B.A.VARADARAJACHAR Vs. RELIANCE ASSET RECONSTRUCTION COMPANY

JUDGEMENT

(1.) This petition by the guarantor-cum-surety of the subject loan, seeks to lay a challenge to the order dtd. 18/4/2024, whereby the Debt Recovery Appellate Tribunal at Chennai has negatived his Miscellaneous Appeal No.40 of 2023. Petitioner has also sought for the quashment of Debt Recovery Tribunal's order dtd. 28/6/2023, whereby his Application No.724 of 2022, seeking stay of all further proceedings in respondent's Original Application No.73 of 2025, has been negatived.

(2.) Sri.Madhukar Deshpande, learned Counsel appearing for the petitioner argues that although his client was admittedly a guarantor having executed mortgage for securing the repayment of initial debt, his client's liability by virtue of suretyship, would stand discharged, absolutely because of, (a) Novatio inasmuch as new transaction has been brought about by executing a whole lot of new loan documents; and (b) there is fraud and fabrication of documents perpetrated by the principal borrower hand-in-glove with the officials of the respondent. He cites the decision of Apex Court in the case of S.P. CHANGALVARAYA NAIDU (DEAD) BY LRs v. JAGANNATH (DEAD) BY LRs,(1994)1 SCC 1. in support of his contention that all transactions stand voided by virtue of fraud and fabrication.

(3.) Having heard the learned Counsel for the parties and having perused the petition papers, we are inclined to grant a limited indulgence as under and for the following reasons: