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2004 DIGILAW 1071 (MAD)

PL. Ramanathan & Another v. K. Geetha

2004-08-16

V.KANAGARAJ

body2004
Judgment :- The above Civil Revision Petition is directed against the fair and decretal order dated 1.12.2003 made in I.A.No.50 of 2003 in O.S.No.15 of 2003 by the Court of Prl. Subordinate Judge, Salem. 2. Tracing the history of the above Civil Revision coming to be filed before this Court, what comes to be known is that the respondent herein has filed the suit in O.S.No.15 of 2003 before the lower Court for recovery of a sum of Rs.6,75,225.00 with subsequent interest at 14% per annum from the date of suit till realisation from the defendants, for a personal decree against the defendants 2 and 3 for the amount due to the plaintiff and for costs; that the respondent herein has also filed an Interlocutory Application in I.A.No.50 of 2003 praying to issue notice to the petitioners herein calling upon them to furnish security for the suit amount and failure to furnish such security, attach the properties mentioned in the petition before judgment. 3. It further comes to be known that the learned Principal Subordinate Judge having considered the pleadings by the parties, having framed his own point for consideration and having discussed elaborately would ultimately allow the above Interlocutary Application with costs thereby ordering attachment before judgment on ground that even though by order dated 8.1.2003 the petitioners herein were directed to furnish security for the suit debt on or before 22.1.2003, they failed to furnish security as directed by the Court. It is only testifying the validity of the said fair and decretal order, the petitioners herein have come forward to file the above Civil Revision Petition on certain grounds as brought forth in the grounds of revision. 4. During arguments, the learned counsel appearing on behalf of the petitioners, besides reiterating the facts of the case as pleaded in the above revision petition particularly in the grounds of revision, would also cite a judgment of the Honourable Apex Court delivered in M/s. PATHEJA BROS. FORGINGS & STAMPING AND ANR. vs. I.C.I.C.I. Ltd. & OTHERS reported in 2000(5) Supreme 257 wherein the Honourable Apex Court would narrate the gist of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 as follows: "... FORGINGS & STAMPING AND ANR. vs. I.C.I.C.I. Ltd. & OTHERS reported in 2000(5) Supreme 257 wherein the Honourable Apex Court would narrate the gist of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 as follows: "... no suit (a) for the recovery of money, or (b) for the enforcement (i) of any security against the industrial company, or (ii) of any guarantee in respect of any loan loan or advance granted to the industrial company shall lie or be proceeded with except with the consent of the Board or the Appellate Authority under the said Act." The Honourable Apex Court, quoting the above Section, would hold: ".... The words are crystal clear. There is no ambiguity therein. It must, therefore, be held that no suit for the enforcement of a guarantee in respect of a loan or advance granted to the concerned industrial company will lie or can be proceeded with without the sanction of the Board or the Appellate Authority under the said Act." 5. Citing the above judgment, the learned counsel for the petitioners would exhort that this provision of law as espoused by the Honourable Apex Court is applicable to the case in hand since the first defendant is a company which has been declared "sick" and only for the benefit of the said company, the defendants 2 and 3 have executed the suit pronote in favour of the plaintiff and therefore since a bar is created under this provision of law, the fair and decretal order passed by the Court below cannot be either right or implemented and would seek to allow the above Civil Revision Petition setting aside the order of the Court below. 6. On the other hand, the learned counsel appearing on behalf of the respondent would submit that it is not the case of the petitioners that they have executed the pronote only acting for and on behalf of the first defendant company, which is alleged to be a "sick industry", but in their individual capacity also, they have executed the suit pronote and therefore they are personally liable to pay the said amount in favour of the plaintiff, who is also an individual. The learned counsel for the respondent would further submit that the revision petitioners besides the first defendant company are enjoying huge properties of their own without having any nexus to the company and therefore, they could easily offer the security and on such arguments, the learned counsel for the respondent would seek to dismiss the above civil revision petition. 7. In consideration of the facts pleaded, having regard to the materials placed on record and upon hearing the learned counsel for both, it could be assessed that a loan of Rs.5 lakhs has been obtained by the petitioners from the respondent promising to repay the same with such interest on demand and in fact, the recitals of the pronote would indicate that they are the Directors of the Jawahar Mills Limited, Salem-5 and they jointly and severally for themselves and on behalf of the Jawahar Mills Limited, each of them personally promising to pay to the respondent, have borrowed the said amount duly executing the suit pronote. The Court below, having extracted the version of the pronote in its order and discussing on the subject as to whether it is only for and on behalf of the first defendant company and for the benefit of the first defendant company, the petitioners have borrowed the amounts or have they borrowed the amounts in their individual capacity or in both, has ultimately arrived at the conclusion that these two petitioners have executed the pronote not only as the Directors of the company but also in their individual capacity; that individual interest is there for the petitioners to have borrowed the money and to have enjoyed the same and therefore it cannot solely be attributed to have been borrowed by the company or for and on behalf of the company under the company's seal and signature or in their representative capacity of the company, but these two petitioners in their individual capacity and also binding their company have executed the pronote in favour of the respondent/plaintiff and have borrowed the amount; that since there is no dispute regarding the borrowing of the amount or the manner in which the same has been borrowed, the point 'whether the said pronote amount has been borrowed by only the first defendant company for its benefit without anyone having his personal interest in the same' has been answered in the negative; that the borrowers are the individual petitioners for their benefits and binding the company's interest also and they have executed the pronote on receipt of the said amount borne by the pronote and therefore Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, which is meant to safeguard the interests of only the sick industries, will have no bearing for the amounts borrowed by the petitioners in their individual capacity. Therefore, the trial Court has every reason to arrive at its conclusion to reject the contentions of the petitioners herein who are the respondents before the trial Court. Therefore, the petitioners are not entitled to the benefits of either Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 or the proposition propounded by the Honourable Apex Court in the judgment cited supra. 8. Therefore, the petitioners are not entitled to the benefits of either Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 or the proposition propounded by the Honourable Apex Court in the judgment cited supra. 8. Whether it is the conclusion that has been arrived at by the trial Court in the petition filed before it or the manner in which the said conclusion has been arrived at, this Court is not able to find any inconsistency or legal infirmity and therefore the interference of this Court sought to be made into the well considered and merited order passed by the trial Court is neither necessary nor called for in the circumstances of the case. In result, (i) the above civil revision petition does not merit acceptance and it becomes liable only to be dismissed and is dismissed accordingly. (ii) The fair and decretal order dated 1.12.2003 made in I.A.No.50 of 2003 in O.S.No.15 of 2003 by the Court of Principal Subordinate Judge, Salem is hereby confirmed. However, in the circumstances of the case, there shall be no order as to costs. Consequently, C.M.P.No.8307 of 2004 is closed.