The 2nd defendant in OS No. 61 of 1987, on the file of Principal Senior Civil Judge, Warangal, preferred this appeal against the judgment and decree passed therein. Respondent No. 1 herein is the plaintiff - Syndicate Bank, Warangal Branch, and respondent No. 2 is the 1st defendant in the suit.

2. For the sake of convenience, the parties are referred to as arrayed in the suit before the trial Court.

3. (a) Plaintiff filed the suit for recovery of a sum of Rs.78,187-90 paise alleging that the 1st defendant was a proprietary concern and the 2nd defendant was its co-obligant and guarantor for the loan sanctioned by the plaintiff to the 1st defendant under the loan agreement executed by both the defendants on 12.1.1983 for Rs.25,000/-, wherein they agreed to repay the same with interest at 9.5% per annum above the rate of interest of the Reserve Bank of India, with a minimum of 19.5% per annum, compounded quarterly for the value received, the same is enhanced to 20% with effect from 1.10.1984. On 12.1.1983, the 1st defendant executed an hypothecation agreement hypothecating the stock in trade and both the defendants executed a letter of authority authorizing the 1st defendant to operate the account and a letter agreeing to abide and pay the interest as per the fluctuations in the rate of interest, and defendant No.1 executed an agreement of guarantee. On the request of the 1st defendant, created over draft facility. Thus, the defendants are jointly and severally liable to pay the debt due to the plaintiff under the O.D. account.

(b) On 10.5.1984, defendant No.1 executed a debit confirmation letter while admitting the correctness of the balance due to the plaintiff as Rs.46,494-96 paise. Thus, defendant No.1 acknowledged his liability to pay the debt due to the plaintiff. As per the account of the 1st defendant, the total amount due to the plaintiff by the defendants was Rs.78,187-80 paise as on 1.3.1987. Despite demands, the defendants failed to discharge the debt due. Hence, the defendants were called upon to pay the debt due by issuing a notice dated 22.8.1984. Defendant No.1, on receipt of notice, got issued a reply dated 15.10.1984 denying the transaction and the liability thereunder. Thus, the debt due to the plaintiff remained unpaid. Hence, the suit.

(c) Defendant No.1 remained ex parte before the trial Court.

(d) Defendant No. 2 filed his written statement denying the material allegations, inter alia, contending that the Manager of the plaintiff bank has no authority to file the suit and the suit is not properly framed and signed by the person competent and sought for dismissal of the suit on these grounds alone. He further contended that he never executed any agreement or document in favour of the plaintiff either on his own behalf or on behalf of the 1st defendant and denied the liability to pay the debt due to the plaintiff and that the claim is barred by limitation.

4. Based on the above pleadings, the trial Court framed the following issues for its consideration:

"1. Whether the plaint is not signed and presented by a competent person?

2. Whether the 2nd defendant executed a demand promissory note dated 12.1.1983?

3. Whether the 2nd defendant executed agreement of guarantee and other documents on 12.1.1983?

4. Whether the statement of account filed by the plaintiff is not correct?"

5. During the course of trial, on behalf of the plaintiff, PW1 was examined and got marked Exs.A1 to A32. On behalf of the 2nd defendant, himself was examined as DW1 and got marked Ex.B1 alone. In addition to that, the trial Court has taken on record Ex.C1.

6. Upon hearing the learned Counsel on either side, perusing the material available on record including the oral and documentary evidence, the trial Court decreed the suit making both the defendants jointly liable to pay the debt due to the plaintiff. Aggrieved by the same, the 2nd defendant preferred this appeal on various grounds.

7. The main contention of the 2nd defendant is that no autho