Sat Pal ( 1 ) THIS is a suit filed on behalf of the plaintiff-bank against thedefendants under Order 34 of the Code of Civil Procedure for recovery of Rs. 5,59,314. 26 with costs alongwith future and pendente lite interest @ 18% p. a. It hasalso been prayed in this suit that a preliminary decree for the aforesaid amount withcosts of the suit alongwith future and pendente lite interest @ 18% p. a. in favour ofthe plaintiff and against the defendants be passed and on non-payment of thedecretal amount in the Court or to the plaintiff-bank within the time fixed, a finaldecree for sale of mortgaged property bearing No. E-156, Shastri Nagar, Delhi-52be passed in favour of the plaintiff and against the defendant No. 4 for realisationof the suit amount. ( 2 ) ON 1/02/1990 the suit came up for hearing and summons weredirected to be issued to the defendants for 10/05/1990. Alongwith the suit anapplication bearing IA No. 798/90 was also filed. Notice of this application wasalso issued for 10/05/1990 and meanwhile the defendant No. 1 was restrainedfrom disposing of, ienating, transferring, parting-with possession or encumbering the hypothecated machinery at the factory premises of defendant No. 1 at 20-A, S. P. Mukherjee Market, faiz Road, Karol Bagh, New Delhi and at Khasra No. 363and 342, Village Mangolpur Khurd, New Delhi. Defendant No. 1 was furtherrestrained from disposing of, alnating or transferring the hypothecated goodsexcepting in the normal course of the business. ( 3 ) SINCE the defendants failed to appear despite service, the defendants wereproceeded against ex-parte vide orders dated 23/01/1992. On that date, theplaintiff was also directed to file affidavits by way of evidence. Pursuant to the saidorder, the plaintiff has filed affidavit of Shri N. K. Garg, Sr. Manager, East Patelnagar Branch of the plaintiff-bank. All the averments and allegations made in theplaint have been proved by the said affidavit. ( 4 ) SHRI N. K. Garg in his affidavit has stated that Shri S. K. Kapoor, Sr. Managerof the plaintiff-bank was holding general power of attorney dated 10th November,1975 and he was authorised to file the present suit, verify the pleadings and engagethe Counsel / Advocate for and on behalf of the plaintiff-bank. The general powerof attorney in favour of Shri S. K. Kapur is Ex. Managerof the plaintiff-bank was holding general power of attorney dated 10th November,1975 and he was authorised to file the present suit, verify the pleadings and engagethe Counsel / Advocate for and on behalf of the plaintiff-bank. The general powerof attorney in favour of Shri S. K. Kapur is Ex. P-l. It has further been stated that thedefendant No. 1 approached the plaintiff for grant of cash credit facility againsthypothecation to extent of Rs. 1. 50 lacs against hypothecation of costs of rawmaterial, semi-finished / finished goods as well as the machinery and thereafter theplaintiff-bank sanctioned the said facility after defendants 1 to 3 had executed anagreement of cash credit dated 5/12/1983 for Rs. 1. 5 lacs alongwith list ofhypothecated stocks, a demand promissory note dated 5/12/1983 for Rs. 1. 50 lakhs, an agreement of hypothecation of goods dated 5/12/1983 andletter of undertaking dated 5/12/1983. The said documents are exhibitsp-2, P-3, P-4 and P-5 respectively. ( 5 ) SHRI Gaig has further stated in his affidavit that the interest on the saidcredit facilities was settled @ 65. % p. a" over the Reserve Bank of India rate subjectto minimum of 16. 5% p. a" such interest being payable with quarterly rests and thesaid interest was further increased @ 2% above the rate of interest leviable in caseof default on the part of the defendants. ( 6 ) IT has further been stated in the affidavit of Shri N. K. Garg that the plaintiff bank enhanced the Cash Credit limit from Rs. 1. 50 lacs to Rs. 2. 00 lacs on the sameterms and conditions in July, 1984 and in consideration thereto the defendantsexecuted a demand promissory note dated 7/07/1984 for Rs. 50,000. 00,agreement of hypothecation of goods dated 7. 7. 84and continuity letter dated 7. 7. 89regarding renewal of documents and confirmation of last balance. The aforesaiddocuments are Exs. P-6, Ex. P-7and Ex. P-8. ( 7 ) IT has then been stated in the affidavit that the plaintiff-bank increased theabove mentioned facility to the extent of Rs. 3. 00 lacs on the same terms andconditions and in consideration thereof, the defendants executed a demandpromissory note dated 1. 12. 84 for Rs. 1. 00 lac, agreement of hypothecation of goodsdated 1/12/1984and continuity letterdated 1/12/1984regardingrenewal of documents and confirmation of the last balance. The said documentsare Exs. P-9 to Ex. P-ll. 3. 00 lacs on the same terms andconditions and in consideration thereof, the defendants executed a demandpromissory note dated 1. 12. 84 for Rs. 1. 