R. V. RAVEENDRAN, J.

( 1 ) APPELLANT herein filed O. S. No. 57 of 1996, on the file of Civil Judge (Senior Division), Saundatti [old O. S. No. 60 of 1993, on the file of principal Civil Judge, Bailhongal] against the first respondent-firm and its four partners (respondents 2 to 5) and two sureties (respondents 6 and 7 ). The appellant and first respondent will also be referred to as the 'bank' and 'borrower firm'. Respondents 1 to 5 together will also be referred to as the 'borrowers' and respondents 6 and 7 as the 'guarantors'.

( 2 ) THE plaint averments, in brief, were as under:2. 1 Appellant-Bank sanctioned a term loan of Rs. 6,37,000/- to the first respondent-firm (and its partners-respondents 2 to 5) for construction of a ginning factory and purchase of machineries. Out of sanctioned loan, the borrowers availed in all Rs. 6,11,0007- (that is Rs. 1,00,000/- on 31-10-1984, Rs. 1,00,000/- on 13-11-1984, Rs. 2,04,743/-on 23-11-1984, Rs. 40,600/- on 18-12-1984, Rs. 50,0007- on 28-12-1984, Rs. 25,0007- on 11-6-1985 and Rs. 90,657/- on 19-9-1985 ). The borrowers and the sureties executed a term loan-cum-hypothecation agreement dated 31-10-1984 in favour of the Bank agreeing to repay

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