IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Reserved on :- 10.02.2026 Date of Pronouncement:-12.02.2026 Uploaded on:-12.02.2026 State Bank of Patiala … Appellant Versus M/s Lakshmi Narain Babu Ram and Others ... Respondents ****

CORAM: HON'BLE MR. JUSTICE VIRINDER AGGARWAL Argued by :-

Mr. Sumit Narang, Advocate for the appellant.

None for the respondents.

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VIRINDER AGGARWAL , J .

1. The appellant–plaintiff, aggrieved by the judgment and decree dated 03.01.1991 passed by the learned District Judge, Faridkot, whereby the well-reasoned judgment and decree dated 08.08.1986 of the learned Sub-Judge Ist Class, Faridkot, was reversed, has invoked the appellate jurisdiction of this Court by filing the present Regular Second Appeal (hereinafter referred to as “RSA”). The appellant-Bank seeks restoration of the decree granted by the learned Trial Court, contending that the impugned judgment suffers from patent perversity, errors of law, and a flawed appreciation of the evidence on record, resulting in miscarriage of justice. The appellant accordingly prays for setting aside the impugned judgment and decree and for reinstatement of the decree passed by the learned Trial Court.

2. The factual matrix leading to, and culminating in, the present appeal may be succinctly delineated as under:-

“The State Bank of Patiala instituted a suit for recovery of `50,965.46, comprising `35,011.50 as principal and `15,953.96 as interest, through its Regional Manager against the respondent– defendant firm, M/s Lakshmi Narain Babu Ram. The suit arose from demand negotiation of multiple documentary bills and hundies tendered by defendant No.2 between October and November 1978, for which payments were made by the Bank after deduction of charges. Upon dishonour of the bills, the Bank took delivery of goods, sold the same, and adjusted the proceeds. Subsequently, by mutual settlement, defendant No.2 executed promissory notes dated 30.11.1979 for `35,011.50 with agreed interest, duly guaranteed by defendants No.3 and 4. After adjustment of payments and sale proceeds, the outstanding interest was computed at `15,953.96, giving rise to the present suit.”

3. Upon service of summons, the defendants entered appearance and filed their respective pleadings as under:-

“The suit was contested by the defendants. Defendants No.1 and

2 filed separate written statements, while defendants No.3 and 4 filed a joint written statement. Defendants No.1 and 2 pleaded that the hundies were dishonoured for reasons beyond their control, leading to sale of goods by the Bank, and that the balance amount was agreed to be paid in instalments over eight years. They alleged that the promissory notes and loan documents were vitiated by fraud and misrepresentation, asserting that a settlement for `35,011.50 without interest was accepted and that `9,600/- had been paid. Defendants No.3 and 4 similarly contended that their guarantee was limited to the said amount payable in instalments and was obtained through fraud.”

4. Upon consideration of the pleadings and submissions of the parties, the learned trial Court framed the following issues for adjudication:-

1. Whether the plaintiff is a corporate body as alleged in para No.1 of the plaint? OPP

2. Whether the plaint has been signed, verified and presented by a competent person? OPP

3. Whether the defendant executed demand promissory note dated

30.11.1979 under fraud, mis-representation and undue influence?

OPD

4. Whether the plaintiff obtained the signatures of defendants No.3 and 4 on guarantee deeds and demand promissory note dated 30.11.1979 by fraud, misrepresentation and undue influence? OPD

5. Whether defendants No.3 and 4 stood guarantee only to the extent of `35,001.50 paise by way of instalments as alleged?OPD (Objected to) (Objection overruled).

6. Whether defendants No.3 and 4 stood guarantee for the interest of principal amount? OPD

7. Whether the plaintiff has committed breach of contract as alleged and defendant's liability stood exti