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2012 DIGILAW 644 (CAL)

Sambhu Nath Sinha v. State Bank of India

2012-07-17

PRASENJIT MANDAL

body2012
Judgment PRASENJIT MANDAL, J. 1. CHALLENGE is to the Order dated April 30, 2007 passed by the learned Chair Person, Debts Recovery Appellate Tribunal, Kolkata in Appeal No.43 of 2005 thereby affirming an order of rejection of an application filed by the two defendants, namely, defendant No.4 and 5 for deletion their names from the said O.A. No.136 of 2004 which is pending before the learned Presiding Officer of the Kolkata Debts Recovery Tribunal-II. 2. THE opposite party No.2 availed itself of the credit facilities from the opposite party No.1/bank and an application for recovery of a sum of Rs.15,37,857/- was filed by the creditor against the opposite party No.2 and its directors, namely, defendant Nos. 4 and 5. In that proceeding, the defendant Nos. 4 and 5 filed an application under Order 1 Rule 10(2) of the CPC praying for expunction of their names from the said proceeding and that application was rejected by the Debts Recovery Tribunal by the Order dated September 7, 2005. Being aggrieved by such order, the defendant Nos. 4 and 5/petitioners herein preferred an appeal being Appeal No. 43 of 2005. That appeal was also dismissed by the impugned order. Being aggrieved, this application has been preferred. 3. NOW, the question is whether the impugned order should be sustained. 4. UPON hearing the learned Advocates for the parties and on going through the materials-on-record, I find that it is not in dispute that on September 21, 1995 the opposite party No.2 availed itself credit facilities from the opposite party/bank and the defendant Nos. 4 and 5 / petitioners herein were the directors of the opposite party No.2 at the time of grant of credit facilities. The petitioners stood as guarantors to repay the loan in their personal capacity. They executed the guarantor agreements and the Demand Promissory Notes on the date of taking loan, that is, on September 21, 1995. 5. SUBSEQUENTLY, the petitioners resigned as Directors of the said company and one Abhijnan Tiwari was substituted as guarantor in place of the said two Directors on August 5, 1999. The new Director signed the Letter of Revival dated July 20, 2002 to the opposite party /bank. 5. SUBSEQUENTLY, the petitioners resigned as Directors of the said company and one Abhijnan Tiwari was substituted as guarantor in place of the said two Directors on August 5, 1999. The new Director signed the Letter of Revival dated July 20, 2002 to the opposite party /bank. The petitioners have contended that the opposite party/bank was duly informed of the substitution of the bank and the bank acted upon accordingly informing the opposite party No.2 that the substitution as prayed for had been effected in place of the petitioners by its letter dated August 4, 1999. 6. MR. Samit Talukdar, learned Advocate appearing for the petitioner has stressed much on the letter of the bank dated September 5, 1997, the minutes of the discussion between the bank and the opposite party No.2 dated August 29, 1998 and the bank's letter dated August 4, 1998 addressed to the opposite party No.2 and thus, he submits that the Debts Recovery Tribunal and the Appellate Authority did not act properly in dealing with the application under Order 1 Rule 10(2) of the CPC. 7. IN support of his contention, Mr. Talukdar refers to the decision of State Bank of India v. Machine Well Industries @ Ors. reported in 1983(53) Company cases 830 and Musunuri Anjaneyulu @ anr. v. Koona Lakshmi reported in AIR 1998 Andhra Pradesh 214 and thus, he submits that in view of the provision of Section 133 of the Indian Contract Act, 1872 when novation took place, the concerned tribunals were not justified in rejecting the application. 8. THE application for recovery of money had not been disposed of and it was at the stage of recording evidence and at that time the said application under Order 1 Rule 10(2) of the CPC had been filed. As noted above, the two petitioners stood as guarantors of the loan transaction in their personal capacity. Under the circumstances, when the Directors of the opposite party No.2 were substituted by a third party, the question that remains open whether the petitioners though resigned as the Directors of the opposite party No.2 could be exempted from their personal liabilities when substitution of the Directors of the opposite party No.2 had already taken place. 9. Under the circumstances, when the Directors of the opposite party No.2 were substituted by a third party, the question that remains open whether the petitioners though resigned as the Directors of the opposite party No.2 could be exempted from their personal liabilities when substitution of the Directors of the opposite party No.2 had already taken place. 9. IN this regard, the Debts Recovery Appellate Tribunal has observed that such a question depends on fact and law both and so, unless evidence is recorded, it is not possible to decide whether the two petitioners could be exonerated from their liabilities because they had retired as Directors of the opposite party No.2. I am of the opinion that the learned Appellate Tribunal has rightly addressed the issue and opined that unless evidence is recorded, the matter in issue cannot be decided. He has rightly observed that the letter dated August 4, 1999 of the bank does not, prima facie, indicate that the two petitioners had been exonerated as guarantors in their personal capacity. Under the circumstances, the learned Appellate Tribunal has held that the two petitioners are the necessary parties as well as the proper parties for deciding the issues before the Debts Recovery Tribunal. 10. THE cases referred to by Mr. Talukdar lays down that the evidence of both the parties was recorded and then the judgments and decrees based on evidence were under challenge. In the instant case, the evidence is yet to be started. So, it is prematured to say whether the petitioners should be exonerated from their liabilities as guarantors in their personal capacities. 11. IN that view of the matter, I am of the opinion that the Debts Recovery Appellate Tribunal has addressed the issue properly and both the DRT and the DRAT have arrived at the same conclusion on the basis of the materials available and the impugned order, prima facie, does not suffer from perversity. Under the circumstances, I am also of the opinion that the concurrent findings should not be interfered with in dealing with an application under Article 227 of the Constitution of India. So, there is no scope of interference with the impugned order. 12. THE application is, therefore, dismissed. 13. CONSIDERING the circumstances, there will be no order as to costs. 14. So, there is no scope of interference with the impugned order. 12. THE application is, therefore, dismissed. 13. CONSIDERING the circumstances, there will be no order as to costs. 14. URGENT xerox certified copy of this order, if applied for, be supplied to the learned Advocates for the parties on their usual undertaking.