1. This first appeal is admitted on 12th March, 1998. Heard learned counsel appearing for the respective parties.

2. Appellant Bank’s suit for recovery of an amount of Rs.27,76,137/- and for preliminary decree for sale of the mortgaged property for recovery of the said amount was decreed against the borrower original defendant No.1, but was dismissed against the guarantors i.e. defendants No.2 to 6. Hence, this first appeal against the guarantors.

3. The case of the appellant/plaintiff, in short, is as under:

That, the original defendant No.1 has availed a loan of Rs.10 (ten) lacs on 12.02.1988 and 10.03.1988 for the purposes of purchase of a truck with bore-well Rig, Machine, Screw Compressor, Drilling Rig, etc. The original defendant No.1 the borrower hypothecated the said machinery and its accessories with the plaintiff Bank. At the same time, the defendants No.2 to 6 i.e. present respondents No.2 to 6 agreed to stand as continuing guarantors for the original defendant No.1 in repayment of the loan amount as agreed between the appellant Bank and the defendant No.1. They agreed to mortgage their respective immovable property, situated in Nizamabad in Andhra Pradesh State. They agreed to accept all the terms and conditions of the sanction of the loan amount. Thereafter, the amount was sanctioned and disbursed to the defendant No.1. They accordingly delivered their title-deeds at Himayatnagar Branch of the plaintiff/appellant Bank on 29.04.1988. Thus, equitable mortgage by depositing the title-deed is created by these respondents. The defendant No.3 i.e. the respondent No.3 has further executed agreement to mortgage his plots, situated at Shivajinagar, Nizamabad, as detailed in the plaint and accordingly, those title-deeds were deposited on 29.04.1988 at Himayatnagar branch of appellant Bank. All the defendants on 28.04.1988 attended the Himayatnagar branch of appellant Bank and on 29.04.1988, deposited the title-deeds of their respective immovable properties, as detailed in the plaint. They had agreed by executing affidavits regarding the confirmation of the mortgage by deposit of title-deeds and had further agreed that the revival of the loan, if any by the borrower i.e. defendant No.1 shall bind the mortgagor. However, as the defendant No.1 failed to repay the loan amount as agreed from time to time, he has executed balance confirmation letters between 1989 and 1992, as detailed in the plaint and thus extended the time for payment of the borrowed amount together with interest accrued. However, due to the persistent default, the amount staggered to Rs.27,76,137/-. In the circumstances, the suit, as detailed supra, came to be filed on 22.07.1994.

4. The defendant No.1 i.e. the borrower, though served with the summons, failed to appear before the trial Court and thereafter to file written statement. The case, therefore, proceeded without his written statement. Defendants No.2 to 4 i.e. present respondents No. 2 to 4 filed their common written statement at Exhibit-33. They denied all the pleadings of the appellant Bank. Further, the plea of territorial jurisdiction to entertain the suit was taken as the mortgaged property are situated at Nizamabad in Andhra Pradesh. The original contract between the appellant Bank and the defendant No.1/ defendant No. 1 was denied. They denied that these defendants had approached the plaintiff in connection with any such loan transaction. The execution of any document by them or deposit of title-deeds towards creation of mortgage was denied. Further, any balance confirmation letter from the defendant No. 1 was denied. Alternatively, it was submitted that from time to time, these respondents/defendants had brought to the notice of the Manager of the plaintiff Bank about the activities of the defendant No.1. However, the Branch Manager of the plaintiff Bank failed to take any proper steps or attach the hypothecated property and therefore, it was claimed that these defendants/responden