ONKAR MAL MITTAL Vs. STATE BANK OF PATIALA

JUDGEMENT

(1.) This order of mine shall dispose of F.A.O. Nos. 700 of 1989 and 701 of 1989 and Civil Misc. Nos. 3581-CII of 1991 and 3024-CII of 1991.

(2.) State Bank of Patiala (hereinafter called 'The bank'), filed two suits against the Punjab Spinning and Weaving Mills Limited and others, for the recovery of Rs. 93,37,87612P and Rs. 84,03,020/40P. The appellants were impleaded as defendants in those suits as it was alleged that they stood as guarantors for the repayment of the loan given to the company. The appellants in their written statement have denied that they gave guarantee in their individual capacity. Their case is that they signed the documents in the capacity as. Directors of the company. The Punjab State Industrial Development Corporation (hereinafter called the 'PSIDC' is the promoter of the company, holding majority shares of it.

(3.) During the pendency of the suit, the bank filed an application dated 7th of February, 1987, under Order 38, Rules 5 and 6 read with Order 39, Rules 1 and 2 of the Code of Civil Procedure (hereinafter called 'the Code') vide which the property of the company as well as of the Directors was sought to be attached. Along with the application, it also filed Annexures 'A' and 'B' giving the details of property belonging to the company and the Directors. This application is pending consideration with the trial Court. PSIDC entered into an agreement dated 25th of September, 1986 with the appellants and under the said agreement, PSIDC agreed to purchase shares of the company held by the appellants or their nominees for a total consideration of Rs. 91,00,000.00 (Rs. Ninety one lakh only). Under the said agreement, it was also agreed that a sum of Rs. 48,00,000/(Rs. Forty eight lakh) will be paid by February, 1987 in monthly instalments of Rs. 7.90 lakhs and the balance of Rs. 43 lacs was to be paid to the petitioners in suitable instalments of Rs. 7.90 lacs each month and the total payment was to be made by August, 1987. It was also agreed vide the said agreement that in case of any delay in the payment of instalments, the same shall be payable with interest @ 18% p.a. on the defaulted payment for the defaulted period. It is not in dispute as per the conditions of the agreement that a sum of Rs. 24 lacs has already been paid to the appellants. Before the remaining amount could be paid by the PSIDC to the appellants, the bank filed another application dated 28-4-1987 under Order 38, Rule 5, read with Order 39, Rules 1 and 2, Code of Civil Procedure, seeking attachment before judgment regarding remaining amount which was to be paid by PSIDC to the appellants in pursuance of the agreement dated 25-9-1986.