The acknowledgment of the suit debt and the documentary evidence provided by the plaintiff were crucial in establishing the entitlement to the decree for the loan amount with interest.

This appeal has been directed against the decree and Judgment in O.S.No.66 of 1994 on the file of the Court of Subordinate Judge, Sankagiri. The plaintiff UCO Bank has lost his case before the trial Court is the appellant herein.

2. The averments in the plaint relevant for the purpose of deciding this appeal in brief

are as follows:

The first defendant had approached for a loan with the plaintiff for the purpose of a Tractor and a Trailor for a sum of Rs.1,18,500/-and the same was sanctioned by the plaintiff with the following conditions.

a) That the loan is to be guaranteed by equitable mortgage by deposit of title deeds with

the plaintiff.

b) That the tractor to be purchased should be hypothecated with the plaintiff.

c) That the loan amount be paid within seven years

d) that the first defendant shall pay interest at 12.5%

e) interest is calculable at half yearly rests and as per the varying rates of interest then and there according to the directions of the Reserve Bank of India.

The defendants agreeing for the above said conditions, availed loan to the tune of Rs.1,18,500/- on 16. 1983 by executing the documents viz.,

(1) Demand promissory note in favour of the plaintiff

(2) Letter to waive presentment of the promissory note

(3) Agreement relating to Term Loan

(4) Agreement relating to Hypothecation of Standing Crops

(5) Agreement relating to Hypothecation of Tractor

(6) Guarantee Agreement

(7) Letter of confirmation of deposit of Title Deeds in favour of the plaintiff. The second defendant stood as a guarantor for the suit loan availed by the first defendant and executed a deed of guarantee dated 16. 1983 which is a continuing guarantee till the discharge of the loan. The defendants at the time of availing loan, after executing the above said loan documents, have also agreed to pay interest at 12.5% p.a. Further varying rate of interest by the directions of the Reserve Bank of India and at present they are bound to pay interest at the rate of 15.5% p.a. from 10. 1991. The defendants, on 16. 1983 have created mortgage by deposit of title deeds and all the relevant documents were produced by the defendants as a collateral security for the loan availed by them. The defendants have agreed to pay the loan amount within seven annual instalments. The defendants have also acknowledged the liability by executing the letters of confirmation dated 11. 1984, 110. 1985, 28. 1986, 27. 1987, 14. 1988, 6. 1989,26. 1991 and 28. 1992. As per the books of account maintained by the plaintiff in the regular course of business transaction, a sum of Rs.2,16,935/-is the amount due under the suit loan as on 110. 1993. The defendants are not entitled to any relief under Debt Relief Act since the plaintiff Bank is a Nationalised Bank. The plaintiff is entitled to claim interest at the rate of 14.5% p.a. The plaintiff had issued notice dated 16. 1993 for which there was no reply received from the defendants. Hence the suit.

3. The second defendant had adopted the written statement filed by the first defendant as follows:

The first defendant has submitted a loan application with the plaintiff in the first week of January 1983 for the purchase of Tractor and Trailor for a sum of Rs.1,18,400/-and after satisfying with the requirements, the plaintiff has sanctioned the loan in favour of the first defendant for which the second defendant stood as a guarantor. A deed of hypothecation was also executed by the first defendant on 11. 1993 and has also executed a promissory note, term loan agreement on 11. 1983 agreed to repay the loan in 10 half yearly instalments together with interest at 12.5% p.a. The second defendant executed a letter of guarantee on 11. 1983 itself and that the first defendant has also mortgaged the Tractor and Trailor purchased by him after availing the loan by creating equitable mortgage by deposit of title deeds and that the allegation that the first defendant had agreed to repay the loan in seven years and that had agreed to