9911796707
TMI Blog2000 (10) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal Lodging No. 899 of 2000. By consent allowed and made absolute. Delay condoned. Appeal to be numbered. 3. These two appeals raise common issues of fact and law and, therefore, can conveniently be disposed of by a common judgment. 4. The respondent in both these appeals is a co-operative bank. The respondent had advanced certain monies to two companies known as Shubham Vanijya Ltd. and Singhal Swaroop Ispat Ltd. The appellant herein was a guarantor of the loans advanced by the respondent to the said companies. The respondent moved the Assistant Registrar of Co-operative Societies under section 101 of the Maharashtra Co-op-erative Societies Act, 1960, for issuance of a recovery certificate. On 5-8-1999, a recovery certificate was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ICA came into force and the respondent was unable to recover the debt from the principal debtor-company. Since the order of the recovery certificate was issued against all the respondents to the proceedings before the Assistant Registrar, jointly and severally, the respondent took out an insolvency notice bearing No. N/44 of 1998 dated 25-6-1998. This notice called upon the appellant to pay the amount certified by the Assistant Registrar or provide security therefor or to put forth any set off or counter claim, if any. 6. The appellant took out Notice of Motion No. 71 of 1998 setting aside the insolvency notice. This notice of motion was heard and dismissed by an order made on 20-12-1999, by a learned Single Judge (Rebello J.). Since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Motion No. 821 of 2000, that the appellant insolvent raised certain contentions. Even in this notice of motion it is not the case of the appellant that he had not been served with the insolvency petition or that he had no notice of the date of hearing of the insolvency petition. The contentions urged in Notice of Motion No. 96 of 2000 are as under : 10. The appellant is the guarantor of certain loans to Singhal Swaroop Ispat Ltd. in respect of which, proceedings are pending before the BIFR under the provisions of the SICA. In view thereof, the recovery certificate itself could not be enforced against the appellant in his capacity as guarantor of certain loans to the said industrial company in respect of which, proceedings are pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to such a guarantor company. The Division Bench opined that it was difficult to consider the issuance of an insolvency notice as proceeding further with the original suit. It was held that an insolvency notice is an independent proceeding with its own consequences, although it may be considered as a mode of equitable execution. 12. As far as the appellant s case is concerned, in our judgment, the view taken by the Division Bench of this Court in Sharad R. Khanna s case ( supra ) was binding on the learned Single Judge. It is indeed binding on us too. Upon a conjoint reading of Patheja Bros. Forgings Stamping s case ( supra ) and Sharad R. Khanna s case ( supra ), we are of the view that the only proceeding against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst place, we do not read the recovery certificate dated 5-8-1997 as a conditional recovery certificate. The Assistant Registrar in terms holds that the liability of the two companies and the present appellant was joint and several. Merely because he gave a facility that the recovery certificate be enforced against the principal debtor before being enforced against the appellant-guarantor, we do not think that the validity of the recovery certificate became contingent upon the amount becoming impossible of recovery from the principal debtor-company. Secondly, we find that no such issue was urged before the learned Single Judge since the petition was not contested at all. Finally, even in the memo of appeal, there is no such contention rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncipal debtor had been declared a sick undertaking by the BIFR by order dated 23-3-2000, the learned Single Judge ought not to have confirmed order dated 5-8-1997, as the impugned order against the judgment debtor could not be enforced in view of section 22(4). There is not even a whisper there that the decretal amount was not recoverable from the appellant-guarantor, because the condition precedent in the recovery certificate had not been fulfilled (in fact, the suggestion seems to be the converse). Turning to ground ( c ), it is in terms admitted by the appellant that the certificate of recovery could not be enforced against Singhal Swaroop Ispat Ltd. (principal debtor) as it was declared a sick undertaking, though a corollary is drawn fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
