The court's decision reaffirms the principle that a party availing a loan must adhere to the agreed terms and make timely repayments, failing which the lender is entitled to seek recovery through legal means.

( 1 ) THIS is a suit for recovery of Rs. 3,99,438. 25 paise, filed by the plaintiff-Bank against the defendants on the allegations that defendant No. 1, the sole proprietory concern of defendant No. 2, requested the Bank for the grant of financial assistance and agreed to hypothecate the entire raw material/stock in trade and machinery as security. On the request of the defendants, the plaintiff Bank sanctioned a cash credit hypothecation limit to defendants on 16th February, 1985. The defendants executed a deed of hypothecation dated 16th February, 1985 and also furnished a personal guarantee of defendant No. 3 vide a deed of guarantee dated 16th February, 1985 and also agreed to pay interest at the rate of 6. 5 per cent per annum over the Reserve Bank of India rate of minimum of 16. 5 per cent per annum with quarterly rest. The defendants I and 2 executed also demand promissory note for Rs. 3,00,000. 00. Guarantee for repayment of the aforesaid sum alongwith same rate of interest was executed by defendant No. 3. Letter of continuing security was also executed by defendants I and 2. Defendant Nos. 1 and 2 availed the cash credit hypothecation limit sanctioned by the plaintiff-Bank, however they are stated to have not adhered to the financial discipline and had failed to liquidate the amount of limit availed by them. According to the plaintiff- Bank, as on 4th April, 1988 a sum of Rs. 3,99,438. 25 paise was due to the bank from the defendant. It has also alleged that the defendants have failed to pay the said amount inspite of notice and they have, therefore, filed the suit. The plaintiff-Bank prayed for a decree of the aforesaid amount with cost and future interest.

( 2 ) SUMMONS of the suit were issued to the defendants and they have also filed the written statement. The defendants however subsequently stopped appearing in Court and by an order dated 28th September, 1990 they were proceeded ex-parte and the plaintiff-Bank was directed to file ex-parte evidence by way of affidavits. Prior to the defendants having been proceeded ex-parte, they had admitted the documents which have been filed on record by the plaintiff. Ex-parte evidence was led by the plaintiff by means of affidavits and they placed certain additional documents on the file.

( 3 ) I have heard learned Counsel for the plaintiff.

( 4 ) THE plaint has been signed and verified by Mr. U. K. Murarka, Branch Manager-cum-Constituted Attorney of the plaintiff-Bank. The copy of the power of attorney and Resolution of the Bank have been marked as Exhibits P. I and P. 2. The deed of hypothecation whereby the goods were hypothecated with the Bank to secure the amount of cash credit availed by the defendants is Exhibit P-A. The demand promissory note are P. 6 and P. 8. Copy of the demand promissory note is Exhibit P. 3 and the statement of account duly certified under Bankers Book Evidence Act is Exhibit P. ll. The defendants confirmed the amount standing to their credit by the confirmation letter dated 15th January, 1986 Exhibit P. 10. Defendant No. 3 had given a personal guarantee to repay the amount which might be due from defendant Nos. 1 and 2 and the deed of guarantee is Exhibit P. 9.

( 5 ) FROM the documents on record it is clear that as on 4th April, 1988 a sum of Rs. 3,99,438. 25 paise was due from the defendant Nos. 1 and 2 to the plaintiff under the aforesaid cash credit limit availed by the defendants. Defendant No. 3 having given a personal guarantee to repay the amount which might be due from defendant Nos. l and 2 is also liable to make payment of the said amount. Liability of defendant Nos. l to 3 is, therefore, joint and several.

( 6 ) THERE is nothing on record to indicate that any payment has been made by any of the defendants to the plaintiff-Bank in liquidation of the aforesaid amount or to indicate that the said amount which the plaintiff-Bank is claiming is not due. I am, therefore, satisfied that the plaintiff-Bank is entitled to a de