( 1 ) THIS is a suit under Order XXXIVCivil Procedure Code for recovery of Rs. 8,91,827. 00 being principal sum due as on 13. 12. 1995 payable by the defendants jointly and severally to the plaintiff bank together with pendente lite and future interest along with cost of the suit. ( 2 ) THE plaintiff bank is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The defendant No. 2 is the sole proprietor of defendant No. 1 duly registered as Small Scale Industries Firm with Directorate of Industries, Kashmere Gate, Delhi. It is averred that defendant No. 2 approached the plaintiff for grant of certain banking facilities for the establishment and enhancement of trade/business activities and after processing the application the following credit facilities were sanctioned in favour of defendant No. 1 on 30. 3. 1991: "a) Cash Credit (Hypothecation) Rs. 2. 00 lakhs against hypothecation of stocks of raw material, dyestee, PVC compound, PVC granuals etc. B) Term Loan of Rs. W. 50 lakhs for purchase of one plastic Injection Moulding machine; C) D. D. Clean - Rs. 1. 00 lakh for purchase of third -party cheques and Bank drafts arising out of trade transaction. " ( 3 ) IN consideration of the sanctioning/granting of the above said credit facilities the defendant No. 1 through defendant No. 2 executed various banking documents of hypothecation of goods to secure a demand , supplementary agreement dated 30. 3. 1991 in respect of cash credit and also executed hypothecation of assets (machine) to secure term loan of Rs. 2. 50 lakhs. A demand draft of Rs. 1. 00 lakh was also issued but there is no demand against that. The cash credit facility was payable on demand and the term loan was payable in 60 equal monthly instalments plus interest at the agreed rate commencing three months after the disbursement of the loan. The interest was payable at the rate of 15% towards cash credit facility and 14% towards the term loan facility. The defendant No. 1 undertook to repay the entire credit facilities, as per the terms of the agreement and offered personal guarantees of defendant No. 3 and defendant No. 4. In order to secure further loan amount defendant No. 1 also offered simple registered mortgage of property of defendant no. The defendant No. 1 undertook to repay the entire credit facilities, as per the terms of the agreement and offered personal guarantees of defendant No. 3 and defendant No. 4. In order to secure further loan amount defendant No. 1 also offered simple registered mortgage of property of defendant no. 2 and thereby deposited the duplicate copy of original title deeds with the plaintiff bank and also executed registered mortgage in the office of the Sub-Registrar. The details of the property for the purpose of Order 34 are as under: ( 4 ) IT was agreed that in case of default defendants would be further liable to pay additional interest of 2% with quarterly rests over and above the RBI rate fixed from time to time. Since the defendants have committed default they are now liable to pay interest on account of CC a/c 16% per annum and in term loan account 19. 25% per annum (inclusive. of 2% as additional interest ). ( 5 ) IT is further averred that since the inception of the sanction of the CC facility to the defendant No. 1, defendant No. 1 failed to maintain the proper stock of goods to the tune of loan sanctioned at the factory premises and also failed to give the stock statement and balance sheet as agreed in time. Defendant No. 1 also failed to regularise the account despite various persuasions and personal visits of the officials of the bank; to route the entire transaction through the said loan account; to deposit the instalments due in term loan account in time and to pay the quarterly interest in time and thus neglected the account totally as a result of which the account became irregular and sticky. Formal notices were sent to the defendants and finally plaintiff bank was compelled to recall the entire outstanding dues in cash credit and term loan accounts through registered \ega[ notice dated 15. 9. 1993. However, despite legal notice defendants did not make any payment nor did they send any reply; hence the suit. ( 6 ) IT is averred that as on 13. 12. 1995 a sum of Rs. 8,91,827. 00 was due and outstanding which includes recorded interest calculated at the agreed rate plus additional interest and also the outstanding in cash credit account No. 78/91 amounting to Rs. 2,87,093. ( 6 ) IT is averred that as on 13. 12. 1995 a sum of Rs. 8,91,827. 00 was due and outstanding which includes recorded interest calculated at the agreed rate plus additional interest and also the outstanding in cash credit account No. 78/91 amounting to Rs. 2,87,093. 00 and term loan facility account No. 11/91 amounting to Rs. 6,04,734. 00. It is pertinent to mention that no amount was due in demand draft clean facility. The above amount was calculated at the agreed rate so due and outstanding in cash credit/term loan/protested account of defendant no. 1. Defendants were further liable to pay interest at the agreed rate and additional interest from 14. 12. 