KANTILA R SHAH Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) Rule. Learned Advocate Mr. J. T. Trivedi waives service of Rule for the respondent. With the consent of learned Advocates for the parties, this application is heard for final hearing today.

(2.) Application Ex. 136 in Special Suit No. 63 of 1982 filed by the defendant- present petitioner came to be rejected by the learned 2nd Joint Civil Judge (S.D.) by his order dated 11-1-94. Defendant by that application prayed for the stay of the further proceedings of the suit and in the alternative for return of plaint to the plaintiff-respondent for presentation to the proper authority.

(3.) Plaintiff had advanced loan to one M/s Kanti Cotton Mills of whom the defendant had stood surety. This plaintiff is a creditor, defendant is a surety and said M/s. Kanti Cotton Mills is a principal debtor. They are so referred hereinafter in this judgment. Creditor bias filed Special Civil Suit No. 42/86 against principal debtor and the said suit came to be returned to creditor for presentation to competent authority under the Gujarat Closed Textile Undertakings (Nationalisation) Act, 1986 ('the Act' for short). Creditor had filed Special Civil Suit No. 63/82 against surety to recovery the guarantee amount, which he had stood for principal debtor. In the said suit, surety gave an application Ex. 136 contending, inter alia, that the suit be stayed till the disposal of proceedings pending before the competent authority against the principal debtor. Until the liability of the principal debtor and the extent thereof cannot be determined by the competent authority, liability of the surety cannot be fixed and in the alternative, this suit also be returned to the competent authority.