The defendants in O.S.No.41 of 1999 on the file of the court of Senior Civil Judge, Narsipatnam are the appellants herein. The suit was filed for a preliminary decree for recovery of Rs.1,72,237/- being the amount due under the loan transaction.

2. According to the case of the plaintiff, the defendant Nos.1 and 2 availed the loan of Rs.35,000/- for poultry business and executed a registered mortgage bond on 30-03-1983 and the amount is payable in 60 instalments commencing from 7th month from the date of execution of the mortgage deed. The 3rd defendant executed a deed of guarantee. As the defendants failed to pay the amount, the plaintiff filed a suit O.S.No.7 of 1985 and a preliminary decree was passed on 25-09-1987 giving three (3) months time for redemption. Thereafter, the plaintiff filed I.A.No.46 of 1994 for passing of the final decree and to condone the delay. The said petition was dismissed on 17-10-1995 holding that the petition is not maintainable. Since there is no final decree, the relationship between the mortgagor and mortgagee subsists and therefore the plaintiff is entitled to institute the suit. The defendants are failed to pay the money and hence the suit was filed for recovery of the said amount.

3. The defendants contended that when the earlier application for final decree was dismissed, it amounts to a finality of the rights of the parties, the suit is barred by time under Order II Rule.2 CPC. It was further pleaded in view of the order in I.A.No.46 of 1994 which was dismissed on merits, the plaintiff-bank is debarred from instituting the present suit. As there is no cause of action the earlier dismissal of the final decree petition operates res judicata; the suit debt has abated; the interest claimed is excessive and untenable. Therefore, the defendants pleaded for a dismissal of the suit.

4. On the basis of the pleadings the following issues have been framed for trial:-

1. Whether the suit is hit by the bar Under Order II, Rule 2 of CPC?

2. Whether the order passed in I.A.46/94 in O.S.7/85 operates as resjudicata and estopped in this suit?

3. Whether the interest claimed is usurious and excessive?

4. Whether the suit is barred by limitation?

5. Whether there is no cause of action for this suit and the one mentioned is not correct?

6. Whether there is no subsisting debt and the account copy is not correct?

7. Whether the suit is not maintainable under law?

8. Whether the plaintiff isentitled to recover the suit amount from the defendants as prayed for?

9. To what relief?

5. On behalf of the plaintiff, PW.1 was examined and marked EXs.A-1 to A-3. On behalf of the defendants, DW.1 was examined and marked Exs.B-1 to B-5.

6. After considering the evidence on record, the learned Senior Civil Judge has decreed the suit of the plaintiff and aggrieved by the said judgment, the present appeal is filed.

7. The points that arise for consideration are:-

1. Whether the second suit on the basis of the mortgage is maintainable?

2. Whether the suit is barred under the principles of res judicata or the principle under Order II Rule 2 CPC?

3. Whether the judgment and decree passed by the learned Senior Civil Judge is legal and sustainable?

4. To what relief?

POINTS:-

8. Sofar as the facts in this case are concerned, there is no dispute that a registered mortgage deed was executed on 30-03-1983 which is marked as Ex.A-1 and it is also not in dispute that the amount is payable in 60 instalments. Therefore, the lower court has considered the period of limitation as starting from the competition of the period fixed for 60th instalment and held that the money has become payable from 31-03-1988 and the suit being filed on 04-03-1997 is within time. Sofar as this finding of the lower court is concerned, it is not seriously disputed by the counsel for the appellant that the suit on the basis of the mortgage is not time barred.

9. The fact is that earlier O.S.No.7 of 1985 was filed and the suit was decreed and thereafter