Mr. Paramjeet Singh, J.: - This judgment will dispose of R.S.A. No. 310 of 1988 and Cross Objections No. 23-C of 1988 which arise from the judgment and decree dated 23.09.1987 passed by learned Additional District Judge, Amritsar.

2. This second appeal has arisen out of a suit for recovery of Rs.36021-01 paisa brought by the appellant-plaintiff-Punjab National Bank through its Manager. The Court of first instance decreed the suit for recovery of Rs. 36021-01 paisa with pendente-lite and future simple interest at the rate of 12% per annum on the principal amount with costs. The defendants were held jointly as well as severally liable to pay the decretal amount. Against that, respondents-defendants preferred an appeal before the District Judge which was entrusted to the learned Additional District Judge, Amritsar. Learned Additional District Judge, Amritsar modified the decree by observing as under:-

“The trial Court while passing the decree did not keep in mind that the principal outstanding amount had to be worked out again on the basis of 12% P.A. simple interest and the amount of penal interest charged had to be deducted therefrom. Under the circumstances the above rectification in the two accounts will have to be carried out and the decretal amount modified accordingly. In the result, I find no merit in this appeal and dismiss the same with costs. The decree of the trial Court is however modified to the extent that the decretal amount be worked out on the basis of simple interest @ 12% per annum and the amount charged on account of penal interest be deducted therefrom. Decree-sheet be prepared accordingly.”

3. Virtually the learned lower appellate Court has affirmed the findings of the Court of first instance except with small variation keeping in view the findings recorded by the Court of first instance itself. This regular second appeal has been preferred by the Punjab National Bank against the judgment and decree dated 23.09.1987 of the learned Additional District Judge, Amritsar, in which the cross-objections have been filed.

4. The facts of this case are simple and clear which are as under:-

5. The appellant-plaintiff bank sanctioned a term loan of Rs.25,000/-, Cash Credit (hypothecation) of Rs. 16,000/- and Cash Credit (Pledge) of Rs.20,000/- to the defendants. Defendants only availed of term loan of Rs.25,000/- and cash credit (hypothecation) of Rs. 16,000/- on 28.04.1975 and 06.05.1975, on hypothecation of assets to secure term loan and stock in trade to secure cash credits respectively. The defendants executed various documents viz agreement and pronotes dated 28.04.1975 and 06.05.1975, in lieu of sanctioning of the aforementioned loan in their favour. The detail of these documents is mentioned in para no.3 of the plaint. The defendants agreed to pay interest calculated at the rate of 3% over the Reserve Bank of India’s rate with a minimum of 12% per annum. The defendants undertook to pay the amount of loan in question in ten half-yearly installments of Rs.2500/- each. Out of the amount of Rs.25,000/- advanced as term loan, the defendants did not pay anything and balance outstanding at the time of filing the suit with regard to this loan came to Rs.31,802-70 paise. Similarly, defendants did not deposit any amount in cash credit loan except Rs.1000/- on 19.02.1979 and balance outstanding with regard to this account at the time of filing the present suit was Rs.4218-31 paise.

6. On notice, defendants appeared and filed their written statement inter-alia alleging that the suit was not properly valued for the purposes of court fee and jurisdiction on the ground that the claim was made against the principal debtors and also against the guarantors and separate court fee was required to be paid. Further it was alleged that the suit was not within limitation and the suit was filed by unauthorized person. Plaintiff filed replication to the written statement controverting the contents of the written statement and re