SICOM LIMITED Vs. PRAKASH PAI SHRI

JUDGEMENT

(1.) THE plaintiffs, a public limited company incorporated under the provisions of the Companies Act, 1956, is carrying on the business of giving finance to the needy borrowers. The above suit has arisen from the transaction between the plaintiffs and one M/s. Firth (India) Steel Company Limited of advancing a short term loan of Rs. 50,00,000/- on the terms and conditions contained in the plaintiffs sanction letter dated 9-1-1996 following their agreement dated 6-2-1996. The said company is not impleaded as a defendant in the above suit. The plaintiffs have also not annexed a true copy of the aforesaid agreement dated 6-2-1996 between the plaintiffs and the said company on the basis of which the plaintiffs had advanced the aforesaid amount of Rs. 50 lakhs as short loan to the said company. It further appears that the present defendant being the Managing Director of the said company gave his irrevocable personal guarantee securing the said loan given by the plaintiffs to the said company. It further appears that a separate Deed of Agreement was executed on 6-2-1996 by the defendant. It further appears that the defendant had also executed a Demand Promissory Note on the same day in favour of the plaintiffs. The present suit has arisen on account of defaults in payment of the amounts as agreed by the borrower company and by the defendant. The plaintiffs have prayed for a decree against the defendant guarantor as under :-

(2.) THE plaintiffs have prayed for a decree against the defendant guarantor, who entered his appearance after receipt of the writ of summons in the above suit. The plaintiffs have thereafter filed the above summons for judgment for a decree against the defendant on the basis that the suit claim is an ascertained and liquidated amount arising under the Deed of Guarantee executed by the defendant as a security for the loan advanced by the plaintiffs to the borrower company. According to the plaintiffs, the summons for judgment should be made absolute and judgment should be entered in their favour as the defendant has no defence of any nature. The plaintiffs have filed an affidavit in support of the summons for judgment verifying the facts stated in the plaint. The defendant has filed affidavit in reply to contest the suit claim on various grounds.

(3.) I have heard both the learned Counsel and I have also gone through the agreement entered into by the plaintiffs and the borrower company and also the Deed of Guarantee executed by the present defendant in favour of the plaintiffs. As far as the plaintiffs are concerned the borrower company has committed default by failing to make payment in terms of the contract, the defendant guarantor has become liable to make payment and he also having failed to discharge his obligations under the Deed of Guarantee, the plaintiffs are entitled to get a decree against the defendant. It was pointed out by the Counsel for the plaintiffs that the borrower company has been ordered to be wound up on 15-3-1999 in Company Petition No. 457 of 1997. The Official Liquidator has been appointed for the assets and liabilities of the company. According to the learned Counsel for the plaintiffs the suit was maintainable against the defendant guarantor without impleading the borrower company and that official liquidator need not be joined. The suit was filed on 17-9-1998 while Official Liquidator was appointed on 15-3-1999.