NashikSahakariSakharKharkhana Ltd. The lift irrigation scheme referred to above was prepared by the 2nd defendant and they had also agreed to stand a guarantee for the loan applied by the 1st defendant. To secure the above-mentioned credit facilities, the 1st defendant agreed to assign all its rights title in the lands belonging to its members. They also agreed to hypothecate the movable assets connected with the irrigation of the land. Two demand promissory notes were executed by the 1st defendant for sums of ₹ 50,000/-on 22/05/2090 and yet another promissory note for ₹ 10 lakhs was executed on 28/05/1990 by the chairman, vicechairman and secretary of the society for and on behalf of the society. Interest at the rate of 15% per annum with quarterly rests and in case of default, a penal interest of 2% per annum over the aforesaid credit facilities was also agreed to be paid. The term of the loan was for 11 years and the payment of yearly instalments commenced on 30/06/1992. The 2nd defendant represented through its managing director and director at the relevant time agreed to assist the Applicant bank in the recovery of the dues payable by the 1st defendant. A guarantee deed to that effect was also executed by the 2nd defendant. A deed of assignment was also executed by the 1st defendant in favour of the bank. On request made by the defendants, an additional loan of ₹2.12 lakhs was also sanctioned by the bank to meet the cost of the revised project. A tripartite agreement was executed between the bank and the defendants. The 1st defendant defaulted on payment and the Applicant bank was constrained to issue legal notice on 08/09/2000 calling upon them to pay the amount. Statutory
