JUDGMENT By the Court.—The petitioner has filed the present Writ Petition under Article 226 of the Constitution of India, inter alia, praying for quashing the order of attachment dated 26.10.1998 (Annxure-4 to the Writ Petition) and the Sale Proclamation dated 18.12.1998 (Annexure-9 to the Writ Petition), and further, for directing the respondent No. 1 to return the document of title in its possession to the petitioner, and further, for directing the respondents not to recover any amount from the petitioner in respect of the Bond executed by the petitioner dated 11.11.1992. 2. It is, inter alia, stated in the Writ Petition that the respondent Nos. 7 to 10 constituted a partnership firm under the name and style of M/s Ahmad Agro Industries (respondent No. 6) for working of a unit at Plot No. K-12, measuring 691 square meters, at Industrial Area, Begrajpur, district-Muzaffarnagar for manufacturing agricultural implements; and that for the said purpose the respondent No. 6 through the partners got a term loan of Rs. 6,97,000/- as well as working capital loan for a sum of Rs. 3,38,000/- sanctioned under the single window scheme on 22.10.1990; and that in pursuance of the said sanction dated 22.10.1990, a loan agreement dated 14.3.1991 was executed between U.P. Financial Corporation and the respondent Nos. 6 to 10; and that the respondent Nos. 6 to 10 in pursuance of the said loan agreement also hypothecated land, building and machinery, equitable mortgage-deed by deposit of title deed and one of the partners Shafiq Ahmad created equitable mortgage of his property also. 3. It is, inter alia, further stated in the Writ Petition that Smt. Anita Sharma, wife of Sri Kumidini Kant Sharma also executed a collateral security for the recovery of the working capital loan amounting to Rs. 3,38,000/-; and that, however, some dispute arose between Smt. Anita Sharma and the respondent Nos. 6 to 10, whereupon by letter dated 29.10.1992 the respondent Nos. 6 to 10 requested to change the guarantee of Smt. Anita Sharma to that of the petitioner; and that in pursuance of the said understanding the petitioner executed a Bond of Guarantee dated 11.11.1992; and that by means of the said Bond of Guarantee, the petitioner agreed to pay the sum of Rs. 3,38,000/- alongwith interest, the amount which was sanctioned towards working capital loan. 4. 3,38,000/- alongwith interest, the amount which was sanctioned towards working capital loan. 4. Copy of the Bond of Guarantee executed on 11.11.1992 alongwith the Receipt has been filed as Annexure-1 to the Writ Petition. 5. It is, inter alia, further stated in the Writ Petition that no amount of loan towards working capital loan of Rs. 3,38,000/- was released by the Corporation upto 20.2.1993; and that the petitioner, therefore, wrote a letter to the Regional Manager, U.P. Financial Corporation, Muzaffarnagar withdrawing the Guarantee on the ground that since the amount had not been released upto the said date hence requested to cancel the working capital loan and release the original papers. 6. Copy of the said letter dated 20.2.1993 has been filed as Annexure-2 to the Writ Petition. 7. It is, inter alia, further stated in the Writ Petition that the petitioner again sent a letter dated 8.10.1998 to release the papers with regard to the Guarantee executed on 11.11.1992. Copy of the said letter dated 8.10.1998 has been filed as Annexure-3 to the Writ Petition. 8. It is, inter alia, further stated in the Writ Petition that in the meantime the respondent No. 1 issued a recovery certificate on 31.12.1997 against M/s Ahmad Agro Industries (respondent No. 6) for an amount of Rs. 11,85,629.70 with interest in which the petitioner was shown as partner; and that the petitioner was not served with any recovery certificate or any citation and inspite of the demand being raised by the petitioner for the issue of the recovery certificate and the citation the same was not issued to the petitioner; and that, however, the petitioner received an order of attachment dated 26.10.1998 by which the house of the petitioner, the value of which was fixed at Rs. 2,25,000/- was attached. Copy of the order of attachment dated 26.10.1998 has been filed as Annexure-4 to the Writ Petition. 