J G GLASS LIMITED Vs. INDIAN BANK

JUDGEMENT

(1.) THIS first appeal arises out of a judgment and order dated 28th February, 1989, passed by the learned Civil Judge, Senior Division, Pune, where by the suit was decreed against the defendants in the sum of Rs. 10,70,760. 25 ps. alongwith interest.

(2.) BRIEFLY, the facts are that M/s. J. G. Moulds Ltd. the respondent No. 2 herein had applied for cash credit facility, key cash credit term loan and bill discounting facilities for its business and obtained the same from Indian Bank, the original plaintiff. In that behalf the said respondent No. 2 had hypothecated various movables in favour of the plaintiff Bank. Original defendant No. 2 M/s. J. G. Glass Industries Ltd. was the principal company whereas M/s. J. G. Moulds Ltd. was its subsidiary. The said M/s. J. G. Glass Industries Ltd. being the original defendant No. 2 had fully guaranteed repayment of all dues of M/s. J. G. Moulds Ltd. to Indian Bank. It appears that the said M/s. J. G. Glass Industries Ltd. had even acknowledged its liability to pay the Bank, in its annual balance-sheets upto 1981.

(3.) DURING the pendency of the suit, the said J. G. Glass Industries Ltd. , being defendant No. 2 was amalgamated with defendant No. 3 M/s. J. G. Glass Ltd. the appellant herein. The said amalgamation was granted on 7th July, 1983, with effect from 1st April, 1982. Thereby the respondent No. 2 herein became the subsidiary of appellant and the appellant was fully liable to pay the Banks dues on such amalgamation. The respondent No. 2 had originally obtained the facilities in 1971, the same was renewed in 1974 and further fresh documents were executed renewing the liability on 4th September, 1978.