The main legal point established in the judgment is the requirement for proper execution and admissibility of documents related to loan agreements and Equitable Mortgages, along with the applicability of stamp duty.

M. Venugopal, J.

1. Being aggrieved, the Appellant/Second Defendant has filed this Appeal as against the Judgment and decree dated 29.11.2005 in O.S. No.703 of 2004 on the file of the learned Additional District and Sessions Judge (Fast Track Court No.II), Coimbatore.

2. The First Respondent/Plaintiff has filed the Suit seeking the relief of directing the Second Respondent/First Defendant and the Appellant/Second Defendant to pay him jointly and severally a sum of Rs. 12,00,000/- along with interest at 24% per annum and in default of such payment to pass a Decree for the sale of the Mortgage property, etc.

3. On an appreciation of the oral and documentary evidence, the Trial Court has passed a Judgment directing the Appellant/Second Defendant and the Second Respondent/First Defendant to pay severally and jointly a sum of Rs.12 lakhs to the First Respondent/Plaintiff together with interest at 24% per annum from the date of filing of the Suit till the date of realisation, within a period of six months from the date of passing of the Decree i.e., on 29.11.2005 and further in case of default, directed the Mortgage property to be brought for sale in order to realize the Suit sum.

4. The Trial Court has framed the following issues for trial:

(i) Whether the First Respondent/Plaintiff is entitled to the relief of Suit claim?

(ii) Whether the First Respondent/Plaintiff is entitled to a Preliminary Decree?

(iii) Whether the Suit is barred by Limitation?

(iv) Whether the rate of interest claimed at 24% p.a. is an Excessive one?

(v) Whether the Suit is affected by impleading unnecessary parties?

(vi) To what relief, the First Respondent/Plaintiff is entitled to?

5. In regard to Issue Nos. 1 and 2, the Trial Court has observed that Ex.A1 Loan Agreement dated 05.06.1997 and Ex.A4-Appellant/Second Defendant’s Affidavit dated 09.06.1997 came into existence and on that day itself, a sum of Rs. 12,00,000/- through cheque of Vijaya Bank, Bangalore was given as seen from Exs.A1 and A2 and as spoken to by P.W.2 in his evidence and further loan availed by the Second Respondent/First Defendant, the Appellant/Second Defendant had mortgaged a property as confirmed by Exs.A3 and A4 dated 05.06.1997 and 09.06.1997 viz., the Appellant/Second Defendant’s Surety Agreement and the Affidavit, etc.

6. Insofar as the Issue No.3 is concerned, the Trial Court held that the Suit was not barred by limitation because of the relief sought for against the mortgaged property of the Appellant/Second Defendant.

7. For the Issue No.4, the Trial Court opined that the rate of interest at 24% p.a. claimed in the Suit claim could not be considered as a higher one and directed the Second Respondent/First Defendant and the Appellant/Second Defendant to pay the same.

8. As far as the Issue No.5 is concerned, the Trial Court came to the conclusion that the Second Respondent/First Defendant and the Appellant/Second Defendant are necessary parties.

9. In respect of the Issue No.6, the Trial Court held that the Second Respondent/First Defendant and the Appellant/Second Defendant were liable to pay the suit amount of Rs.12,00,000/- jointly and severally and to pay interest at 24% p.a. from the date of filing of the Petition till date of realization and to pay the same within a period of six months and in default to proceed against the mortgaged property by bringing it to auction sale.

10. Before the Trial Court, o the side of the First Respondent/Plaintiff witnesses P.Ws.1 and 2 were examined and Exs.A1 to A13 were marked. On the side of the Appellant/Second Defendant and the Second Respondent/First Defendant, witnesses D.Ws.1 and 2 were examined and no Exhibits were marked.

11. The points that arise for consideration in this Appeal are:

(i) Whether the Appellant/Second Defendant has entered into Ex.A1 Loan Agreement dated 05.06.1997 as Surety/Guarantor with the First Respondent/Plaintiff, agreeing to guarantee the repayment of Rs.12 lakhs borrowed by the Sec