9. It is, inter alia, further stated in the Writ Petition that thereafter the petitioner made a representation to the Managing Director, U.P. Financial Corporation on 8.11.1998; and that the said representation was sent by FAX; and that a copy of the said representation was also faxed to the Regional Manager, U.P. Financial Corporation, Muzaffarnagar. Copy of the said representation dated 8.11.1998 has been filed as Annexure-5 to the Writ Petition. 10. Copy of the said representation dated 8.11.1998 has been filed as Annexure-5 to the Writ Petition. 10. It is, inter alia, further stated in the Writ Petition that the petitioner thereafter made a representation to the District Magistrate, Muzaffarnagar on 9.11.1998; and that the District Magistrate, Muzaffarnagar on 9.11.1998 itself directed Additional District Magistrate (Finance) to enquire into the matter; and that the Additional District Magistrate (Finance) referred the representation of the petitioner on 12.11.1998 to the Tehsildar, Muzaffarnagar for his report; and that, however, the Tehsildar had not submitted any report till date; and that the Additional District Magistrate (Finance) had also not submitted any report to the District Magistrate. Copy of the said representation dated 9.11.1998 has been filed as Annexure-6 to the Writ Petition. 11. It is, inter alia, further stated in the Writ Petition that the petitioner thereafter again sent a FAX message dated 7.12.1998 to the Managing Director, U.P. Financial Corporation with a copy to the Regional Manager. Copy of the said FAX message has been filed as Annexure-7 to the Writ Petition. 12. It is, inter alia, further stated in the Writ Petition that the Regional Manager, U.P. Financial Corporation, Muzaffarnagar sent a FAX message to the Senior Manager (Technical) (Recovery), Head Office, Kanpur, inter alia, stating that a recovery certificate dated 31.12.1997 for Rs. 11,85,630.97 had been issued against M/s Ahmad Agro Industries, Muzaffarnagar alongwith guarantor- Smt. Sunita Sharma as well as about the representation made by the petitioner. The said FAX message, inter alia, further stated that the request of Smt. Sunita Sharma for releasing her collateral security which was given for working capital loan seemed to be legitimate as WCTL was not released but on account of provision in the loan agreement the security provided for WCTL was also to cover FACTL. In the circumstances, it was recommended that C.R.M. & C.L.M. would discuss the issue with Senior Authorities so that proper decision could be taken. 13. Copy of the said FAX message dated 11.12.1998 has been filed as Annexure-8 to the Writ Petition. 14. It is, inter alia, further stated in the Writ Petition that inspite of the various representations made by the petitioner as well as the said FAX message sent by the Regional Manager, the property of the petitioner had been notified on 18.12.1998 for sale fixing 22.1.1999. 14. It is, inter alia, further stated in the Writ Petition that inspite of the various representations made by the petitioner as well as the said FAX message sent by the Regional Manager, the property of the petitioner had been notified on 18.12.1998 for sale fixing 22.1.1999. Copy of the said sale proclamation dated 18.12.1998 has been filed as Annexure-9 to the Writ Petition. 15. Making the aforementioned averments, the petitioner has filed the present Writ Petition, inter alia, praying for the reliefs as mentioned in the earlier part of this judgment. 16. By the order dated 20.1.1999, this Court directed for issuance of notice on the Writ Petition, and further directed that “until further orders, recovery proceedings and the sale proclamation which was previously scheduled for 18.12.1998 and now scheduled for 22.1.1999 (Annexure-9 to the Writ Petition) in reference to the petitioner, Smt. Sunita Sharma shall remain stayed.” 17. We have heard Shri Vishnu Sahai, learned counsel for the petitioner, Shri Satish Chaturvedi, learned counsel for the respondent Nos. 1, 2 and 3 and the learned Standing Counsel appearing for the respondent Nos. 4 and 5, and perused the record. None is present on behalf of the respondent Nos. 6, 7, 8, 9 and 10. 