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Issues:
1. Liability of respondent-company and UDI towards petitioner-bank for outstanding debt. 2. Effect of the agreement dated 31-3-1992 on the liability of the respondents. 3. Whether the petition is maintainable despite the agreement with Sterling and legal actions taken against Sterling. Analysis: 1. The respondent-company obtained a contract from MTNL and approached the petitioner-bank for credit facilities. Despite failing to repay the loan, the bank facilitated a letter of credit facility. As of 31-3-1990, a significant sum was due from the respondents. A subsequent agreement with Sterling aimed to discharge the liabilities, but Sterling's default led to the bank seeking payment from the respondents. 2. The agreement dated 31-3-1992 outlined Sterling's obligation to repay the loan amount, with the bank having the right to recover from the respondents in case of default by Sterling. The dishonour of post-dated cheques by Sterling triggered the bank to demand payment from the respondents, as per the terms of the agreement. The agreement clearly stated that the liability of the respondents was additional to that of Sterling, and any breach by Sterling did not absolve the respondents of their responsibility. 3. The respondents argued that the agreement with Sterling discharged their liability and the bank's actions against Sterling barred the present petition. However, the court held that the agreement did not release the respondents from their obligations. The bank had the right to pursue multiple remedies, and the liability of the respondents continued until payment. Therefore, the petition was deemed maintainable, and the respondents were found to be still indebted to the petitioner-bank. In conclusion, the court admitted the petition, appointed the Official Liquidator as the Provisional Liquidator, and directed the custody and inventory of the respondents' assets.
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