JUDGMENT

KASLIWAL, J.-

This appeal by grant of special leave is directed against the judgment of Madras High Court dated November 25,1980.

2. The appellant- Indian Bank (in short the Bank) filed a suit for the recovery of an amount of Rs 1,21,006.98 due under an equitable mortgage and pronote against three defendants namely, K. Nataraja Pillai (defendant 1), his wife N. Pappathi Ammal (defendant 2) and his son N. Narayanan (defendant 3). According to the Bank, the defendants 1 to 3 executed a promissory note for Rs 1,00,000 on August 26, 1971 in favour of the Bank. They also executed two hypothecation deeds in respect of A schedule properties and executed an equitable mortgage on August 28, 1971 for B schedule properties. The consideration for the aforesaid transaction also included an amount of Rs 71,000 granted by the Bank in favour of 37 persons by way of short term loans. The defendant 1 had executed a guarantee agreement on June 14, 1971 in favour of the Bank in respect of the aforesaid short term loan in favour of 37 persons. The Bank had thus based its claim in the plaint on the promissory note and guarantee agreement for Rs 1,00,000 as principal and Rs 21,006.98 as interest.

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