00 lac, agreement of hypothecation of goodsdated 1/12/1984and continuity letterdated 1/12/1984regardingrenewal of documents and confirmation of the last balance. The said documentsare Exs. P-9 to Ex. P-ll. It is also stated in the affidavit that the defendant No. 1acknowledged its liability vide balance confirmation letters dated 11/02/1984, 25/07/1984, 22/01/1985, 12/07/1985 and 25/05/1988. Thesaid documents are exhibits as P-12, P-13, P-14, P-15 and P-16 respectively. A copyof the statement of A/c. in respect of the said Cash Credit A/c. kept by the plaintiffbank in the regular course of its business has been proved and is Ex. P-17. It hasfurther been stated in the affidavit that on the date of filing of the suit, a sum of Rs. 5,20,695. 16 was due and payable by the defendants to the-plaintiff bank in theaforesaid Cash Credit A/c. ( 8 ) IT has then been stated in the affidavit that in consideration of the term loanfor Rs. 1. 00 lac sanctioned/granted to the defendant No. 1, the said defendantexecuted a demand promissory note dated 5/12/1983 for Rs. 1. 00 lac andan agreement of hypothecation of assets dated 5. 12. 83 and letter of undertakingdated 5/12/1983. The said documents are exhibits P-18, P-19 and P-5. Ithas also been stated in that affidavit that the rate of interest was settled @6. 5% p. a. over the Reserve Bank of India rate with a minimum of 16. 5% p. a. with quarterlyrests. The defendant No. 1 has admitted its liability in this A/c. and signed balanceconfirmation letters dated 18/01/1985, 12/07/1985 and 25/05/1988. The said letters are Exs. P-20, P-21 and P-22. A copy of the statement of account inrespect of said term loan A / c. kept by the plaintiff in the regular course of businessis Ex. P-23. It has then been stated in the affidavit that on the date of filing of thesuit a sum of Rs. 38,619. 10 was due and payable by the defendants to the plaintiff-bank in the term loan A/c. ( 9 ) IT has further been stated in the affidavit that the defendant No. 4 executedan agreement of guarantee in favour of the plaintiff on 5. 12. 83 under which heguaranteed the entire amounts payable by the defendant No. 1 under the abovementioned accounts. 12. 83 under which heguaranteed the entire amounts payable by the defendant No. 1 under the abovementioned accounts. The said agreement is Ex. P-24. The defendant No. 4 furtherexecuted agreements of guarantee in favour of the plaintiff on 7. 7. 84, 1. 12. 84 andthese agreements are Exs. P-25 and P-26 respectively. Defendant No. 4 alsodeposited with the plaintiff-bank the title deeds i. e. sale deed dated 13/05/1972in respect of his immovable property bearing No. E-156, Shastri Nagar, Delhi andcreated an equitable mortgage thereof in favour of the plaintiff over the saidproperty to secure the repayment of the aforesaid advance/loan facilities made orto be made from time to time, by the plaintif-bank to defendant No. 1. Sale Deeddated 15. 5. 72 in respect of the said mortgaged property is Ex. V-17. ( 10 ) IT has also been stated in the affidavit that defendant No. 4 executed lettersof confirmation regarding execution of agreement of guarantee dated 5. 12. 93which is Ex. P-28 and dated 1. 12. 84 which is Ex. P-29. The defendant No. 4 alsoexecuted letters of confirmation regarding continuing the guarantee and deposit oftitle deeds of immovable property as additional security dated 5. 12. 83,6. 7. 84 and1. 12. 84, the same are Exs. P-30 to Ex. P-32. ( 11 ) IT has further been stated in the affidavit that a total sum of Rs. 5,59,314. 26as on the date of filing of the suit is due and payable by the defendants to theplaintiff-bank and the defendants are also liable to pay interest @ 18% p. a. from thedate of suit till realisation. ( 12 ) ON perusal of the documents proved on record, I am satisfied that theplaintiff has proved its claim against the defendants jointly and severally and alsothe creation of equitable mortgage by defendant No. 4 over the mortgagedproperty to secure the repayment of its dues. The plaintiff is ntitled to a decree. Accordingly, I hereby pass a decree for a sum of Rs. 5,59,314. 26p in favour of theplaintiff and against the defendants, jointly and severally, together with interest@18% p. a. from the date of filing of the suit till realisation. I also pass a preliminarydecree for payment in favour of the plaintiff and against defendant No. 4 for theaforesaid amount of Rs. 5,59,314. 26 together with interest @18%p. a. from the dateof institution of the suit till realisation and costs. I also pass a preliminarydecree for payment in favour of the plaintiff and against defendant No. 4 for theaforesaid amount of Rs. 5,59,314. 26 together with interest @18%p. a. from the dateof institution of the suit till realisation and costs. Defendant No. 4 is given sixmonths time to satisfy the decree. In the event of defendants failure to satisfy thedecree within six months, the plaintiff will have liberty to move for final mortgagedecree for sale of the mortgaged immovable property being No. E-156, Shastri Nagar, Delhi-52 for realisation of decretal dues. I further order sale of the plant andmachinery as well as stocks hypothecated with the plaintiff and the net saleproceeds be applied towards part satisfaction of the decretal dues of the plaintiff. In the even of the net sale proceeds falling short of the decretal dues of the plaintiff,liberty is given to the plaintiff to move for drawing up personal decree for thebalance amount against the defendants personally and to proceed to recover thedues under the decree from the defendants personally.