CENTRAL BANK OF INDIA Vs. KAILASH CHANDRA GAUR

JUDGEMENT

(1.) Leave granted.

(2.) The sole respondent herein, who, at the relevant point of time, was a Director of one M/s Movers Private Limited (hereinafter referred to as "the Company"), had executed two personal guarantees against a financial accommodation made available by the appellant bank to the Company in question. This was on 7th June, 1983 and 8th August, 1983 respectively. On 6th July, 1984 the respondent resigned from the Board of Directors of the Company and informed the appellant - Bank with a request to discharge the present respondent from the guarantees executed by him. The Bank intimated the present respondent that the matter was being examined at the appropriate decision making level. Sometime in 1985, one Mr. V. Nandakumar came in as a Director of the Company in place of the present respondent and he also executed two personal guarantees which were accepted by the Bank. As there was default in payment of the loan amount the Bank instituted a suit for recovery in the year 1992 which got transferred to the learned Debts Recovery Tribunal at Bangalore (hereinafter referred to as "Tribunal") upon enforcement of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The learned Tribunal by order dated 21st November, 2003 decreed the application of the Bank but restricted the liability of the present respondent to the amount of the two guarantees in question.

(3.) Aggrieved the present respondent filed an appeal before the learned Debts Recovery Appellate Tribunal, Bangalore (hereinafter referred to as "Appellate Tribunal") which was allowed. One of the grounds that prevailed upon the learned Appellate Tribunal to allow the appeal of the present respondent was that the action of the Bank in accepting the personal guarantees of Mr. V. Nandakumar (the new Director) amounted to exoneration of the present respondent from the guarantees executed by him. The aforesaid order of the learned Appellate Tribunal is dated 21st July, 2005 and was challenged by the Bank before the High Court by filing Writ Petition No.9590 of 2006 out of which the present appeal has arisen. The said writ petition was dismissed by the High Court by the impugned judgment and order dated 3rd January, 2013 again, primarily, on the above said ground, namely, the induction of Mr. V. Nandakumar as a new Director and the personal guarantees executed by him exonerated the respondent herein. Aggrieved the present appeal has been filed.