WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION LIMITED Vs. NICCON ELECTRONICS DEVICES PRIVATE LIMITED

JUDGEMENT

(1.) THE first petitioner is a government company engaged in granting financial assistance to industrial concerns. Certain provisions of the State Financial Corporations Act, 1951 have been made applicable to the corporation by a notification which is not in dispute. THE corporation granted credit facilities to the first respondent company in or about the year 1983. Simultaneously with the execution of the loan agreement between the corporation and the first respondent, the original respondent nos. 2 to 7 executed a deed of personal guarantee by which they, inter alia, agreed and undertook to repay the corporation, on demand, the money outstanding to the corporation from the principal debtor. THE first and twelfth clauses of the deed of guarantee are relevant:

(2.) UPON the first respondent principal debtor having failed to adhere to its obligation to repay the corporation, the creditor issued a notice under Section 29(1) read with Section 30 of the 1951 Act dated September 29, 1995. Such notice was addressed to the principal debtor and all the guarantors though it clearly specified in its caption that it was issued under the aforesaid provisions of the 1951 Act. The corporation asserted, inter alia, as follows: ?As you have failed to comply with the terms of the contract with WBIDC Ltd. in the matter of the loan or advance made to you under the Agreements and Security Deeds since executed, the Corporation hereby exercise the rights given in the said deeds to call in the entire amount due and notice is hereby given under Section 30 of the State Financial Corporation?s Act 1951 requiring you to discharge your liabilities in full ? in terms of the agreements and security deeds within 15 (Fifteen) days from the date of this notice. In case of default, the provisions of the agreement and security deeds and those of the State Financial Corporation?s Act 1951 shall be enforced against you and further that in exercise of its right under Section 29(1) of State Financial Corporation?s Act 1951, a representative of this Corporation will attend your factory ?on or after 27th October 1995 ? to take possession of your factory without management and this Corporation will proceed to transfer the same ? by public auction or private treaty without any further reference to you.?

(3.) IT is necessary that parts of the order dated January 22, 2008 (reported at AIR 2008 Cal 71) be referred to: