SYNDICATE BANK Vs. PANCHKULA MALT LTD

JUDGEMENT

(1.) THIS petition under Section 446 of the Companies Act, 1956 (for short "the Act"), has been moved in the following circumstances : The petitioner contemplates to file a suit for the recovery of Rs. 51,19,836. 50 against respondents Nos. 2 to 4 on the basis of the personal continuing guarantee bonds executed by them for advancing a loan to Panchkula Malt Ltd. (since in liquidation ). The petitioner claims no relief against respondent No. 1 but wants to implead it as party defendant, being a necessary party to the suit. Objections have been filed on behalf of respondents Nos. 1 and 4. It is pleaded that the remedy of the petitioner, if any, lay under Section 528 of the Act. The amount in dispute is not legally recoverable and the suit is not manitainable.

(2.) A resume of the facts, narrated in the plaint annexed to the application, is necessary to adjudicate on the prayer made in the application. Respondent No. 1-company in liquidation was ordered to be wound up by this court by an order dated July 27, 1984, in Company Petition No. 211 of 1980. The company in liquidation through a resolution dated June 12, 1976, authorised respondent No. 2 to approach the petitioner for grant of a bridging loan of Rs. 16,50,000. The necessary documents were to be executed by respondent No. 2. Respondents Nos. 2 to 4 executed the personal continuing guarantee bonds for securing the payment of the debt advanced by the petitioner. The liability of the respondents is joint and several. The company in liquidation, by a resolution dated September 30, 1982, authorised respondent No. 2 to sign the acknowledgment and balance confirmation regarding the dues of the bank in various loan accounts. He made the acknowledgment on September 30, 1982. The petition in this court was moved on September 25, 1987. The limitation for recovery of money lent is three years from the date when the loan was advanced as provided in Article 19 of the Limitation Act. Section 18 of the Limitation Act provides that where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. There is no averment in the plaint that, on the date when the acknowledgment was signed, the limitation to institute the suit on the basis of the cause of action, viz. , suit to recover money payable was subsisting. Assuming that the acknowledgment dated September 30, 1982, conforms to the requirement of Section 18 of the Limitation Act, the claim was beyond limitation against respondents Nos. 2 to 4 on the date when the application was moved in this court. Further, the loan was advanced to respondent No. 1, the company in liquidation. The principal liability is that of respondent No. 1. The liability against the guarantor will be enforced only if it is established against the principal loanee and he is unable to discharge it. The creditor cannot unilaterally relinquish the claim against the principal debtor and enforce the claim against the guarantor. The petitioner, as observed earlier, does not want to enforce the claim against the company in liquidation which is the principal loanee, but only wants to enforce the same against respondents Nos. 2 to 4, who are the guarantors. The claim against the guarantors has become barred by time and it cannot be enforced since, according to the petitioner's own showing, it does not want to prosecute the claim against the company in liquidation. Consequently, the permission to sue cannot be granted since the claim has become barred by time against respondents Nos. 2 to 4 and it cannot be enforced since the petitioner has relinquished its claims against respondent No. 1.

(3.) FOR the aforesaid reasons, this application is dismissed.