18. From a perusal of the record, it transpires that even though more than 9 years have passed since filing of the Writ Petition, no counter affidavit has been filed either on behalf of the respondent Nos. 1, 2 and 3 or on behalf of the respondent Nos. 4 and 5. The case was listed before the Court on various dates such as 25.4.2007, 30.4.2007, 3.1.2008 and 28.1.2008, but no counter affidavit has been filed on behalf of the said respondents. No prayer has been made today on behalf of the said respondents for grant of further time for filing counter affidavit. Even otherwise, as the matter is an old one, there is no good ground or sufficient reason for grant of any further time for filing counter affidavit. In the circumstances, we are proceeding to decide the matter on the basis of the averments made in the Writ Petition. 19. Paragraphs 19 and 24 of the Writ Petition are relevant for deciding the controversy involved in the present Writ Petition, and the said paragraphs are reproduced below : “19. In the circumstances, we are proceeding to decide the matter on the basis of the averments made in the Writ Petition. 19. Paragraphs 19 and 24 of the Writ Petition are relevant for deciding the controversy involved in the present Writ Petition, and the said paragraphs are reproduced below : “19. That it may be stated that a perusal of the Guarantee Bond (Annexure-1) as well as the Fax messages would clearly show that the petitioner, who has no concern with the respondent No. 6 M/s. Ahmad Agro Industries, Muzaffarnagar and she is not a partner of the said firm, had withdrawn her bond and the Corporation has also not issued any working capital loan to M/s. Ahmad Agro Industries, Muzaffarnagar and in-spite of the same the property of the petitioner is being sold. 24. That in view of the facts and circumstances stated above, the recovery of the amount of loan sanctioned to respondent No. 6 towards term loan from the petitioner is absolutely illegal and without jurisdiction. As already stated, the petitioner had executed a Bond agreeing to pay the amount of Rs. 3,38,000 with interest towards working capital loan. However, since no loan amount towards working capital loan was ever disbursed or withdrawn by respondents No. 6 to 10, the question of recovering any amount from the petitioner in respect of amount of loan paid towards term loan of Rs. 6,97,000 or any agreement between the respondent No. 1 and respondents No. 6 to 10 could not make the petitioner liable for making the payment of any amount as the petitioner had agreed only to pay the sum of Rs. 3,38,000 with interest towards working capital loan and since no such loan amount was paid, hence the recovery proceedings against the petitioner are absolutely illegal, without jurisdiction and null and void.” 20. As noted above, no counter affidavit controverting the averments made in the Writ Petition has been filed on behalf of the respondent Nos. 1, 2 and 3 or on behalf of the respondent Nos. 4 and 5, and, therefore, the averments made in the Writ Petition including those made in the above-quoted paragraphs remain uncontroverted. 21. As noted above, no counter affidavit controverting the averments made in the Writ Petition has been filed on behalf of the respondent Nos. 1, 2 and 3 or on behalf of the respondent Nos. 4 and 5, and, therefore, the averments made in the Writ Petition including those made in the above-quoted paragraphs remain uncontroverted. 21. From a perusal of the averments made in the Writ Petition particularly those made in the above-quoted paragraphs, it is evident that the petitioner had no concern with the respondent No. 6-M/s Ahmad Agro Industries, Muzaffarnagar, and she was not a partner of the said firm. The petitioner had only executed a Bond agreeing to pay the amount of Rs. 3,38,000/- with interest towards working capital loan. The Bond of Guarantee executed by the petitioner was withdrawn by her by the letter dated 20.2.1993. No loan amount towards working capital loan was ever disbursed to or withdrawn by the respondent Nos. 6 to 10. As regards the amount of loan sanctioned to the respondent No. 6 towards term loan, the petitioner could not be made liable for the