( 1 ) PLAINTIFF filed this suit inter-alia alleging that it is a corporation constituted unders the State Bank of India Act No. XXIII of 1955 and has its branches, amongst others, at Paharganj, New Delhi. S. K. Batura is the Branch Manager of Paharganj branch and is competent to sign and verify the plaint and to institute suit under the State Bank of India Regulations, 1955 and the notification (s) issued thereunder. Defendant No. 2 is the sole proprietor of defendant No. 1 -firm and on their approaching the said branch of the plaintiff-bank, lock and key loan facility (against stock and machinery) of Rs. 50,000. 00 was sanctioned to them. In consideration thereof/defendant No. 2 executed agreement of hypothecation dated 16/02/1970, the terms and conditions whereof are incorporated in para No. 5 of the plaint. One of the terms was that interest would be charged @ 1-1-4% above State Bank of India advance rate with minimum of 8-3/4% per annum to be calculated on daily balance-Additionally, defendant No. 2 executed demand promissory note in the sum of Rs. 50,000. 00 in favour of the bank on 16/02/1970. It is pleaded that the bank further agreed to grant clean term loan limi