Co. Suit-1/92 //1// In the High Court of Judicature for Rajasthan Jaipur Bench ** Civil Company Suit No.1/1992 Syndicate Bank, Branch Asif Ali Road N.Delhi Versus M/s Asup Synthetics & Chemicals Ltd (in liquidation) & Ors Date of Order ::: 12/08/2010 Hon'ble Mr. Justice Ajay Rastogi Mr. Rajendra Sharma, for plaintiff, Mr. GK Garg with Mr. Anuroop Singhi, for OL of defendant-1 (Co.) Suit for recovery has been filed by Syndicate Bank (plaintiff), which is a body corporate constituted under Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its head office at Manipal (Karnataka State) and a branch at Asaf Ali Road, New Delhi. M/s Asup Synthetics & Chemicals Ltd (in liquidation) (defendant-1) was a borrower of loans under various credit facilities availed through branch of plaintiff-Bank at New Delhi - dues whereof remained un-paid including interest thereon till 05/04/1990 and for recovery of dues of Rs.66,50,100.82p., Suit-169/1990 was instituted on 05/04/1990 before the High Court of Judicature at Delhi. Defendants-2 & 3 were impleaded being guarantors & Directors of defendant-1 (Co.) in individual capacity having joint & severe liability, while defendant-4 was impleaded as party liable for payment of the liability under D.A.T.B.D. credit facility being Co. Suit-1/92 //2// acceptor of Bills of Exchange having remained unpaid. Defendants-5 & 6 were impleaded being 1st charge holder over fixed assets of defendant-1 (Co.), over which plaintiff-Bank was having 2nd charge for realisation of dues whereas defendant-7 was the purchaser of fixed assets of defendant-1 (Co. in liquidation). However, after winding up order passed by Company Court, on Co. Appl.-39/91 filed U/s 446 of Indian Companies Act by plaintiff-Bank being allowed vide order dt.27/03/1992, instant Co. Suit was transferred to this Court and the injunction application filed U/O 39 Rr.1 & 2, CPC, was finally rejected vide order dt.27/01/1993; and consequently, defendants-5 & 6 were held to have acted properly being secured creditor & 1st charge holder. Indisputably, all the assets (fixed & movable) of defendant-1 (Co.) have been sold in and the Company is not presently holding any other fixed or current assets. At the out-set, Counsel for plaintiff Bank submits that no relief is being claimed against defendants-5, 6 & 7 since on account of fixed & current assets of defendant-1 (Co.) being sold, right of plaintiff-Bank stands extinguished against defendant-7. Despite service of notices, defendants 2, 3 & 4 have failed to appear and contest the instant suit. However, written statement was filed by defendant-1 (Co.) and after taking Co. Suit-1/92 //3// note thereof, in all 8 issues were framed by this Court vide order dt.20/05/94. However, the only issue having been pressed on account of change in circumstances pendente lis is Issue No.1 which survives to be examined by this Court, to that extent, submissions have been confined. Issue NO.1 reads ad infra:- "1. Whether the plaintiff is entitled to recover Rs.66,50,100.82p. as per para 32(a) of the plaint from defendants NO.1 to 4 jointly or severally ?. In order to prove its claim, plaintiff-Bank adduced in evidence affidavit-statements of two witnesses (K.Bhaskaran & R.S.Iyer). However, Counsel for defendants declined on 19/08/1994 to cross examine K.Bhaskaran but R.S.Iyer was cross examined. On behalf of defendant-5, affidavit-statement of Ashok Mathur was adduced in evidence while defendant-6 adduced in evidence affidavit statement of RS Gupta; and affidavit statement of KG Bajoria was filed by defendant-7 and all the witnesses of defendants (named above) were cross examined by plaintiff's counsel. Plaintiff-Bank through affidavit of K.Bhaskaran established that he was posted as Senior Branch Manager & Principal Officer of plaintiff-Bank's branch at Asaf Ali Road, New Delhi; as such was competent to institute the suit through power of attorney (Ex.P/1); and K.Bhaskaran has also adduced in evidence Co. Suit-1/92 //4// various documents (Ex.P/2 to P/4) filed for credit facilities executed by defendants-2 & 3 as authorized signatories of defendant-1 (Co.) pertaining to the Account of credit facility (D.L.C.B.C.-4/86 dt.14/04/1986). Statement of account pertaining to credit facility in question has been adduced in evidence as Ex.P/26 as affidavit statement of K.Bhaskaran to establish that a sum of Rs.15,97,186.65p. were outstanding dues inclusive of interest upto 05/04/1090 payable to plaintiff Bank pertaining to the said credit facility. For credit facility relating to A/c DL/CGC/TRL/5/ 87 documents executed by defendants-2 & 3 as authorised signatories of defendant-1 on 15/06/1987 were produced & exhibited as Ex.P/5 & Ex.P/6. Statement of A/c relating to credit facility in question has been placed in evidence and got exhibited as Ex.P/27 according to which a sum of Rs.9,75,760.65p. has been shown as outstanding inclusive of interest upto 05/04/1990 being payable to plaintiff Bank. For credit facility relating to the A/c ODGP-1/86 & 2/89, documents executed by defendants-2 & 3 as authorised signatories of defendant-1 on 18/0186 were got exhibited as Ex.P/8 to Ex.P/10 alongwith affidavit statement of Shri K.Bhaskarann. Similarly statement of A/c relating to credit facility has been got exhibited as Ex.P/28 according to which a sum of Rs.5,49,448/- was Co. Suit-1/92 //5// shown as outstanding inclusive of interest upto 05/04/1990 payable to plaintiff Bank. Further for credit facility relating to ODH A/c-43/86 & Comp. A/c No.ODH-71, documents executed by defendants-2 & 3 on 18/01/86 as authorised signatories of defendant-1 in support of affidavit statement of Shri K.Bhaskaran