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Issues Involved:
1. Whether a decree can be passed against defendant No. 1 in the absence of an application for leave to defend. 2. Whether the suit against defendant Nos. 2 and 3 falls under Order 37 of the Code of Civil Procedure. 3. Whether the resolution, receipt, and undertaking constitute a written agreement and if the receipt is properly stamped. 4. Whether the guarantee given by defendant Nos. 2 and 3 is properly stamped and if plaintiffs can rectify the defect by paying fines. 5. Whether the guarantee given by defendant Nos. 2 and 3 was in their personal capacity or as directors. 6. Whether notice served on defendant No. 3 was as required by the guarantee. 7. Whether defendants are entitled to unconditional leave to defend due to delay in moving Summons for Judgment. 8. Whether the suit against defendant No. 1 is maintainable under section 446(2) of the Companies Act. Issue-wise Detailed Analysis: 1. Decree Against Defendant No. 1 Without Leave to Defend: The court held that a decree can be passed against defendant No. 1 in the absence of an application for leave to defend if the suit is maintainable as a summary suit. The court found that there was a written agreement between the parties, consisting of a board resolution, a receipt, and an undertaking. The receipt was properly stamped, thus admissible in evidence. Consequently, the suit against defendant No. 1 was maintainable as a summary suit, and a decree could be passed. 2. Suit Against Defendant Nos. 2 and 3 Under Order 37: The court examined whether the suit fell under Order 37 of the Code of Civil Procedure, which applies to suits based on written contracts or guarantees. The court found that the documents constituted a written agreement, making the suit maintainable under Order 37. However, the claim for interest at a compounded rate was not supported by the guarantee terms, which only mentioned additional or penal interest. Therefore, the suit against defendant Nos. 2 and 3 could not be maintained as a summary suit for the interest claimed. 3. Written Agreement and Proper Stamping: The court concluded that the resolution, receipt, and undertaking together constituted a written agreement. The receipt was properly stamped as per the Bombay Stamp Act, making it admissible in evidence. Therefore, the suit against defendant No. 1 was maintainable as a summary suit. 4. Proper Stamping of Guarantee: The guarantee was executed on a stamp paper of Rs. 10, which was the correct stamp duty under article 37 of the Bombay Stamp Act. Therefore, the guarantee was properly stamped, and the plaintiffs could sue based on it. The court rejected the defendants' contention that the guarantee was not properly stamped. 5. Personal Capacity or as Directors: The court found that defendant Nos. 2 and 3 had signed the guarantee in their personal capacity, as indicated by the resolution and the guarantee document. Therefore, the guarantee was binding on them personally. 6. Notice to Defendant No. 3: The court noted that the notice invoking the guarantee was not sent to the address specified in the guarantee but was received at the office of defendant No. 1. The court held that failure to give notice at the specified address must show prejudice. Since there was no evidence of personal receipt by defendant No. 3, this defense had to be considered while deciding on leave to defend. 7. Delay in Moving Summons for Judgment: The court rejected the contention that defendants were entitled to unconditional leave to defend due to the delay in moving Summons for Judgment. The court emphasized that leave to defend should be based on the defenses disclosed in the affidavit, not merely on procedural delays. 8. Suit Maintainability Under Section 446(2) of the Companies Act: The court held that the suit was maintainable as it was filed before the appointment of the provisional liquidator. Permission under section 446(2) was not required since the suit was initiated before the winding-up order or the appointment of the liquidator. Order: (i) The suit was decreed against defendant No. 1 in terms of the prayer for the principal amount and interest. (ii) Defendant Nos. 2 and 3 were given unconditional leave to defend the suit and granted 12 weeks to file a written statement. (iii) The suit was transferred to the list of Commercial Causes for further proceedings.
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