same, as she had agreed only to pay the sum of Rs. 3,38,000/- with interest towards working capital loan. 22. The said averments, as noted above, remain uncontroverted, and there is no valid or good reason to disbelieve the same. 23. Even otherwise, the correctness of the said averments is evident from the FAX message dated 11.12.1998, copy whereof has been filed as Annexure-8 to the Writ Petition. It is, inter alia, stated in the said FAX message that in regard to M/s Ahmad Agro Industries, Muzaffartnagar (respondent No. 6 herein) “term loan of Rs. 6.97 lacs and working capital loan of Rs. 3.38 lacs were sanctioned by the Corporation on 22.10.90 in ‘SINGLE WINDOW SCHEME’ for setting up an ‘Agriculture implements’ unit at Plot No. K-12, Indl. Area, Begrajpur, Muzaffarnagar............ The working capital loan was also cancelled, as the party did not take any step for lifting the same.” 24. It is, inter alia, further stated in the said FAX message as follows : “................In this case R.C. dated 31.12.1997 for Rs. 11,85,630.97 has been issued against the unit alongwith Guarantors Smt. Sunita Sharma wife of Sri Chakradhari Sharma. Smt. Sunita Sharma, guarantor/mortgagor in the unit and also given Collateral security against working capital loan i.e. House No. 898-A, Sarwat, Muzaffarnagar. 11,85,630.97 has been issued against the unit alongwith Guarantors Smt. Sunita Sharma wife of Sri Chakradhari Sharma. Smt. Sunita Sharma, guarantor/mortgagor in the unit and also given Collateral security against working capital loan i.e. House No. 898-A, Sarwat, Muzaffarnagar. Now she has given a representation that since the W.C.T.L. was not lifted and was subsequently cancelled hence recovery from her, Collateral security cannot be done.........” 25. It is further pertinent to note that the respondent Nos. 7 to 10 filed Suit No. 659 of 1997 in the Court of Civil Judge (Senior Judge), Muzaffarnagar against U.P. Financial Corporation in which it was prayed that no amount of loan sanctioned towards Term Loan or Working Capital Loan may be realized from them and for injunction etc. Averments in this regard have been made in paragraph 20 of the Writ Petition. Copy of the plaint of the said Suit has been filed as Annexure-10 to the Writ Petition. 26. In the said Suit, Written Statement on behalf of U.P. Financial Corporation was filed, copy whereof has been filed as Annexure-11 to the Writ Petition. 27. Paragraphs 38, 39, 40 and 41 of the said Written Statement, which are relevant in the present context, are as under : “38. That the plaintiffs/Borrowers could only lift a Term Loan of Rs. 6,33,000/- out of the sanctioned Term Loan of Rs. 6,97,000/-, and could not lift at all the Working Capital Limit of Rs. 3,38,000/- due to dispute with their Guarantors and insufficient security. 39. That the said Smt. Sunita Sharma, one of the Guarantors of the aforesaid loan, had written a letter dated 20.3.1993, to cancel her guarantee as she did not want to remain further the Guarantor for security for the said loan facilities to the plaintiffs. Copy of the letter has been filed with the objections as Annexure III. Allegations to the contrary are not admitted and are specifically denied. 40. That due to this dispute between the plaintiffs and their Guarantor, the answering defendant/U.P.F.C. vide their final notice dated 29.3.1993 to the plaintiffs, have written to them to furnish fresh security/guarantee, failing which the undisbursed loan for Working Capital will be treated as cancelled since the plaintiffs failed to provide security in place of Smt. Sunita Sharma, and to avoid the dispute and insecurity of the answering defendant/ U.P.F.C. the undisbursed sanctioned loan was cancelled by them. The copy of the letter of the answering defendant/U.P.F.C. sent to the plaintiffs dated 29.3.1993, has been filed with the objections as Annexure IV. Allegations to the contrary are not admitted and are specifically denied. 