J. K. Mehra,j. ( 1 ) THIS is a suit for recovery of Rs-26,46,211. 53 paisetogether with pendentelite and future interest and costs of the suit filed by theplaintiff against the defendant on account of the amount outstanding against thefacility of Deferred Payment Guarantee and Bank Performance Guarantees givenby the plaintiff-Bank for the defendant from time to time. ( 2 ) DEFENDANT could not be served with the summons of the suit in the ordinary way despite repeated attempts and ultimately the defendant was served by way of proclamation published in The Hindustan Times newspaper dated22. 5. 1992. Despite such service, no one appeared on behalf of the defendant andon 12. 8. 1992, the defendant was proceeded against ex-parte and the plaintiff wasdirected to lead evidence on affidavits. ( 3 ) DURING the pendency of the suit, the plaintiff moved an application, beingi. A. No. 1014/91whereon the Court on 12. 8. 1992 issued the attachment order inrespect of hypothecated machinery being "1x90 C. K. L. and T. Proclaim Hydraulicexcavator" and the said attachment has been effected and is still in existence. ( 4 ) CONSEQUENT upon the taking over of the banking establishment of theplaintiff-Bank by Punjab National Bank, the plaintiff-Bank merged into Punjabnational Bank and an application, being LA. No-369/94 was filed by the plaintifffor carrying out necessary amendment in the name of the plaintiff. The saidapplication was allowed on 15. 3. 1994 and the cause title of the suit was orderedto be amended accordingly. ( 5 ) PURSUANT to the directions of the Court, the plaintiff filed an affidavit ofshri M. L. Thakur, Branch Manager of the plaintiff-Bank, who has proved theallegations made in the plaint and the various documents filed on behalf of theplaintiff-Bank in support of its claim against the defendant. Exhibit P-1 is the truephotocopy of the power of attomey in favour of said Shri M. L. Thakur authorisinghim to institute the present suit. A perusal of the said power of attorney proves thatthe suit has been filed by a competent and duly authorised person. Exhibit P-2 isthe account opening form, duly signed by Shri Raja Ayyanger, as the sole proprietor of the defendant firm. Exhibit P-3 is the letter of authority given by Shri Rajaayyanager to Shri Reena Mohalla to operate the account. Exhibit P-4 is thespecimen signature card. Exhibit P-5 is the original pay-in-slip for Rs. 1,000. Exhibit P-2 isthe account opening form, duly signed by Shri Raja Ayyanger, as the sole proprietor of the defendant firm. Exhibit P-3 is the letter of authority given by Shri Rajaayyanager to Shri Reena Mohalla to operate the account. Exhibit P-4 is thespecimen signature card. Exhibit P-5 is the original pay-in-slip for Rs. 1,000. 00which was deposited at the time of opening the current account with the plaintiffbank. Exhibit P-6 is the Jetter dt. 12. 3. 1987ofthe Plaintiff-Bank, sancrioning creditfacility of "deferred Payment Guarantee (Bills co-accepted limit)" of Rs. 32. 97lakhs. The said letter is signed by Shri S. K. Aggarwal. A. G. M. of theplaintiff-Bank,whose signature has been identified by the said deponent. Since the defendantcould not provide the equitable mortgage as per the letter of sanction, thedefendant agreed to contribute margin to the extent of 30% vide its letter dated12. 3. 1987 which is Exhibit P-7. Exhibit P-8 is a letter dated 14. 3. 1987 whereby thedefendant undertook to deposit the amount of instalment under Deferredpayment Guarantee facility at least 7 days before the due date and in default,agreed to pay interest. Vide Exhibit P-9, the defendant charged and hypothecatedone Landt Proclaim, Crawler, Hydraulic Excavator, purchased for Rs. 23. 11 lakhs. The defendant in consideration of the sanction of the aforesaid facility executedvarious documents, which are marked as Exhibit P-10, being forwarding letter. Exhibit P-11 is the counter-guarantee. Exhibit P-13 is the agreement ofhypothecation of goods. Exhibit P-14 is the letter in shape of Form L-123. Exhibitp-15 is the hypothecation of goods to secure a demand cash credit. Likewise thedefendant has been availing of this facility and has been operating this accountfrom time to time. The plaintiff has produced various documents, proving theavailment of the said guarantee facility by the defendant. On 14. 