9911796707
TMI Blog2004 (4) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... was liable to pay royalty on the timber so felled to the appellant. This lease was initially valid up to 1968 and was then extended up to 1971. 2. In 1972, the company passed a resolution that it should be wound up voluntarily under section 484 of the Companies Act, 1956. The final order for winding up was passed by the High Court of Punjab and Haryana on 7-2-1975. 3. In June, 1975, a suit was filed by the bank against the company and the appellant for various reliefs including a decree for payment of money by the appellant to the bank. The case of the bank in the suit was that the company was its constituent. From time to time the bank had advanced loans to the company. The company's financial affairs deteriorated some time in 1969. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued for a period of two years. It was admitted that there was no formal agreement as required under section 122 of the Constitution of Jammu and Kashmir (hereinafter referred to as "the Constitution"). The respondent-bank's case was that it was entitled to a return of Rs. 6 lakhs advanced by it pursuant to the alleged arrangement. A decree was accordingly prayed for against the appellant (defendant No.1) and the company and persons who the bank claimed had guaranteed the repayment of the company's dues (being defendant Nos. 2 to 5 in the suit). 5. A written statement was filed by the respondent-bank in which the arrangement was denied and it was also pleaded that the alleged agreement would, in any event, be contrary to section 122 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been established because there was no cross examination on the evidence given in this regard by the bank's witnesses. It was also noted that the appellant had not produced any witnesses in support of its case that there was no such arrangement, as pleaded by the respondent-bank. In addition the trial judge noted the contents of the letter dated 1-6-1969, which was addressed by the managing director of Jammu and Kashmir State Financial Corporation to the respondent-bank and said that the letter unequivocally established that the proposal had been finalized and that the additional loan which had been sanctioned in terms thereof by the respondent-bank in favour of the company. This was in fact placed at the disposal of the Forest Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant date. 14. As far as merits of the matter were concerned, the Division Bench did not consider the issue of the respondent-bank's claim against the company or any of its shareholders/guarantors at all. It concentrated on the claim of the bank against the appellant State alone. This has not been challenged by the respondent-bank before us. Thus as far as the company and the other guarantors are concerned the respondent-bank's claim against them must be taken to have been rejected. As far as the respondent-bank's claim against the appellant was concerned, after noting the pleadings and quoting from the judgment of the trial court, the Division Bench, without any independent discussion of the evidence, agreed with the findings of the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had been obtained at the time of filing of the suit and the question was whether fresh leave ought to be obtained before proceeding under section 446(1) before institution of execution proceedings. This court considered the contrary views expressed by the different High Courts on the effect and purport of section 446(1) and came to the conclusion that the view expressed by the Calcutta High Court was correct, namely, that the failure to obtain leave prior to institution of suit would not debar the court from granting such leave subsequently and that the only consequence of this would be that the proceedings would be regarded as having been instituted on the date on which the leave was obtained from High Court. In view of this categorical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench that this "agreements/assurances/guarantees" as claimed by the respondent-bank which was alleged to have been entered into between respondent-bank, respondent No. 2 and the appellant State was a continuation of the agreement which was between the appellant State and the respondent-bank alone is in any event unsustainable. The second ground for holding that section 122 did not apply is equally untenable but more confusing. Reliance has been placed by the Division Bench on the nature of the original contract between the appellant and the respondent-company. It was held that it was a sale of goods which had been effected between the appellant State and the company subject to certain conditions of payment of royalty, etc. From this major ..... X X X X Extracts X X X X X X X X Extracts X X X X
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