IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA RSA No.61 of 1997. Date of decision: 24.03.2009. M/s.Sneh Industries Ltd.& Anr. …Appellants Versus Deepak Chaudhary & Ors. …Respondents Coram The Hon’ble Mr.Justice Dev Darshan Sud,J. Whether approved for reporting ?1 No. For the Appellant: Mr.Bhupender Gupta, Senior Advocate with Mr.Neeraj Gupta, Advocate. For the Respondents: Mr.Ajay Mohan Goel, Advocate. Dev Darshan Sud,J. This is the defendants appeal against the concurrent findings of the two Courts below, decreeing the suit of the plaintiffs-respondents. The plaintiffs-respondents filed a suit for recovery of Rs.41,500/- on the allegations that the defendant No.1 which was the Company registered under the Companies Act, 1956, entered into an agreement through its Directors, whereby a sum of Rs.30,000/- was advanced to it. Only the appellants herein contested the suit before the trial Court which, on the evidence led by the parties, decreed the suit holding that a sum 1 Whether the reporters of Local Papers may be allowed to see the judgement? Yes. 2 of Rs.30,000/- had been advanced as loan to the erstwhile Company. The suit was accordingly decreed. An appeal preferred before the learned District Judge was dismissed. The contesting defendants are now in appeal. This appeal was admitted on two questions of law:- “2. Whether it was necessary for the Plaintiff-Respondents to have proved the privity of contract between the Plaintiff-Respondents and the Defendants-Appellants in order to fasten the liability of suit amount, is not decree without jurisdiction in the absence of such material available on the record? 3. Whether the Judgment and Decree passed by both the learned Courts below are vitiated on account of misreading and consideration of Exhibit D-1 to D-4 particularly the list of sundry debtors on the day when the assets and liabilities of Plaintiff-Respondents were taken over by the Defendants-Appellants? Questions No.2 and 3: Both these questions are taken up for consideration. Learned counsel appearing for the appellants urges that the learned Courts below have mis- construed three documents, namely, Exts.D-1, D-2 and D-3 which are Memorandum of Understanding, balance sheet of the A.B.L. Capacitors (India) Limited, dated 26.8.1989 3 and list of Directors. He submits that according to Ex.D-1, which is the Memorandum of Understanding arrived at between the appellants and the proforma respondents interse, the appellants have no liability for re-payment of any loan amount which liability is that of the other proforma respondents as the appellants never accepted any loan liability incurred by the other proforma respondents. He emphasized that even the balance sheet, referred to above, does not in any manner accept the responsibility/liability of the debt payable to the respondents-plaintiffs. Ex.PW-1/B is the agreement executed between the plaintiffs-respondents No.1, 2 and 3 through the Directors of the Company, namely, K.G. Lakshamanan, P.S. Arora, B.N. Goswami and Vinod Ahuja, wherein a loan of Rs.30,000/- has been advanced. Ex.PW-1/E is the receipt acknowledging this advance. In his evidence, DW-1, (appellant No.2 herein), admits that Sneh Industries was known as A.B.L. Capacitors Ltd. Learned counsel appearing for the appellants urges that there is no privity of contract between the appellants and the plaintiffs and as such no liability could be fastened on them. I do not find from reading of Exts.D-1, D-2 and D-3 that such a conclusion can be arrived at. Moreover, it is settled law that in order to be exonerated from any liability, it is not sufficient that two debtors enter into an agreement interse. What is 4 required is the acceptance of such agreement by the creditor also. In this case, I do not find any such agreement on the record nor any pleadings to this effect. In these circumstances, these questions are answered against the appellants. This appeal is accordingly dismissed. There shall be no order as to costs. March 24, 2009 (Dev Darshan Sud) (aks) Judge.