IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMARY SUIT NO. 698 OF 1997 Gujarat State Financial Services Ltd. ..Plaintiffs Vs. Megabyte Advertising Services Pvt Ltd. & Ors. ..Defendants Ms. R.V. Thakkar i/b Dave & Girish & Co. for the Plaintiffs None for the Defendants CORAM: DR. D.Y. CHANDRACHUD, J. DATE: 11th AUGUST, 2009 P.C. : 1. The suit has been instituted for the recovery of an amount of Rs.2 crores together with future interest. The claim in the suit arises on account of (a) A Corporate Guarantee dated 07.06.1994 provided by the 1st Defendant, pursuant to a Board Resolution dated 27.05.1994, authorising Defendant No.3 to sign on behalf of the 1st Defendant; (b) A joint and several personal guarantee dated 7th June, 1994, provided by Defendant Nos.2 & 3; (c) A personal guarantee dated 7th June 1994 provided by Defendant No. 2 in favour of the Plaintiff. The Defendants have executed the aforesaid guarantees in favour of the Plaintiffs, in consideration of the Plaintiffs giving on lease certain equipment to the principal debtor. The Plaintiffs claim that the Defendants are jointly and severally liable to pay the amount due and payable by the principal debtor. 2. The Plaintiffs, in pursuance of a request made by Defendant Nos.2 & 3 in or about May 1994 on behalf of the principal debtor entered into a contract for the purchase of equipment valued at Rs.2 crores, which was leased out to the principal debtor. The Plaintiffs purchased the equipment and made payments to the supplier, against which the supplier had raised four invoices dated 01.06.1994. The equipment was delivered to the principal debtor against which four delivery challans were issued. The guarantees executed by the Defendants arose on account of an agreement dated 07.06.1994, entered into between the Plaintiffs and the principal debtor. The principal debtor was a company by the name of Megabyte Consultancy Services Pvt Ltd. Under the Agreement the Plaintiffs leased our equipment of a value of Rs.2 crores to the principal debtor for a period of three years. In pursuance of the agreement, the principal debtor was liable to pay to the Plaintiffs quarterly lease rentals which were fixed at Rs.22,74,000/-, commencing from 07.06.1994. The principal debtor failed and neglected to pay the lease rentals which fall into arrears from 07.12.1994. The lease rentals until 06.09.1994 aggregated to Rs.1.81 crores while the delay charges amounted to Rs.40.17 lacs. As a result of the default, the principal debtor became liable to pay the lease rentals for the unexpired period under clause 8 of the agreement. The lease rentals for the unexpired period amounted to Rs.45.48 lacs. An aggregate sum of Rs.2,67,57,681/- is due and payable by the principal debtor to the Plaintiffs. Cheques towards the lease rentals issued by the principal debtor were dishonoured. The case of the Plaintiffs is that the principal debtor by a letter dated 17.05.1996 acknowledged its liability. On 27.05.1996, a letter was written on behalf of principal debtor requesting the Plaintiffs not to deposit their post-dated cheques on the ground that, the principal debtor was in the process of tying up certain arrangements. 3. After the suit was instituted as a Summary Suit under Order XXXVII of the CPC, a Summons for Judgment was taken out. Unconditional leave to defend the suit was granted on 22.09.1988. Defendant Nos. 1, 2 & 3 were directed to file their Written Statement within 10 weeks. No Written Statement has been filed. The principal debtor by letters dated 18.02.2000 and 12.07.2002 acknowledged liability to the Plaintiffs. A cheque dated 18.08.2000 drawn by Defendant No.2 for Rs.50,000/- came to be honoured on presentation; cheque being in part payment of the outstanding. Defendant No.2 also addressed a letter dated 23.12.2002 to the Plaintiffs acknowledging her liability as guarantor. 4. An order of winding up has been passed against the principal debtor on 11.02.1999. The claim against the principal debtor as on 16.07.2009 is stated to be in an amount of Rs.9,79,33,443/-. The claim in the suit against the Defendants has been restricted to an amount of Rs.2 crores, that being the extent of the guarantees executed by the Defendants. 5. The Plaintiffs have filed an Affidavit of evidence of Mr. Jayesh Naik and a compilation of the original documents. The facts which have been stated in the earlier part of this judgment, have been deposed to by the Witness. The witness of the Plaintiffs is personally present before the court and deposes to the correctness of what is stated in his Affidavit of evidence. The compilation of the original documents contains interalia the Guarantees executed by the Defendants and the acknowledgment of liability. The compilation is tendered and taken on record. The claim of the Plaintiffs has been duly proved on the basis of the evidence on the record. The Plaintiffs have proved the execution of the guarantees by the Defendants for consideration and the liability of the Defendants thereunder to the extent of Rs. 2 crores. The suit shall accordingly stand decreed in terms of prayer clause (a). The Plaintiffs would be entitled to interest @ 9% p.a. on the principal sum of Rs.2 crores, from the date of the suit until payment or realisation. The original documents are permitted to be returned to the Advocates for the Plaintiffs against photocopies, been duly subject to due verification by the Registry. There shall be a refund of Court fees, if any, as per rules. (Dr. D.Y.Chandrachud, J.)