( 1 ) THE plaintiff-Bank is the appellant. OS 1251 of 1981 was filed on the file of the II Additional Judge, City Civil Court, Hyderabad, for recovery of Rs. 35,495-60 ps. against the defendants.

( 2 ) FOR the sake convenience the parties in this appeal would be referred to in accordance with their ranking in the suit.

( 3 ) THE plaintiff is a Nationalised Bank and the 2nd defendant approached the plaintiff-Bank for a loan of Rs. 20,000. 00 on 8-4-1976 for running business in general stores. The plaintiff-Bank sanctioned the afore-mentioned loan to the 2nd defendant to run business under the name and style of m/s. Om Coffee and General Stores at Hyderabad. The loan facility provided by the plaintiff is called cash credit facility . The 2nd defendant executed a demand promissory note and also executed hypothecation agreement dated 8-4-1976 in favour of the plaintiff hypothecating stocks in trade of the first defendant. Defendants 3 and 4 stood as sureties to repay the loan and hence they are also jointly liable to repay the loan. Defendants 1 and 2 also signed letters of continuing guarantee in favour of the plaintiff on 8-4-1976. The plaintiff informed the 1st