1995 till its realisation. Since the transaction between the parties was of commercial transaction in connection with business of defendant No. 1 and there was a valid contract between the defendants and the plaintiff and as such plaintiff bank is entitled to the interest al the agreed rate. Similarly defendants 3 and 4 are jointly and severally liable to pay the amount due and outstanding in the account of defendant No. 1 as guarantors. The cause of action last arose on the date when the legal notice was issued and balance security confirmation letter was executed by the defendant No. 2. ( 7 ) SUMMONS of the suit were served upon the defendants. Written statement was filed by uk defendants but subsequently defendants were proceeded ex parte. However, the factum of availing facilities of cash credit as well as the term loan were admitted in the written statement. The defence taken was that blank documents were got executed by the bank officials and defendant No. 2 was asked to sign the blank papers and 12% per annum simple interest was agreed to be paid. Similarly the factum of having mortgaged the properties mentioned in para 8 of the plaint was also admitted. It is also admitted that a sum of Rs. 1 lakh was raised by mortgage of the property but the loan was at 12% per annum only on simple basis. Neither the cause of action was disputed nor the limitation was disputed. The defendants expressed their readiness and willingness to pay the outstandings at reasonable rate of interest in 60 equal monthly instalments, ( 8 ) IN support of its claim the plaintiff bank has examined its Manager, Mr. Neither the cause of action was disputed nor the limitation was disputed. The defendants expressed their readiness and willingness to pay the outstandings at reasonable rate of interest in 60 equal monthly instalments, ( 8 ) IN support of its claim the plaintiff bank has examined its Manager, Mr. Puneet Jain by way of affidavit. Mr. Jain has proved the following documents: "1. Copy of General Power of Attorney executed by Dr. Ram Das, Director. PNB, in favour of Sh. Surender Mohan - Ext. P-1: 2. Copy of Provisional Registration Certificate, Ext. P-2. 3. Hypothecation of goods to secure a demand cash credit dated 30. 3. 1991, Ext. P-3. 4. Supplementary agreement dated 30. 3. 1991, Ext. P-4. 5. Hypothecation of assets (machine) to secure term loan dated. 30. 3. 1991, Ext. P-5. 6. Term loan application dated 30. 3. 1991, Ext. P-6. 7. Letter of Insurance dated 30. 3. 1991, Ext. P-7. 8. Clean and documentary D/d dated 30:3. 1991, Ext. P-8. 9. Agreement of Guarantee executed by Shri Mela Singh, Ext. P-9. 10. Agreement of Guarantee executed by Shri Palwinder Singh, Ext. P-10. 11. Certified copy of sale deed, Ext. P-11. 12. Attested copy of the affidavit, Ext. P-12. 13. Copy of letter of intent to create a simple registered mortgageconfirmed by guarantor Shri Mela Singh, Ext. P-13. 14. Notice dated 14. 9. 1991, Ext. P-14. 15. Notice dated29. 1. 1992, Ext. P-15. 16. Notice dated 14. 1. 1993, Ext. P-16. 17; Notice dated 28. 5. 1993, Ext. P-17. 18. Registered legal notice dated 15. 9. 1993, Ext. P-18. 19. True and certified copy of statements of account bearing CC No. 78/91, Ext. P- 19. 20. True and certified copy of statements of account of Term Loan A/c No. 11/91, ext. P. 20 21. Balance security confirmation letter dated 13. 12. 1991 executed by defendant no. 2 for CC facility ext. P-21. 22. Balance security confirmation letter executed by defendant No. 2 for term loan facility, Ext. P-22. 23. Balance security confirmation for CC facility and term loan executed by defendant No. 3, Ext. P-23. 24. Balance security confirmation for CC facility and term loan executed by defendant No. 4, Ext: P-24. 25. Balance security confirmation executed again on 15. 9. 1994 by defendant No. 2 for cash credit facility, Ext. P-25. 26. Balance security confirmation executed again on 15. 9. P-23. 24. Balance security confirmation for CC facility and term loan executed by defendant No. 4, Ext: P-24. 25. Balance security confirmation executed again on 15. 9. 1994 by defendant No. 2 for cash credit facility, Ext. P-25. 26. Balance security confirmation executed again on 15. 9. 1994 by defendant No. 2 for term loan facility, Ext. P-26. 27. Balance security confirmation for CC facility and term loan executed by defendant No. 3, Ext. P-27. 28. Balance security confirmation for CC facility and term loan executed by defendant No. 4, Ext. P-28. " ( 9 ) HE has also verified the signatures of the officials of the bank appearing on. the aforesaid documents as he was conversant with their hand-writing and signatures. ( 10 ) IN view of the admission of the defendants in the written statement as to having availed the facilities of cash credit and term loan and in view of the unrebutted and uncontroverted testimony of the witness, Puneet Jain, and the documents which purport to bear the signatures of defendants 1 and 2 as principal borrowers as well as the defendants 3 and 4 as guarantors the claim of the plaintiff bank stands established and proved. ( 11 ) DECREE for a sum of Rs. 8,91,827. 00 (Rupees Eight lakhs ninety one thousand eight hundred and twenty seven only) in favour of the Plaintiff Bank and against the defendant nos. 1 to 4 Jointly and severally with pendentelite and future interest at the agreed rate of 16% in C. C. A/cand 19. 25% in Term Loan A/c per annum with quarterly rests with effect from the date of filing of the suit till its realisation with costs of the suit. If the defendant pays into court the decretal amount from today the plaintiff shall deliver upto the defendant all documents in his possession or power relating to the mortgaged property and shall if so required re-transfer the property to the defendant at his cost free from the mortgage and from all incumbrances created by the plaintiff or any person claiming under him or where the plaintiff claims by derived title, by those under whom he claims and shall also if necessary put the defendant in possession of the property. If the payment of the aforesaid amount is not made on or before six months the amount adjudged due in respect of subsequent costs, charges, expenses and interest, the plaintiff shall be entitled to apply for a final decree debarring the defendant from all right to redeem the property.