2000 (10) TMI 924 - HC - Companies Law

Summary

Issues Involved:
1. Cause of action
2. Concealment of material facts and maintainability
3. Limitation
4. Estoppel
5. Surety for electric connection
6. Liability of defendant No. 2
7. Entitlement to interest
8. Amount towards principal and interest

Detailed Analysis:

Issue Nos. 2 and 3: Concealment of Material Facts and Limitation

The plaintiff's claim was based on outstanding amounts as of December 31, 1991, with the suit filed on January 11, 1996. The defendant argued the suit was time-barred, exceeding the three-year limitation period. However, the plaintiff contended that proceedings under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, were pending until February 8, 1993, which should exclude this period from the limitation calculation. The court found that the suit was indeed time-barred, as the requisite leave under Section 446 of the Companies Act, 1956, was obtained on July 9, 1998, making the effective filing date beyond the permissible period. Thus, both issues were decided against the plaintiff.

Issue Nos. 1 and 5: Cause of Action and Surety for Electric Connection

Defendant No. 2 claimed it never stood as a surety for Defendant No. 1. The surety bond (Exhibit PW-4/B) was signed by individuals in their personal capacities, not on behalf of the defendant firms. Therefore, the court concluded that the electric connection was not granted based on the surety of Defendant Nos. 2 and 3, and the plaintiff had no cause of action against them. These issues were decided in favor of the defendants.

Issue No. 6: Liability of Defendant No. 2

Given the findings on Issue No. 5, neither Defendant No. 2 nor Defendant No. 3 was liable for the suit amount. This issue was also decided in favor of the defendants.

Issue No. 4: Estoppel

This issue was not pressed during the hearing and was decided against the defendants.

Issue Nos. 7 and 8: Entitlement to Interest and Amount Towards Principal and Interest

Based on the findings of the preceding issues, the plaintiff was not entitled to recover any amount or interest from any of the defendants. These issues were decided against the plaintiff.

Relief:

As a result, the suit was dismissed, with each party bearing its own costs.