dismissed at the admission stage by a learned single judge on 2-4-1985. The other second appeal is now before us.
(3.)A brief narration of the facts giving rise to these appeals will be apposite. A scheme was evolved under which the members of the West Godavari District Co-operative Sugars Limited, Surappagudem, hereinafter referred to as "The sugar factory", were advanced loans by the Bank for purchasing shares in the said sugar factory by the Bank. The members of the sugar factory were also promised croploan by the Bank. The crop loan as well as the loan advanced for purchasing the shares was to be recovered by the sugar factory on behalf of the Bank from the value of the sugar cane that would be supplied to the sugar factory by the members. Under the said scheme, the defendants in the suit obtained loan from the Bank. As the facts in all these appeals are similar, it would suffice if we refer to the facts in one of the second appeals Second Appeal No.1013 of 1985. The appellant-defendant applied for the loan of Rs.3,200/- on 22-6-1973, under Ex.A-2. That application was sanctioned and the defendant-appellant executed the promissory note Ex.A-3 on 13-7-1973 and a hypothecation bond Ex.A-4, on the same day. It appears on the same date the amount of loan was credited to the account of the sugar factory. The hypothecation bond, Ex.A-4, provides among other things that in the event of the borower committing default in payment of loan secured under the agreement of hypothecation or any part thereof the entire loan outstanding shall become forthwith due and payable and the bank at its option shall be entitled to take certain measures specified therein. The appellant-defendant failed to pay the first instalment which fell due on 25-11-1975 (the date on which the sugar factory is said to have been commissioned), or on 30-6-1976 (the date when it alternatively fell due) as well as the subsequent instalments. The Bank called upon the defendant by notice Ex.A-6, dated 5-5-1979 to discharge the loan along with interest at 31/2% per annum over the bank rate with a minimum of 10% with half-yearly rests, invoked Clause 13 of Ex.A-4, the hypothecation agreement. As the appellant did not pay the amount, the Bank filed the suit O.S.331 of 4980 on the file of the 1st Additional District Munsif, Eluru, on 31-3-1980 for recovery of loan amount together with interest.
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