The plaintiff- Bank ("the Bank" for short) has filed this suit for the recovery of their outstanding dues; due and recoverable from the defendants in the sum of .under the Cash Credit (Hypothecation) Account and Cash Credit (Bills) Account together with interest, on the sum of Rs.99,138.16 at the rate of 16% per annum with quarterly rests from the date of the suit till payment in full and final.

The Facts :

2. The factual matrix brought on record is that the defendant No.1 is a partnership firm engaged in manufacturing of pharmaceutical products having its factory at 345/A, Wagle Industrial Estate, Thane- 400 604 of which defendant Nos.1 and 2 were the partners, who had approached the plaintiff- Bank in the month of October, 1999 to seek two cash credit facilities viz. (i) Cash Credit Facility against the (Hypothecation of Goods and Raw Materials) to the extent of Rs.25,000/- and (ii) Cash Credit Facility (against the Bills of Defendant No.1) to the extent of Rs.25,000/-.

3. The plaintiffs have stated that the aforesaid facilities were sanctioned in favour of defendant No.1- partnership firm on 31st October, 1984. The defendant Nos.1 and 2 in the capacity of partners of defendant No.1, inter alia; executed various loan documents in respect of the aforesaid cash credit facilities and the said documents were renewed by them from time to time. Last of such renewal, according to the plaintiffs, was on 17th October, 1986.

4. The plaintiff- Bank has further stated that so far as cash credit facility against bills is concerned, the same was secured by executing loan documents in the nature of demand promissory note, letter of continuity and the said finance facility was actually availed by defendant No.1- partnership firm.

5. The plaintiff further states that the aforesaid facilities were guarantied by defendant Nos.4 and 5. Defendant No.5 left for heavenly abode during the pendency of this suit. His heirs/ legal representatives were not brought on record. Therefore, suit stood abated against defendant No.5.

6. The plaintiff has also stated that the cash credit loan account of defendant No.1 had become irregular. Consequently, they were called upon to pay outstanding dues by registered letters dated 5th October, 1989 which were sent by R.P.A.D. and the same were received by the defendants, the acknowledgements thereof are produced on record. In spite of receipt of notice, defendants failed to discharge their legal liabilities. With the aforesaid backdrop, the plaintiff- Bank has filed present suit.

7. On being summoned, defendant Nos.1, 2 and 3 appeared and filed their joint written statement contending therein that suit is barred by limitation. That they did not acknowledge their liability and that the letter of acknowledgment on 17th October, 1986 is not legal and valid. They also disputed correctness of the account maintained by the plaintiff- Bank in respect of cash credit facilities and went on to plead that blank forms of loan documents were executed by them in favour of the Bank, as such suit is not maintainable on such documents and liable to be dismissed.

8. The defendant No.4 has also filed his written statement denying his liability and contending that the Bank has not taken any steps to mitigate the liability suffered by defendant No.4- guarantor. Defendant No.4 has also denied execution of guarantee letters/documents and receipt of notice of demand alleged to have been issued by the plaintiff- Bank.

Issues for Determination:

9. Considering rival pleadings, issues were framed by this Court vide order dated 3rd September, 2007. By subsequent order dated 19th November, 2007, issue No.(i) came to be modified. The final issues framed read as under:

ISSUES FINDINGS

(i) Whether the plaintiff proves Yes.

that the claim made in the suit is

within Limitation?

(ii) Whether the plaintiff proves that they Yes.

are entitled to recover