N. Kumar, , J.—This is defendants appeal against the judgment and decree of the trial Court, which has decreed the suit of the plaintiff for money as prayed for.

2. For the purpose of convenience, the parties are referred to as they are referred to in the original suit.

3. The plaintiff M/s. Karnataka Agro Industries Corporation Limited is an undertaking of the State Government of Karnataka. It is established to assist the farmers in the State Government of Karnataka in their agricultural operations by supplying to and equitably distributing among them the seeds, fertilisers, insecticides and fungicides etc. The plaintiff could appoint selling agent distributors and also enter into credit transactions with them to receive the supplies of the plaintiff on credit basis by offering adequate valuable security in the form of immovable property or properties belonging to them or their guarantors. The 1st defendant is a proprietary concern and 2nd defendant is a proprietor. 3rd defendant is the son of the 2nd defendant. The 1st defendant approached the plaintiff-Corporation in the 1st week of January, 1970 and sought for selling agent distributorship in fertilizers, seeds etc. He also sought for credit facilities. He assured the plaintiff that he would abide by all the terms and conditions of the agency agreements as well as the credit policy of the plaintiff. The plaintiff appointed the 1st defendant as its agent. The 3rd defendant, the son of the 2nd defendant is his Power of Attorney holder executed the agency agreement dated 8.10.1971 at Bangalore. He also executed the guarantee agreement. The defendants delivered and deposited the registered documents of title relating to agricultural land situated in Dummalli village, Nidige hobli, Shimoga taluk with the plaintiff, with an intention to create equitable mortgage by deposit of title deeds. The Memorandum of equitable, Mortgage by deposit title deeds also came to be executed on 8.10.1981 in favour of the plaintiff. Thereafter, the plaintiff started supplying the fertilizers and other products. It was a running account The defendants drew their first supply from the plaintiff-Corporation on 16.1.1970 and the last payment that they have made is on 7.10.1972. Thereafter they did not drew any supplies nor made any payment towards the amount outstanding i.e., cost of supplies. Finally, the plaintiff-Corporation struck the balance on 5.2.1975 and found that the defendants were due in a sum of Rs. 1.99.523-00/-. When the defendants did not pay the aforesaid amount in spite of several reminders, the plaintiff was constrained to file the suit for recovery of a sum of Rs.1,99,523-00/-together with interest thereon at 12% p.a. in default of such payment for sale of the mortgaged property. The said suit was filed on 16.7.1975 on the file of the Civil Judge (Mayo Hall, Bangalore. When the defendants contended, the Court at Bangalore has no territorial jurisdiction, as the mortgaged properties are at Shimoga, the Court upheld the said contention and ordered for return of the plaint. After taking return of the plaint, it was represented on the same at the Court at Shimoga.

4. The defendants 1(a) & (b) after service of summons filed the written statement contesting the claim. They denied all the allegations in the plaint. They denied the agreement entered into between the parties. They denied their agency, their mortgage by deposit of title deeds and receipt of any products of the plaintiff. They contended no balance was struck on 5.2.1975 alleged in the plaint nor they due a sum of Rs.1,99,523-00/- and they sought for dismissal of the suit. Thereafter they also contended the deed transaction between the plaintiff and the defendant was a separate by itself there was no continuity. They did not agree for a running account. They were not notified the alleged striking of balance as on 5.2.1975. There was no notice. As and when the plaintiff gives all the detailed particulars, the defendants wo