GULAB CHAND KESARI Vs. STATE OF U P

JUDGEMENT

(1.) THE petitioners contended before this Court that they were guarantors in taking Bank loan by the respondent No. 4. THErefore in view of the ratio of the judgment reported in 2006(3) JCLR 311 (SC) : 2006 (10) ADJ 52 (SC), Ashok Mahajan v. State of U.P. and Ors., the borrower have to be dealt with first before taking any action against the guarantor.

(2.) WE find from the aforesaid judgment that the alleged unpaid term loan amount is arising out of the Pradeshiya Industrial and Investment Corporation, Uttar Pradesh Limited (PICUP). The proceeding was initiated ultimately against the guarantor under Section 9 of the State Financial Act, 1951. The Supreme Court observed that Sections 3 and 4 of the Uttar Pradesh Public Moneys (Recovery of Dues) Act, 1972, as referred therein, clearly speak that the authority cannot proceed against the guarantor until the property of the principal debtor is firstly sold of for the purpose of recovery of the dues. However, upon making such observation the matter was remitted back to the High Court for the purpose of reconsideration.

(3.) WE direct that the respondents, their agents, servants, employees, officers etc. shall not proceed to recover the loan amount in question or proceed with attachment/auction sale etc. (subject-matter of this writ petition) provided the petitioners make deposits as follows: (1) Petitioners shall make an initial deposit of Rs. 1,00,000/- (Rupees one lakh only) within one month from today. (2) Petitioners shall pay balance amount in 4 equal quarterly instalments on or before 30th of the relevant month; instalment period for computing 1st instalment shall commence from the day following the day when one month period referred in clause 1 shall end. (3) Petitioners shall approach the respondent-bank in writing, while paying 3rd instalment and on so being approached, the Bank shall furnish, within three weeks of receipt of request, detailed account statement giving full particulars indicating all past deposits and dues up to date, alongwith such documents as may be claimed by the petitioner. Petitioners may file objection within three weeks of receipt of account statement, bank shall communicate decision in three weeks of receipt of objection, if any, and the balance amount, if any, shall be deposited as 4th instalment as per direction of the Bank. (4) Any amount already deposited under above loan account shall be duly adjusted and taken care of. (5) In case, petitioners make payments as per schedule prescribed above and complies with all the conditions contained therein, no amount as collection charges shall be recovered. (6) But in case petitioners commits default of any of the above conditions, this order shall stand vacated automatically on the date of default itself without further reference to the Court and the petitioner will become liable to pay collection charges also.