JINDAL MENTHOL INDIA LTD Vs. J C KHANDELWAL

JUDGEMENT

(1.) THIS is a suit filed under Order XXXVII of the Code of Civil Procedure for recovery of Rs.42,15,138.22. It is alleged in the plaint that the plaintiff company had advanced an inter-corporate deposit of Rs.50 lakhs, for 90 days, to a Company PAN Asia Industries Limited vide two agreements, both dated 16.1.1996. The deposit carried interest rate of 28% per annum. The amount of interest for 90 days, the period of inter-corporate deposit, was deducted at the time of disbursal. Defendants No.1 to 3 stood guarantors for repayment of the deposit. Since there was default in repayment of the deposit, the plaintiff served a notice dated 15.9.1997 to the borrower as well as the guarantors seeking repayment of the deposit. The deposit was, however, not repaid either by the borrower or by the guarantors. The plaintiff made a payment of Rs.14 lakhs in various instalments between 10.6.1996 to 23.8.1997. The plaintiff company also sold shares of Europlast India Limited totalling 1,53,100 for a total amount of Rs.10,47,415/-. The principal amount which remained payable to the plaintiff comes to Rs.25,52,585/-. The interest claimed by the plaintiff at the rate of 28% per annum is 16,12,796.22. The plaintiff has also claimed Rs.49,757/- towards expenses and other charges.

(2.) AN application for leave to contest being IA 1807/1998 was filed by defendants seeking unconditional leave to defend the suit. This was accompanied by IA 1808/1998 for condonation of delay in seeking leave to contest. Before any order could be passed on the merits of these applications, the defendants filed IA 2258/1999 seeking the stay of proceedings on the ground that the principal borrower PAN Asia Industries Limited had been registered under Sick Industrial Companies Act, 1985, and the proceedings had been stayed vide order dated 13.5.1999. The proceedings were revived by the Court vide order dated 22.5.2002. The plaintiff brought it to the notice of the Court that BIFR, vide its order dated 15.1.1999, had granted permission to the creditors who had filed the suit for recovery of money, though it had directed that in case of decree being passed against M/s. Pan Asia Industries Limited, the decree holders were required to obtain the consent of the Board for its execution. Since there was no appearance on behalf of defendants No.1 to 3, IAs 1807/1998 & 1808/1998 filed by defendants were dismissed in default on 14.1.2011.

(3.) IT would thus be seen that in this case, the liability of guarantor is at par with that of the principal borrower and therefore it arose when a notice was served on him requiring him to pay the dues of the creditor.