SICOM LIMITED Vs. BALKRISHNA HIMMATRAMKA

JUDGEMENT

(1.) The present petition is filed under the provisions of section 3 l (l) (aa) of the STATE FINANCIAL corporations ACT, 1951. The petitioner is a financial institution. Some time in or about February, 1993 the company known as Sanjivani Agro Industries approached the petitioner with a request to grant a loan of more than Rs. 110. 00 lacs for setting up a plant for solvent extraction and oil refinery at Plot No. A/1 in the Palus Industrial Area of midc within the village limits of Palus, Taluka Tasgaon, District Sangli.

(2.) The said application for grant of term -loan was sanctioned by the company and the said loan amount was advanced by the petitioner to the said company. The company executed an indenture of mortgage dated 16-8-1993 securing the said loan amount and mortgaged the plant, machinery and building of the company with the said financial institution. The respondent herein being respondent Nos. 1 to 4 have executed the deed of guarantee dated 16-8-1993 and the respondent Nos. 2 and 5 has executed the deed of guarantee dated 20-9-1993 in favour of the petitioner herein guaranting the repayment of the aforesaid amount by the respondent company which is a principal debtor.

(3.) The said guarantee is unequivocal and inter alia recites that on the default being committed by the company to make payment of any instalment amount the guarantors would be liable to repay the said amount to the petitioner herein. Pursuant to the aforesaid arrangement the loan amount was disbursed to the company and the company has utilised the same. The company made defaults in repayments of the aforesaid amount from time to time and thus committed breach of the terms and conditions of the said loan agreement. In the circumstances a legal notice was issued on 9-1 -1998 by the petitioner recalling the said loan amount from the company.