IMPORTANT POINT
The court established that issues must be framed based on the pleadings and that findings based on unpleaded matters, such as suppression of facts regarding unrelated loans, are erroneous and can lead to the reversal of appellate decisions.

JUDGMENT :

G. ARUL MURUGAN, J.

Prayer: Second Appeal filed under Section 100 of C.P.C. against the judgment and decree dated 10.03.2008 made in A.S. No. 370 of 2006, on the file of the VI Additional City Civil Court, Chennai, reversing the judgment and decree dated 28.11.2002 in O.S. No. 5563 of 1997 on the file of XVII Assistant Judge, City Civil Court, Chennai.

1. The instant second appeal is filed by the plaintiff challenging the judgment and decree dated 10.03.2008 in A.S. No. 370 of 2006 on the file of the VI Additional City Civil Court, Chennai by reversing the judgment and decree dated 28.11.2002 in O.S. No. 5563 of 1997, on the file of the learned XVII Assistant Judge, City Civil Court, Chennai. Respondents 1 to 3 herein are the defendants 1 to 3 in the suit.

2. For the sake of convenience, the parties are referred to as per the ranking before the Trial court.

3. According to the plaintiff, the first defendant is carrying on business as a tourist taxi operator and has availed a loan to purchase an Ambassador car bearing registration No. TSB 6768. The first defendant executed a Hire Purchase Agreement on 03.03.1987 with respect to the ambassador car, purchased by him, by using the money advanced by the plaintiff. Further, the first defendant executed a demand promissory note in favour of the plaintiff for Rs. 1,00,000/- on 31.03.1987 and he also executed an agreement agreeing to repay the borrowed money in monthly instalments from June 1987 and to pay the entire amount on or before 28.02.1991. Further, the first defendant executed a hypothecation deed on 31.03.1987, thereby hypothecating the ambassador car in favour of the plaintiff. The 2nd and 3rd defendants executed a separate agreement on 31.03.1987 as guarantors for the due repayment of the money borrowed by the first defendant. They also agreed that the agreement shall be a continuing guarantee and that they would reimburse the bank in case of default. However, the first defendant did not pay the promised amount. The first defendant submitted a letter on 20.10.1990 stating that he was unable to repay the money due to acute financial strain and that he would repay the money at the rate of Rs. 3,000/- per month. Further, on 11.05.1991, the first defendant acknowledged his liability to pay a sum of Rs. 1,90,660.43 to the plaintiff as on 30.03.1991. Since the first defendant failed to pay the amount, the plaintiff issued a lawyer's notice on 19.02.1992. Though, the first defendant received the notice, he did not send any reply. When the plaintiff attempted to seize the vehicle, the vehicle was secreted by the first defendant. As a result, the plaintiff filed a suit for the recovery of money.

4. The defendants 1 to 3 filed a written statement controverting the claim of the plaintiff. The defendants 1 to 3 while admitting the loan availed through the plaintiff bank, disputed the quantum and the plaintiff has got the promissory note with an exorbitant rate of interest. The defendants further stated that they have paid the part of the amount in instalments. Since the vehicle was deteriorated due to efflux of time, the defendants are unable to pay the balance amount and they informed the plaintiff-bank to take further steps. The defendants incurred the losses in their tourist business, and due to a major mechanical problem of the vehicle, they reported it to the plaintiff bank, and as per the plaintiff's instructions, they sent the vehicle to a workshop in the Vadapalani area. The defendants deny the allegation that the first defendant has acknowledged his liability, but the plaintiff bank invited the first defendant and obtained his signatures in several papers stating that his signatures are required for selling the vehicle and without the knowledge of the defendants, the vehicle was sold by the plaintiff-bank. According to the defendants, the plaintiff without any notice to the defendants sold the vehicle and the entire balance was recovered and therefore the question of repa