The appellant M s. Housing Development and Finance Corporation in short HDFC instituted a suit under Order XXXVII of the Code of Civil Procedure, 1908, for realisation of its dues against defendant No.1 the borrower number before this Court and the two respondents defendant Nos.2 3 who were the guarantors to the loan.
The defendants did number pay the instalments despite letters and reminders.
On the execution of the necessary documents the loan was disbursed to defendant No.1 in two instalments.
The other two defendants, respondents before this Court, stood guarantee for repayment of the loan and executed the letters of guarantee on December 9, 1997.
The loan amount, along with interest at the rate of 15 per annum was to be repaid in equalised monthly instalments over a period of 180 months and in case of default, according to the terms of the loan, the outstanding would attract additional interest 18 per annum.
Despite the aforesaid letter and legal numberices sent on behalf of the appellant, the defendants did number pay the outstanding amount of Rs.4,37,350/ , and the plaintiff was thus left with numberoption but to institute the suit for realisation of its dues.
Hence, the plaintiff invoked the guarantees vide letter dated October 22, 1998, and intimated the two respondents that in case of failure to make the payment, legal proceedings would be instituted against them.
Defendant No.1 did number appear in the suit despite numberice.
The defendants applications were based on a number of grounds but we may only advert to the one that seems to have weighed with the High Court.
The defendants defaulted in payment of the EMIs and as a result, a large sum was outstanding against them.
Neither of these remedies which were open to the plaintiff were taken recourse to and the recovery was sought to be made straightaway from the appellants.
In addition, defendant No.1 also created an equitable mortgage in favour of the plaintiff by depositing the title deeds of the plot in question.
The trial companyrt by its judgment and order examined all the pleas, including the one based on Section 139 of the Contract Act and found and held that numbere of the pleas raised by the defendants gave rise to any substantial defence against the claim of the plaintiff.
The loan was sanctioned on October 29, 1997, and on December 9, 1997, defendant No.1 executed the Loan Agreement and a promissory numbere in favour of the appellant.
Aftab Alam, J. This appeal is directed against the judgment and order dated August 9, 2005, of the Delhi High Court by which it allowed the appeals of the two respondents defendant Nos.2 and 3 respectively before the trial companyrt , set aside the judgment and decree passed by the trial companyrt and permitted the appellants to file their written statements within four weeks from the date of the judgment, directing further that the trial companyrt would then proceed with the suit and dispose it of in accordance with law.
According to the case of the appellant plaintiff, defendant No.1 who was the owner of a plot of land approached the appellant plaintiff for a loan for companystructing a house on the plot.
