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Judgment
The Applicant is a body corporate constituted under Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970. Sh. Satyendra Javeria, Chief Manager, was authorized to file this O.A. on behalf of Applicant Bank. Defendants No. 1 is a private limited company approached the Applicant Bank for financial assistance. Considering the application of Defendants, Applicant Bank sanctioned a Cash Credit Limit of Rs. 50.00 Lac and a Term Loan of Rs. 50.00 Lac, Rate of interest was agreed between the parties. Defendant No. 1 hypothecated and created charge over the entire current assets, material, raw material, finished goods, semi finished goods of the company and book debts and receivables, plant & machinery in favour of the Applicant Bank and also created equitable mortgage of immovable property - Industrial Plot No. 4, at Khasra No. 206, Village Salasra, Tehsil Kolayat, District Bikaner (Raj.) admeasuring 1453.71 Sq. mtr. Bounded as North-Plot No. 3, South- Plot No. 1, East-Road and West-Road. Defendants No. 2 to 5 were stood as guarantors to repay the said loan by executing Guarantee Agreement in favour of Applicant Bank. In order to secure the said credit limits, Defendants executed security documents in favour of the Applicant Bank. Thereafter, Defendants failed to maintain financial discipline, therefore, the Applicant Bank filed this O.A. on 07.07.2015, against the Defendants for the recovery of a sum of Rs. 1,35,69,877/- (Rupees One Crore Thirty Five Lac Sixty Nine Thousand Eight Hundred Seventy Seven only) alongwith pendentlite and future interest @ 14% per annum with monthly rests and cost from the Defendants till the date of realization and in default from the sale of hypothecated, mortgaged as well as from the personal movable and immovable properties/assets of Defendants. The applicant bank is entitled to proceed against the same towards recovery of its debt.
Defendants no. 1 to 3 were declared exparte vide order dated 10.02.2016 passed by my Ld. Predecessor all steps were taken with regard to service of summons upon them.
Reply on behalf of defendant no. 4 and 5, is filed. As per reply, the guarantee given by them for credit facility availed by defendant no. 1 to 3, through Guarantee Deed dated 04.09.2012 was not of continuing in nature. It is also mentioned in the reply that the defendant no. 4 and 5, having ceased to be concerned with the business and affairs of defendant no. 1, company so no demand can be raised from them.
Heard arguments and perused the records.
The point that arises for consideration is:
Whether the applicant bank is entitled to the claim as prayed for?
As per OA, Defendants no. 4 & 5 were previous directors of the company and they furnished their personal guarantee, which was continuing in nature.
Perused Annexure A-3 to A-10 and A-11, Agreement of Guarantee executed by defendant no. 4 & 5 with applicant bank on 23.11.2011, it is clear that defendant no. 4 and 5 were directors of the defendant no. 1 company. Though an Agreement of Guarantee was executed by new directors i.e. defendant no. 2 and 3 on 4 September 2012 but there is no such evidence on record which can show that earlier guarantee was ceased or it was taken back so I am of the view that the reply is filed only on the ground to establish that the defendant no. 4 and 5 do not have any liability to repay the outstanding amount. In Agreement to Guarantee at Annexure A/11 nothing is mentioned about the ceasing of guarantee by defendant no. 4 & 5. Defendant no. 2 & 3 remained exparte and so it is clear that they have nothing to say. Accordingly I am of the view that all the defendants are jointly and severally liable to repay the outstanding amount, so the OA is allowed.
As stated supra, the applicant bank filed the evidence affidavit coupled with the recitals in the documents, viz Exhibit A/1 to A/31 marked on behalf of the applicant bank, clinches the claim of the applicant bank against the Defendants. Hence, I hold that the Defendants are jointly and severally liable to pay to the applicant bank the claim made in O.A. with future interest and costs.
In the result, this O.A. No. 230 of 2015 is allowed declaring that:-
a) The Defendants are jointly and severally liable to pay to the applicant bank a sum of Rs. 1,35,69,877/- (Rupees One Crore Thirty Five Lac Sixty Nine Thousand Eight Hundred Seventy Seven only) alongwith pendentlite and future interest @ 14% per annum (Simple) from the Defendants from 07.07.2015 till the date of realization.
b) The applicant bank is entitled to recover the above amount by sale of hypothecated entire current assets, material, raw material, finished goods, semi finished goods of the company and book debts and receivables, plant & machinery in favour of the Applicant Bank and by sale of mortgaged immovable property - Industrial Plot No. 4, at Khasra No. 206, Village Salasra, Tehsil Kolayat, District Bikaner (Raj.) admeasuring 1453.71 Sq. mtr. Bounded as North-Plot No. 3, South- Plot No. 1, East-Road and West-Road as well as from the personal movable and immovable properties/assets of Defendants. The applicant bank is entitled to proceed against the same towards recovery of its debt.
c) The applicant bank is entitled to the costs Rs. 1,39,580/- (1,38,000 + 1,250 + 330) of the O.A.
The recovery certificate be issued forthwith and be sent to the Recovery Officer, DRT, Jaipur.
Parties are directed to appear before the Recovery Officer, DRT, Jaipur on 18.06.2020.
Prepare Recovery Certificate accordingly.
A copy of the Judgment and Recovery Certificate be given or sent by registered post to each of the parties free. A copy of the Recovery Certificate be sent to the Recovery Officer of this Tribunal for necessary action as per the law.
Order pronounced in the open court today i.e. 18.03.2020.