S SATHINARAYANAN Vs. BHAGWANDAS BATHIJA KANYALAL AND SONSSALEM

JUDGEMENT

(1.) The second defendant in O.S.No.503 of 1977, First Additional Sub-Court, Salem is the petitioner in this civil revision petition. That suit was instituted by the respondent herein for the recovery of a sum of Rs.15,525 with subsequent interest and costs against the South India Glass and Enamel Works Ltd. (hereinafter referred to as the company) by its Managing Director Sri.S.Sathyanarayanan and the petitioner herein (who figured as defendants 1 and 2) on the basis of three hundies Exs A-1 to A-3 dated 4-11-1976 for Rs.5,000 each executed by the company and the petitioner herein, In the written statement filed by the company the borrowing was admitted but it was stated that the petitioner had nothing to do with the borrowing and that he had signed the hundies in his capacity as the managing Director and not in his individual capacity. Further, invoking the provisions of Tamil Nadu Act 21 of 1969 (hereinafter referred to as the Act), the company prayed that further proceedings as against it should be stayed. In the course of the written statement filed by the petitioner, it was contended that the respondent was attempting to exploit a free hand signature of the petitioner on the hundies affixed at the instance of the respondent to fasten liability on him in his individual capacity. The petitioner also stated that as a result of the use of the rubber stamp on behalf of the company and the affixing of the signature by its Managing Director in that space the free hand signature of the petitioner was likely to be affected and therefore, it was that the petitioner again affixed his signature to the hundies. The petitioner thus disputed his individual liability on the basis of the hundies sured upon.

(2.) In tune with the stand taken by the Company in its written statement that it is entitled to invoke the benefit of the provisions of the Act in I.A. 1483 of 1977 in O.S. 503 of 1977, an application was filed purporting to be under S. 151 of the Civil P.C. and S. 4(b) of the Act, praying for stay of all further proceedings in the suit. In the affidavit filed in support of that application by the petitioner herein in his capacity as the Managing Director, the petitioner had stated that the Company (though wrongly described as firm) had fallen sick and that it had been taken over under G.O.Ms.No.1163 dated 13-10-1977, for the purpose of being nursed to a revival and that the Company is therefore a relief undertaking and hence suits against such a relief undertaking should be stayed. In paras 2 and 3 of the affidavit, reference has been made only to the Company and in para 4, the relief prayed for in that application has been confined only to the Company on the footing that it is a relief undertaking still it would be open to the court to proceed with the trial of the suit and direct the payment of the amount after the cessation of the notification to that effect and that in any event the suit against the petitioner can be proceeded with and a decree can also be passed subject to the direction that any decree passed subject to the direction that any decree passed against the petitioner shall not be enforced against the Company during the period of its being notified as a relief undertaking. On 20-03-1978 the learned Principal Subordinate Judge, Salem, passed an order in I.A.No.1483 of 1977 allowing it in part and staying the suit as against the petitioner C.R.P. 2401 of 1978 was filed by the petitioner against that order and on 27-9-1979 this court held that when the hundies by themselves do not disclose that the petitioner had executed them in his individual capacity, prima facie, it has to be taken that the Company, should also be made available to the petitioner. In this view, stated to have been arrived at on the basis of the representations a made on behalf of the petitioner before this court, leaving the question of the execution of the hundies by the petitioner in his individual capacity or otherwise open to be decided at the appropriate stage of the proceedings the civil revision petition was allowed. In so far as the Company is concerned it is not now in dispute that by a series of notifications issued periodically under the provisions of the Act proceedings as against such relief undertakings as the Company had been stayed between 14-10-1977 and 1410-1980. The suit which had meanwhile stood posted to several dates had been adjourned from time to time and stood posted to 4-11-1980 from which date it was announced to 18-11-1980. On that day, neither the Company nor the petitioner appeared before the court and no notification extending the stay beyond 14-10-1980 was also placed before the court. In that situation the Company and the petitioner were set ex parte and the clerk of the respondent was examined as P.W. 1 and accepting his evidence, the learned First Additional Sub-ordinate Judge, Salem, granted a decree in the suit as prayed for by the respondent with costs.

(3.) Thereafter on 19-3-1981, the Company as well as the petitioner filed I.A. 189 of 1981 and I.A. 190 of 1981 in O.S. 503 of 1977 to excuse a delay of 121 days in filing the application to set aside the ex parte decree and also to set aside the ex parte decree passed against the Company as well as the petitioner. On opposition by the respondent the learned Second Additional Subordinate Judge, Salem, by order dated 15-4-1981 dismissed the application in I.A. 189 of 1981, the petition filed by the Company and the petitioner in I.A. 190 of 1981 to set aside the ex parte decree against it and also its futile attempt to set aside the decree. However, the petitioner preferred C.R.P. 1869 of 1981 to this court against the order of dismissal in I.A. 189 of 1981 in O.S. 503 of 1977. On 7-7-1981, the order of the learned Second Additional Subordinate Judge, declining to condone the delay was upheld and the civil revision petition was dismissed.