COZY POLYSTONE (PRIVATE) LIMITED, BANGALORE AND OTHERS Vs. KARNATAKA STATE FINANCIAL CORPORATION, BANGALORE AND OTHERS

JUDGEMENT

(1.) This miscellaneous first appeal filed under Sec. 32(9) of the State Financial Corporations Act, 1951 (for short, 'the Act') is directed against the order dated 2-11-2012 passed in Misc. No. 802 of 1999 by the XXXVII City Civil and Sessions Judge, Bangalore City, whereby, a petition filed by Karnataka State Financial Corporation, for recovery of amount with interest and costs was allowed and the KSFC was held entitled to recover its dues with costs and interest at the rate of 16.5% per annum from the date of presentation of the petition till realisation from the appellants and the respondents 2 and 3 herein.

(2.) The KSFC filed the aforesaid petition by stating that M/s. Cozy Polystone (Private) Limited had approached it for sanction of term loans. The loans having been sanctioned, by executing the loan documents and after creating equitable mortgage by recording memorandum of entry and also on the execution of deeds of guarantee by the guarantors, the loans were availed. There being default in repaying the loan in terms of the loan agreements, action under Sec. 29 of the Act was taken. Rs. 75,27,089.00 was realised by way of issuing a sale notice under Sec. 30 of the Act. Even after adjustment of the sale proceeds the amount being insufficient for discharge of the loans, KSFC invoked the personal guarantee against the guarantors by issuing a cause notice. The guarantors having failed to discharge the dues, Misc. No. 802 of 1999 was filed.

(3.) The petition was opposed by filing separate statement of objections. Several grounds were raised as against the claim made by the KSFC. Inter alia, it was stated that KSFC having already adjusted its dues out of sale proceeds of the company M/s. Cozy Polythene (Private) Limited, the petition filed against the guarantors is not maintainable.