3. 1987, thedefendant deposited Rs. 10 lakhs towards 30% margin, which was invested incertificates for Re Investment Schemes (CRIS) for Rs. 5 lakhs each and pledged thesame with the Bank. Exhibit P-44 are the said CRIS. Exhibit P-16 is a letterconfirming the pledges of the said CRIS, duly signed by the defendant. Exhibitp-l 7 is the letter of the defendant confirming having purchased the aforesaidexcavator. Exhibit P-18 is the letter of Larsen and Tubro Limited intimating the plaintiff-Bank about having submitted the original bills of exchange to the IDBI,who was to make the payment. Exhibit P-16 is a letterconfirming the pledges of the said CRIS, duly signed by the defendant. Exhibitp-l 7 is the letter of the defendant confirming having purchased the aforesaidexcavator. Exhibit P-18 is the letter of Larsen and Tubro Limited intimating the plaintiff-Bank about having submitted the original bills of exchange to the IDBI,who was to make the payment. Exhibit P-19 is the letter confirming to the plaintiff-Bank about the State Bank of India having co-accepted the ten bills of exchange. Exhibit P-20 is the letter of L andt giving details of the bills of exchange. Since thedefendant failed to pay the amount of certain bills of account, the plaintiff -Bankon 16. 6. 1988 prematurely discounted the CRIS pledged with the plaintiff-Bank toadjust 30% margin to be contributed by the defendant and the balance ofrs-3,03,698. 60 paise was reinvested by the plaintiff in further CRIS vide Exhibit P-45. The plaintiff has proved various documents in support of its contention thatthe defendant has been a defaulter in making the payment of the outstandings andthe same have been exhibited on record. Exhibit P-21 and Exhibit P-39 are thestatements of accounts in respect of defaulted guarantee accounts and currentaccount No. 432 respectively, duly certified under the Banker s Books Evidenceact, showing the amount due under the said accounts from the defendant. Exhibit P-40 is the legal notice sent to the defendant, calling upon the defendantto adjust the overdraft and pay the amount that has become due on account ofvarious instalments, paid by the plaintiff bank for the Deferred Payment Guarantee in respect of the machine purchased by the defendant. Exhibit P-41 is thereturned envelope containing the said notice. Exhibit P-42 is another legal noticesent to the defendant, calling upon him to clear the outstanding and Exhibit P-4sis the postal receipt in respect of the said notice having been issued to thedefendant. Exhibits P-44to P-48 are the Certificates of Re Investment Schemesand Fixed Deposit Schemes, which have been encashed by the Bank and adjustedagainst the amount due from the defendant. ( 6 ) THE defendant failed to effect proper and adequate insurance for thehypothecated machinery and the plaintiff-Bank in terms of the agreement ofhypothecation got the same insured for the period 27. 3. 1989 to 26. 3. 1990 and6. 5. 1990 to 5. 5. 1991 by paying the premimum of Rs. 36,604. 00 and Rs. 13,330. 00. ( 6 ) THE defendant failed to effect proper and adequate insurance for thehypothecated machinery and the plaintiff-Bank in terms of the agreement ofhypothecation got the same insured for the period 27. 3. 1989 to 26. 3. 1990 and6. 5. 1990 to 5. 5. 1991 by paying the premimum of Rs. 36,604. 00 and Rs. 13,330. 00. respectively and debited the same to the current account of the defendant. Exhibitsp-22 and P-23 are the cover notes of insurance. ( 7 ) ON perusal of the documents proved on record, affidavit and theaverments in the plaint, I am satisfied that the plaintiff has proved its claim againstthe defendant and the plaintiff is entitled to a decree for a sum ofrs-26,46,211. 53 paise. I accordingly pass a decree in favour of the plaintiff andagainst the defendant for recovery of Rs-26,46,211. 53 paise together with pendentelite and future simple interest @ 16. 5% p. a. from the date of the institution of thesuit till realisation and costs. ( 8 ) THE plaintiff is also entitled to sell the hypothecated machinery, which wasattached during the pendency of the suit vide order dated 12. 8. 1992 and theproceeds of the sale shall be adjusted towards satisfaction of the decree or partthereof, as the case may be. Suit is disposed of in the above terms.