1. This appeal is by defendant No. 2 in the suit. He was the guarantor for the cash-credit facility extended by the plaintiff-bank/respondent No. 1 to the principal debtor-respondent No. 2. The plaintiff-bank brought the suit for recovery of Rs. 1,04,601.06 which was decreed against the defendants, including the principal-debtor and the guarantors/defendants. There are three defendants in this case. The 1st defendant is the principal-debtor, whereas defendants 2 and 3 are the guarantors.

2. The gist of the case of the plaintiff-bank is that defendant No. 1 (Subodh Kumar), the principal-debtor, ran a grocery shop. He approached the plaintiff for financial assistance by way of working capital and the plaintiff agreed to grant cash-credit facility to him to a limit of Rs. 25,000.00 only re-payable with interest @ 2.85 % over Reserve Bank of India, subject to a minimum of 11.85% per annum, for which he executed a demand promissory note dated 10-10-1980 (exhibit 1), a deed of hypothecation of tangible movable property and defendants 2 and 3 executed a continuing guarantee dated 10-10-1980 taking all the responsibility that they would also be liable to pay the amount to the plain