(1.) THIS appeal is filed questioning the order dated 16.1.2007 passed by VI Addl. City Civil Court in Misc.No.435/1999 holding that the appellant is also liable to pay the sum as ordered, jointly or severally.
(2.) THE records reveal that respondent No.1 herein sanctioned a loan of Rs.70.00 lakhs in favour of respondent No.2 herein. THE loan agreement dated 6.3.1996 was executed by respondent No.2 and respondent No.1. Third and fourth respondents herein executed surety agreement dated 6.3.1006 giving collateral security of schedule I and II properties. THE appellant executed a "letter of comfort" dated 2.3.1996 as per Ex-P14. Respondent No.2 committed default and did not repay the amount as agreed. Hence, respondent No.1 invoked surety agreement dated 6.3.1996 given by respondent Nos.3 and 4 by issuing notice dated 16.9.1998. Respondent Nos.3 and 4 did not pay the amount despite the notice. Thus a petition came to be filed by respondent No.1 herein under Sections 31(1) (aa) and 32(1) of State Financial Corporation Act(SFC Act), 1951, for a direction to respondent Nos.3 and 4 to pay the amount of Rs.1,03,90,000/- and for sale of secured properties described in schedule I and II of the petition. A direction is also sought that the appellant alongwith respondent Nos.2 and 4 herein shall pay the said amount with interest jointly and severally. After hearing, the impugned order is passed by the Court below holding that respondent No.2 company is due to pay a sum of Rs.1,03,90,000/- as on 30.6.1998. It is further held that appellant and respondent Nos.2 to 4 herein are jointly and severally liable to pay the said amount. Further directions are also issued.
(3.) ALL through, respondent No.1 as well as other parties including the appellant has understood the document Ex.P14 as a "letter of comfort", plain and simple. In the cross-examination of PW-1 (witness for respondent No.1), he has clearly admitted that the appellant has not undertaken under Ex-P14 that he would repay the amount in case the respondent Nos.2 to 4 herein commit default in payment of the loan. In the light of clear admission of PW-1 and having regard to the language employed in Ex-P14, it is clear that the appellant has not undertaken that it would repay the loan amount in case of default by respondent Nos.2 & 4 herein. In this context, we may usefully refer to the definition of "letter of comfort", as found in P. Ramanatha Aiyar?s Advanced Law Lexicon, which reads thus:-