were got exhibited as Ex.P/11 to P/14. Statement of Ac relating to credit facility was got exhibited as Ex.P/25 according to which a sum of Rs.33,32,720.27p. has been shown as outstanding inclusive of interest payable to the plaintiff bank. As regards ban guarantee facility availed of by defendant-1, Shri K.Bhaskaran in his affidavit got exhibited counter guarantee dt.25/03/1987 (Ex.P/16) duly executed by defendants-2 & 3 as authorised signatories of defendant-1 and thereafter, bank guarantee of Rs.38,811.00 was issued on behalf of defendant-1 in favour of RSEB which was got exhibited as Ex.P/17 and on the said guarantee being devolved, Rs.38,811/- was paid by plaintiff bank to RSEB on 03/01/1989 - statement of account relating to said bank guarantee, amounting to Rs.48,825/- inclusive of interest upto 05/04/1990 was shown as outstanding payable by defendant-1 to plaintiff Bank. For D.A.T.B.D. credit facility availed of by defendant-1, Shri K.Bhaskarann in his affidavit got document exhibited as Ex.P/18 Co. Suit-1/92 //6// having been executed by defendants-2 & 3 as authorised signatories of defendant-1. Similarly, under credit facility availed by defendant-1, a Hundi dt.23/05/87 was got exhibited as Ex.P/19, which relates to a sum of Rs.82,000/- drawn in favour of defendant-4 on behalf of defendant-1 and discounted on 23/05/1987 by plaintiff Bank, which was duly accepted by defendant-4 on 18/06/1987 and this Hundi also remained unpaid by its drawer (defendant-1) and drawee (defendant-4) according to which Rs.1,26,716.75 inclusive of interest upto 05/04/1990 was shown as outstanding payable to plaintiff Bank by defendants-1 to 4 jointly & severally as was established from statement of A/c relating to the said A/c having been exhibited as Ex.P/29. Shri K.Bhaskaran in support of his affidavit got exhibited guarantee deeds (Ex.P/23 & P/24) duly executed on 18/01/1986 by defendants-2 & 3 in individual capacity of guarantors for repayment of ultimate balance of dues under various credit facilities granted by plaintiff Bank to defendant-1. Acknowledgment of debt executed by defendant-2 on 25/09/1988 as authorised signatory of defendant-1 was stated by Shri K.Bhaskaran in his affidavit. Thus, plaintiff Bank has adduced documentary evidence on record pertaining to various credit facilities, which were duly Co. Suit-1/92 //7// executed by authorised signatories (defendants -2 & 3); and credit facilities were duly availed of and from execution of the acknowledgment of Debt on 25/09/1988, the suit was instituted within three years. A total sum as shown in the plaint from statements of account duly certified under Bankers Book evidence (Ex.P/25 to P/32) is of Rs.66,50,100.82p towards outstanding dues against defendant-1 which the plaintiff Bank is entitled to recover from defendants-1 to 3 jointly & severally as well as by sale & appropriation of net sale proceeds of current assets, stocks etc. of defendant-1, over which the Bank has a second charge. Inventory of assets was already prepared with Official liquidator under orders of the Company Court. According to plaint & documentary evidence on record, plaintiff Bank is entitled to recovery a sum of Rs.1,26,716. 25p. from the defendant-4 inclusive of interest upto 05/04/1990 and being the acceptor of Bill of Exchange having remained unpaid. From the pleadings & documentary evidence adduced by plaintiff-Bank having remained un-controverted, since defendant-1 has failed to cross examine plaintiff's witnesses and defendants-2 to 4 have failed to participate in suit proceedings despite being served, and for the reasons best known in fact Co. Suit-1/92 //8// they have not contested the suit. Defendants-2 & 3 being guarantors in individual capacity and the Directors of defendant-1 are jointly & severally liable and defendant-4 is also liable for payment of the liability under D.A.T.B.D.-credit facility being acceptor of the Bills of Exchange. Taking note of material on record, plaintiff-Bank has been successful in establishing its claim as per plaint that the Bank is entitled to recover liability referred to in para 32(a) (supra) from defendants-1 to 4 jointly & severally and accordingly, Issue NO.1, which alone has been pressed, is decided in favour of plaintiff-Bank and against the defendants-1 to 4. However, this Court would like to observe that the amount which plaintiff Bank has realised as secured creditors & 2nd charge holder from the fixed & current assets of defendant-1 would be adjustable against total amount of the decree. This fact has not been controverted that defendant-1 is not holding any fixed or current assets at present and if the decree has to be executed at any point of time in future against defendant-1, it can be executed only with prior permission of this Court and the present decree will not come in the way to continue dissolution proceedings of defendant-1 (Company in liquidation). In the result, the suit succeeds and Co. Suit-1/92 //9// is decreed in terms of what has been observed (supra) holding that plaintiff-Bank is entitled to claim relief as prayed for in para 32(a) while deciding issue No.1 in its favour and against defendants-1 to 4. It is directed that defendants are jointly & severally liable and accordingly a decree in favour of plaintiff Bank for recovery of dues as claimed for in para 32(a) of the plaint after due adjustment of the amount recovered on disposal of the fixed or current assets of the defendant-1, alongwith interest @ 9% (Nine) per annum till realisation, besides court fee expenses & advocate fees be prepared. No order as to costs. (Ajay Rastogi), J. K.Khatri/p9/ 1CoSuit1992RsrAug12.doc