The central legal point established in the judgment is the importance of adhering to banking regulations and circulars issued by the Reserve Bank of India in determining the recovery of agricultural loans.

JUDGMENT

1. This first appeal under Section 96 CPC has been filed by plaintiff- appellant against the judgment and decree dated 12-8-1991 passed by the District Judge Jaipur District, in Suit No.82/1981, whereby and whereunder dismissed the suit for recovery of Rs.13,570.07 and future interest.

2. The facts of the case are that respondents defendants No.1&2 (hereafter 'the defendants') obtained agricultural loan of Rs.4000/- from plaintiff Bank on 31-1-1970 and mortgaged certain agricultural land, and defendants Nos.3 to 6 are legal representatives of the guarantor. Plaintiff claimed that loan was to be repaid in six monthly instalments along with interest at the rate of 5% above the rate of Reserve Bank of India, but minimum 9% per annum. Since defendants No.1&2 failed to repay the agricultural loan, the plaintiff filed the suit for recovery of agricultural loan on 9-11-1981.

3. On issuing notices respondents-defendants No.1&2 (hereafter 'the defendants') filed written statement on 26-9-1986 and denied to have taken any loan and stated that the agent appointed by plaintiff bank obtained signatures of many agriculturists but no amount was paid to agriculturists. The said agent obtained signatures of defendants also, but no amount was given to them. The defendants are not bound by such documents. It was further stated that the plaintiff bank never cleared the accounts to defendants nor they have taken any loan.

Defendants also filed amended written statement on 22-3-1991 and placing reliance on Bank's circular (Ex.A-1) stated that since defendants are agriculturists and the amount in question is agricultural loan, they are entitled for exemption upto an amount of Rs.10,000/-.

4. On the basis of pleadings of parties the trial court framed nine issues. First, Whether plaintiff is a corporate body and Mohan Lal Sharma is entitled to file the suit? Second, whether according the contents of paras No.3&4, defendants No.1&2 executed mortgage deed dated 17-1-1970 and mortgaged their agricultural field in favour of plaintiff bank and obtained loan of Rs.4000/-? Third, whether defendants No.3to 6 are real brothers of Ramdev, who executed guarantee deed dated 31-1-1970 for loan of Rs.4000/- obtained by defendants No.1&2, and therefore, they are responsible for repaying the loan of defendants No.1&2? Fourth, whether statement of loan as shown in schedule-A was maintained properly, which was made understood to defendants and who executed acknowledgments on 12-6-1971, 30-6-1071, 31-12-1971, 30-9-1973, 31-12-1983, 8-5- 1985, 20-1-1976, 3-7-1978 and on 1-12-1979? Fifth, whether plaintiff bank is entitled to recover from defendants Rs.13570.07 principle with interest at the rate of 15% from 9-11-1981 with quarterly and six monthly increase and are entitled to recover the amount from auction of mortgaged land of khasra No.417, 418, 419 and 562 measuring 27 bighas and 6 biswa in village Anantpura Chimanpura sub tehsil Govindgarh District Jaipur? Sixth, whether loan documents are forged? Seventh, whether defendants are entitled for Rs.500/- six monthly instalments for repaying the loan? Eights, Relief? Seventh-A, whether according to amended written statement, defendants are entitled for exemption upto loan of Rs.10,000/-?

Plaintiff examined two witnesses Pw.1 Jagdish Chandra Khanna, Pw.2 Mohan Lal Sharma and Pw.3 Kuldeep Singh Kamal and exhibited documents. Defendants examined Dw.1 Kana.

5. The trial court considered oral and documentary evidence led by both parties and decided issues No.1,2,3,4,6 and 7 in favour of plaintiff Bank. But relying on judgment in case of Bank of India Vs. Karnam Ranga Rao [AIR 1986 Karnataka 242] and circular of the bank, issues No.5 and 7A and 8 have been decided against plaintiff Bank and dismissed the suit vide impugned judgment dated 12-8-1991.

6. Being aggrieved of the judgment and decree present first appeal has been filed.

7. Heard learned counsel for plaintiff bank and perused the impugned judgment and decree as