41. That the plaintiff-themselves could not comply with the terms and conditions of the aforesaid loan Agreement Deed and Hypothecation Deed dated 14.3.1991 and could not provide the collateral security, as well as third party guarantee to the loan. Since the plaintiffs could not comply with the loan terms and conditions, and the dispute among the Guarantors, and of changing guarantee from the original guarantee of the said Smt. Anita Sharma to the said Smt. Sunita Sharma, and thereafter Smt. Sunita Sharma too finally withdrawing her guarantee and of insufficient security of the aforesaid loan amount, the answering defendant/U.P.F.C. was left with no other alternative except to cancel the balance undisbursed loan amount. Allegations to the contrary are not admitted and are specifically denied.” 28. The averments made in the Written Statement, thus, show that the borrowers (respondent Nos. 6 to 10) could only lift a Term Loan of Rs. 6,33,000/- out of the sanctioned Term Loan of Rs. 6,97,000/-, and could not lift at all the Working Capital Loan of Rs. 3,38,000/-. It is further evident that the petitioner-Smt. Sunita Sharma withdrew her guarantee by her letter dated 20.2.1993, and in the circumstances, the balance undisbursed loan amount was cancelled by the U.P. Financial Corporation. 29. Hence, from the averments made in the Written Statement, it is evident that the Working Capital Loan was never lifted by the borrowers (respondent Nos. 6 to 10), and in view of the fact that the petitioner withdrew her guarantee, the balance undisbursed loan amount was cancelled by the U.P. Financial Corporation. 30. Thus, the above-mentioned FAX message as well as the averments made in the said Written Statement, filed on behalf of the U.P. Financial Corporation in the above-noted Suit, substantiated the averments made in the Writ Petition. 31. It follows, therefore, that the petitioner had executed Bond of Guarantee dated 11.11.1992 in respect of Working Capital Loan only. No amount of Working Capital Loan was released by the U.P. Financial Corporation. In the circumstances, the petitioner withdrew her guarantee. In view of the withdrawal of guarantee by the petitioner, the U.P. Financial Corporation cancelled the undisbursed loan amount. It follows, therefore, that the petitioner had executed Bond of Guarantee dated 11.11.1992 in respect of Working Capital Loan only. No amount of Working Capital Loan was released by the U.P. Financial Corporation. In the circumstances, the petitioner withdrew her guarantee. In view of the withdrawal of guarantee by the petitioner, the U.P. Financial Corporation cancelled the undisbursed loan amount. We are of the view that as the Bond of Guarantee of the petitioner was in regard to the Working Capital Loan only, and as no amount was disbursed in respect of the Working Capital Loan, and ultimately the undisbursed loan amount was cancelled by the U.P. Financial Corporation, no recovery proceedings could be taken against the petitioner, and the order of attachment dated 26.10.1998 attaching the house of the petitioner as well as the sale proclamation dated 18.12.1998 for sale of the property of the petitioner were evidently illegal, and the same cannot be sustained. 32. It may be noted that the petitioner had not given any guarantee in respect of the Term Loan sanctioned to the respondent No. 6, and as such, no recovery proceedings could be taken against the petitioner in respect of such Term Loan disbursed/paid to the respondent Nos. 6 to 10. 33. In view of the above, the Writ Petition deserves to be allowed, and the order of attachment dated 26.10.1998 (Annexure-4 to the Writ Petition) and the sale proclamation dated 18.12.1998 (Annexure-9 to the Writ Petition) are liable to be quashed. 34. The Writ Petition is accordingly allowed. The order of attachment dated 26.10.1998 (Annexure-4 to the Writ Petition) and the sale proclamation dated 18.12.1998 (Annexure-9 to the Writ Petition) are quashed. The respondent No. 1-U.P. Financial Corporation is directed to return to the petitioner, the document of title submitted to it by the petitioner within two months of the production of a certified copy of this order before the respondent No. 1. The respondents are further restrained from taking any recovery proceedings in respect of the Bond executed by the petitioner dated 11.11.1992. 35. However, on the facts and in the circumstances of the case, there will be no order as to costs. ————