SCA/5195/2000 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 5195 of 2000 With SPECIAL CIVIL APPLICATION No. 5196 of 2000 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= CHAMPAKLAL JIVRAJ JAIN - Petitioner(s) Versus SARVODAY CO - OPERATIVE BANK LTD., & 2 - Respondent(s) ========================================================= Appearance : MR TUSHAR MEHTA for Petitioner(s) : 1, MR BHARAT JANI for Respondent(s) : 1, RULE UNSERVED for Respondent(s) : 2 - 3. ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 22/04/2008 ORAL JUDGMENT SCA/5195/2000 2/5 JUDGMENT 1. The short facts of the case appears to be that respondent No.2 firm had obtained the loan for Rs.3 Lakhs from respondent No.1 Bank and the petitioner stood as the guarantor. As per the petitioner, the officers of the Bank acted in collusion with the respondent No.2 and permitted withdrawal of amount exceeding Rs. 3 Lakhs. Since the loan was not paid by respondent No.2, Suit was filed by the respondent No.1 Bank being No.542/86 before the Registrar, Board of Nominees for recovery of the amount of Rs.3,17,667.14 ps. with interest. The learned Nominee ultimately passed the Judgment and Award on February 1995, whereby the Suit was decreed with the interest @ 16.5% and cost of Rs.1,000/-. However, it was also observed that if the defendant No.1 firm fails to pay the amount of the award, the plaintiff will be entitled to recover the amount from defendant Nos. 1 & 3, i.e. firm of Pukhraj Shah, defendant No.3, jointly and severally. The defendant No.3, viz. Pukhraj Shah as well as the Bank carried the matter in appeal before the Tribunal being Appeal No.101/95 and 105/95 respectively. The Tribunal dismissed the appeal. However, so far as the petitioner is concerned, viz. Champaklal Jain, the appeal of the Bank was allowed and it was held that the Bank shall be entitled to recover the amount jointly and severally with the firm. It is under these circumstances, the petitioner has approached to this Court by SCA/5195/2000 3/5 JUDGMENT preferring the present petitions. 2. It may be recorded that Special Civil Application No. 5195/00 is preferred by Shri Champaklal Jivraj Jain, who was originally the guarantor and same is the situation in Special Civil Application No. 5196/00, but the petitioner therein is another guarantor, viz. Pukhraj Shah. 3. Heard Mr.K.D.Shah for Mr.Tushar Mehta and Mr.Jani for respondent No.1 Bank. 4. The principal grievance raised on behalf of the petitioners is that agreement for loan amount was of Rs.3,00,000/- and therefore, if the Bank has granted loan exceeding Rs.3,00,000/- to the principal borrower, viz. the Firm, the liability of the guarantor would not be extended. Therefore, it was submitted that the learned Nominee has committed error. In support of the contention, the learned counsel has relied upon the statement of accounts produced by the Bank in the proceedings of the Suit before the learned Nominee. It was submitted that the amount of total debit shown are exceeding Rs.3,00,000/- in aggregate. Therefore, the liability of the guarantor would not be extended if the breach is committed by the Bank in collusion with the principal borrower. 5. The examination of the said contention shows SCA/5195/2000 4/5 JUDGMENT that except in October 1985, at no point of time total debit entry has exceeded Rs.3,00,000/-. All the entries after 21.10.1985 including the interest has not exceeded Rs.3,00,000/-. The last debit shown just prior to the suit is the outstanding amount of Rs.2,95,261.24 Ps. and the interest debited is of Rs.13,811.15 ps. and another interest in the next quarter is of Rs.8,594.75 ps. and therefore, Rs.3,17,661.14 ps. 6. Under these circumstances, even if the contention of the petitioners is considered, out of the Suit amount of Rs.3,17,667.14ps., the principal amount claimed is of Rs.2,95,261.24 ps. and the remaining amount is the interest due. Therefore, it cannot said that the loan was disbursed by the Bank exceeding Rs.3,00,000/-. 7. It appears that in the Promissory Note, the Nominee has found that the Promissory is also signed by the guarantor. Under these circumstances, if the principal amount of loan has not exceeded Rs.3,00,000/-, and the liability to pay the interest is guaranteed, the contention of the petitioner even if considered, cannot be accepted to the effect that they would not be liable to pay the amount exceeding Rs.3,00,000/-. Under these circumstances and in view of the perusal of the judgement and award SCA/5195/2000 5/5 JUDGMENT passed by the Tribunal it appears that the Tribunal has re-appreciated the record and has recorded the finding of facts. It cannot be said that any error apparent on the face of record has been committed by the Tribunal. 8. In view of the above, both the petitions fail. Rule discharged. I.R. vacated. (JAYANT PATEL, J.) *bjoy