IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Reserved on: 10.03.2026 Pronounced on: 13.03.2026 Uploaded on: 13.03.2026 Rasid and another …Appellants Versus State Bank of India …Respondent CORAM: HON’BLE MR. JUSTICE VIRINDER AGGARWAL Argued by: Mr. Sanjay Vij, Advocate and Mr. Uday Vij, Advocate for the appellants.

Mr. Mahesh Dheer, Advocate with Mr. Dheeraj Siwach, Advocate for the respondent.

VIRINDER AGGARWAL, J.

1. The present Regular Second Appeal has been filed by the appellants assailing the judgment and decree dated 30.04.1998 passed by the learned District Judge, Gurgaon, whereby the appeal preferred by the respondent– plaintiff bank was allowed and the judgment and decree dated 06.11.1997 passed by the learned Additional Civil Judge (Senior Division), Nuh was modified to the extent that the respondent–bank was held entitled to recover the decretal amount alongwith interest at the rate of 12.5% per annum from the date of suit till realization. The appellants herein namely Rasid and Habib are sons of defendant (Majid).

BACKGROUND FACTS

2. The respondent–plaintiff bank instituted a suit for recovery of Rs.81,246.80 against the defendant (Majid). The case of the bank, in brief, was that the defendant had approached the bank on 08.03.1988 for grant of loan for purchase of a tractor. The bank sanctioned a loan of Rs.68,000/- on 12.03.1988. The loan carried interest at the rate of 4% below the State Bank of India advance rate with a minimum of 12.5% per annum. In order to secure the repayment of the said loan, the defendant executed several loan documents including a mortgage deed whereby his agricultural land was mortgaged with the bank. Apart from the mortgage, the defendant also executed an agreement of hypothecation regarding the tractor purchased through the loan amount.

3. The loan amount was withdrawn by the defendant on 12.03.1988 and the same was debited to his loan account. The defendant failed to adhere to the repayment schedule and consequently the account became irregular. The defendant also executed revival letters dated 10.01.1991 and 30.11.1993 acknowledging his liability. As the defendant failed to clear the outstanding liability, the plaintiff bank instituted the suit seeking recovery of Rs.81,246.80 along with future interest and also prayed that the mortgaged and hypothecated property be sold in terms of the provisions of the Code of Civil Procedure.

4. The defendant contested the suit by filing a written statement. While admitting the fact that he had obtained the loan of Rs.68,000/- for purchase of a tractor, the defendant disputed the rate of interest claimed by the bank. It was pleaded that the loan was obtained for agricultural purposes and therefore the interest payable should not exceed 6% per annum. The plaintiff bank filed replication to the written statement wherein the averments made in the plaint were reiterated and those contained in the written statement were specifically denied. The plaintiff admitted that the defendant had deposited a sum of Rs.40,000/- on 20.06.1995 after the institution of the suit and clarified that the said amount had already been credited in the loan account of the defendant. The remaining pleas raised by the defendant were controverted and the stand taken in the plaint was reaffirmed.

5. On the basis of the pleadings of the parties, the learned Trial Court framed the following issues for determination:

1. Whether the plaintiff/bank is entitled to recover a sum of Rs.81,246.80 ps with costs and interest as prayed for? OPP

2. Whether the suit of the plaintiff is not maintainable in its form nor the plaintiff has locus standi to file the same? OPD

3. Whether the plaintiff is estopped from filing the present suit by his own act and conduct? OPD

4. Relief.

6. The parties thereafter led evidence in support of their respective pleadings. The plaintiff bank examined its officials and proved the loan documents including the mortgage deed, hypothecation agreement, statements of