STATE BANK OF INDIA Vs. VAN PHARMA LABORATORIES

JUDGEMENT

(1.) THIS appeal has been preferred against the judgment and order dated 21st January, 2001 passed by the then Presiding Officer, DRT, Jabalpur in T.A. No. 184/98, whereby and whereunder the claim of the appellant Bank to the tune of Rs. 14,60,288.80 has been rejected and dismissed.

(2.) The respondent defendant Nos. 1,2 and 3 filed joint written statement stating inter alia that the Bank failed to provide adequate finance to them as per the agreement, as a result the respondent No. 1 firm incurred heavy loss in the business and because of the fault of not providing adequate funds the claims of the appellant Bank should be dismissed.

(3.) THE main contention of the respondent defendant No. 5 was with respect to the opening balance of the loan facility as per exhibit No. P/7 wherein 10th June, 1983 a sum of Rs. 3,26,102.54 was shown to be transferred from the previous account of respondent No. 1 to the new account. In that way it was the contention of respondent defendant No. 4 that his liability as guarantor remains oblique when his guarantee even if taken to be correct and legal, then the same cannot exceed Rs. 2.15 lakh and he cannot be and should not be made liable as a guarantor for the accounts maintained by the Bank in exhibit No. P/7. On such position the appellant Bank filed a rejoinder stating that the respondent Nos. 1,2 and 3 were enjoying the facility of cash credit since 1978 and in the year 1983 fresh agreement of cash credit balance of Rs. 2.15 lakh was entered into and the balance of the previous loan account have been transferred in admittance of the respondent defendant Nos. 1,2 and 3. It was further contention of the respondent defendant No. 4 that his guarantee agreement stood as discharged when the respondent defendant No. 5 had executed a fresh guarantee agreement in the year 1985.