Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

Latest Case Laws

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2009 (8) TMI 1186

tution of India was not justified to stay further proceedings in O.A. 156 of 1997? - CIVIL APPEAL NO. 4613 OF 2000 - Dated:- 18-8-2009 - DALVEER BHANDARI & H.L. DATTU JJ. J U D G M E N T Dalveer Bhandari, J. 1. This appeal is directed against the judgment of the High Court of Calcutta in Civil Revisional Jurisdiction dated 10.9.1999 in C.O. No. 1581 of 1999. 2. Briefly stated the facts are as follows: The appellant Industrial Investment Bank of India Ltd. (hereinafter referred to as the appellant ) on 27.9.1994 sanctioned the first short term working capital loan of ₹ 3 crores in favour of Modern Malleables Limited (hereinafter referred to as the borrower company ). .....

X X X X X X X

Full Text of the Document

X X X X X X X

e guarantors were the principal debtor to the IRBI. 6. The appellant sanctioned the second term working capital loan of ₹ 3 crores on 15.03.1995 in favour of the borrower company. The Demand Promissory Note for ₹ 3 crores was executed on 21.03.1995 on behalf of the borrower company by the respondent as the Director of the borrower company in favour of the appellant. A deed of undertaking to create mortgage in respect of its immovable properties was also executed on behalf of the borrower company in respect of the said second short term working capital loan. 7. The borrower company committed defaults in the payment/repayment of the principal amount of the loan as well as interest, liquidated damages and oth .....

X X X X X X X

Full Text of the Document

X X X X X X X

#8377; 5.40 crores together with further interest and liquidated damages from 1.1.1997 till repayment. 11. The High Court on the said application filed by the appellant on 31.03.1997 under section 40 of the IRBI Act appointed a Receiver for the purpose of taking symbolic possession of the assets mentioned in Schedules A , B , C and D to the said application and also for making an inventory of the same. The High Court issued an order of injunction restraining the borrower company from parting with the possession, disposing of or alienating or otherwise encumbering any of the said assets in any manner. 12. The appellant on 17.7.1997 filed an application against the respondent under section 19 of the Recovery of Debts Due .....

X X X X X X X

Full Text of the Document

X X X X X X X

nt under Article 227 of the Constitution of India and stayed further proceedings in O.A. No. 156 of 1997 filed by the appellant against the respondent in the Debts Recovery Tribunal, Calcutta. The appellant against the said judgment/order has filed this appeal. 17. Mr. J. L. Gupta, learned senior counsel appearing for the appellant submitted that the appellant bank is fully justified in initiating proceedings against the borrower company as well as its guarantor before the different courts. 18. Mr. Gupta also submitted that the liability of the guarantor and the principal debtor are co-extensive and not in alternative. He also submitted that sections 29, 31 and 32 of the State Financial Corporations Act are pari materi .....

X X X X X X X

Full Text of the Document

X X X X X X X

is not made dependent on first applying for execution of the mortgage decree. The choice is left entirely with the decreeholder. The question arises, whether a decree which is framed as a composite decree as a matter of law, must be executed against the mortgage property first or can a money decree, which covers whole or part of the decretal amount covering mortgage decree can be executed earlier. There is nothing in law which provides such a composite decree to be first executed only against the principal debtor. The court further observed that the liability of the surety is co-extensive with the principal debtor, unless it is otherwise provided by the contract . 21. The term co-extensive has been defined in the celeb .....

X X X X X X X

Full Text of the Document

X X X X X X X

nch of the High Court of Karnataka, in The Hukumchand Insurance Co. Ltd. v. The Bank of Baroda & Others AIR 1977 Kant 204 had an occasion to consider the question of liability of the surety vis-a-vis the principal debtor. The court held as under:- The question as to the liability of the surety, its extent and the manner of its enforcement have to be decided on first principles as to the nature and incidents of suretyship. The liability of a principal debtor and the liability of a surety which is coextensive with that of the former are really separate liabilities, although arising out of the same transaction. Notwithstanding the fact that they may stem from the same transaction, the two liabilities are distinct. Th .....

X X X X X X X

Full Text of the Document

X X X X X X X

advance or breach of an agreement, the Corporation has two remedies available to it against the defaulting industrial concern, one under section 29 and another under section 31. Since, the corporation must be held entitled and given full protection by the court to recover its dues it cannot be bound down to adopt only one of the two remedies provided under the Act. The Court further held that the doctrine of election is not applicable to this case. 30. The legal position as crystallized by a series of cases of this court is clear that the liability of the guarantor and principle debtors are co-extensive and not in alternative. When we examine the impugned judgment in the light of the consistent position of law, then .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||