O.A. No. 1968 of 2000. Case: Industrial Finance Corporation of India Ltd. Vs Ashok Kumar Jalan. Mumbai Debt Recovery Tribunals

Case NumberO.A. No. 1968 of 2000
CounselFor Appellant: Rajesh Nagori, Adv., i/b., Shaunak Satpute & Co. and For Respondents: J.P. Sen, Adv. i/b., Mehta and Girdharlal, Advs.
JudgesK.J. Paratwar, Presiding Officer
IssueTextile Undertakings (taking over of management) Act, 1983
CitationIII (2005) BC 142
Judgement DateMarch 16, 2005
CourtMumbai Debt Recovery Tribunals


K.J. Paratwar, Presiding Officer

  1. The guarantor has been sued in this Original Application (O.A.) for recovery of Rs. 87,82,539/- with interest at the contractual rates from the date of filing the original application till full realization.

  2. On or about 2.4.1982, the applicant had sanctioned Term Loan of Rs. 52,50,000/- to M/s. Elphinston Spinning and Weaving Mills Ltd, under Soft Loan Scheme. The defendant had given Letter of Guarantee dated 24.9.1982.

  3. From out of the sanctioned amount, a sum of Rs. 16 lacs was disbursed. The company, however, committed default in repayment. The applicant, therefore, vide letter dated 4.9.1992 called upon the company to pay the outstandings. The company however failed and neglected to pay. The guarantee, therefore, was invoked by letter dated 18.11.1992. The defendant however did not make the payment and has, therefore, been sued.

  4. Vide written statement (Exh. 9), the defendant has resisted the O.A. on the point of limitation. The second ground that since the management of the Borrower Company was taken over with effect from 18.10.1983 by Central Government under provisions of Textile Undertakings (taking over of management) Act, 1983 (and was subsequently handed over to Custodian, National Textile Corporation Ltd.) has already been decided by this Tribunal by order dated 30.7.2004 below Exh. 28. That order has attained finality which may be why the point was not availed of at the time of arguments, The defence that the O.A. by one member of consortium is untenable is also not pressed into service. The furthermore defence contention that the O.A. is untenable in the absence of principal borrower is also not availed of probably having been convinced about the settled legal position that the O.A. is maintainable against guarantor alone. The defendant has then pointed out that the applicant has not clarified rate of interest and the calculations thereof which was necessary particularly when the principal amount is Rs. 16 lacs and the interest is Rs. 71 lacs plus amount. The contention that the guarantee has stood discharged because of taking over of the Government in the circumstances does not, survive.

  5. In the lengthy and repetitive written statement, there is no other contention. The defendant does not seem to deny the availment of the loan by the Brrower Company and that he himself stood as guarantor. The O.A. is sought to be dismissed on above grounds.

  6. The evidence in this case...

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