UPPULURI SITA RAMAIAH Vs. STATE BANK OF INDIA REPALLE

JUDGEMENT

(1.) Defendants 4 and 5 have preferred this appeal against the judgment and preliminary mortgage decree passed against the A-Schedule properties in favour of the State Bank of India for recovery of a sum of Rs. 21,861 -20 Ps. with costs and subsequent interest.

(2.) The facts giving rise to this appeal are as follows:- The parties are referred to according to their ranks in the lower Court. The defendants-2 and 3, who were partners of the 1st defendant firm Sri Lakshminarayana Timber Depot, obtained for the purpose of their business a sum of Rs. 20.000/- from the plaintiff. State Bank of India under a promissory note dt 19-9-1970 executed by the 2nd defendant on be.- half of the 1st defendant firm as well as the 3rd defendant agreeing to repay the said amount with interest at 11/4 over the State Bank advance rate at 8 3/4% with rises and falls thereto and with monthly rests. The effective rate of interest as on the date of the filing of the suit was 9 3/4% per annum. The defendants 1 to 3 also pledged with the Bank the stock of timber and executed an Agreement of hypothecation. Myneni Raghavayya, the undivided father of the 2nd defendant, stood as a guarantor and executed a special agreement in favour of the Bank and also transferred to the plaintiff-Bank a promissory note for Rs 20,000/- executed in his favour by the 2nd defendant as Managing Partner of the 1st defendant firm. The third defendant as partner of the 1st defendant's firm created equitable mortgage of plaint-B-Schedule properties measuring Ac. 1-66 cents of land by depositing his title deeds on 23-9-70 with th.e plaintiff-Bank at Repalle. The 2nd defendant's father as guarantor deposited his title deeds in respect of A-Schedule properties measuring Ac. 5.71 cents at the plaintiff-Bank at Repalle and created equitable mortgage in respect of the said property in favour of the Bank. Subsequently, the guarantor Raghavayya died on 18-4-1972 intestate and undivided from his son, the 2nd defendant. '

(3.) During his life time, the 2nd defendant's father Raghavayya who was alleged to have executed an agreement of sale Ex. B 1 on 7-2-1966 agreeing to sell Ac. 5-71 cents of A- schedule land for a sum of Rs. 9,500/- to defendants 4 and 5 and they were also alleged to have been put in possession of the said land on 15-7-1968 on payment of the full consideration by that date. As the loan amounts were not paid, the plaintiff-Bank got the available pledged stock sold and realised Rs. 3,575/- and thereafter filed the suit on 19-9-73 for recovery of the balance amount of Rs 21,861-20 ' together with interest and costs against the defendants 1 to 3 personally by sale of the A and B schedule properties.