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TMI Blog2009 (12) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... .9.2001, a Finance Agreement executed between the plaintiffs and the company. The plaintiffs duly advanced to the Company Rs. 14 crores. The defendant and her husband Shri Venkatesh was the promoter/ director of the Company. 5. On 21.09.2002, a Deed of Confirmation was executed between the plaintiffs and the Company modifying certain terms and conditions of the facility granted to the company which was also signed by late Shri Venkatesh Lakshman Prabhu, Managing Director of the Company as a Guarantor. The Managing Director of the Company late Shri Venkatesh Prabhu expired. 6. On 15.03.2003, the defendant executed a Personal Guarantee in favour of the plaintiffs guaranteeing the due repayment of the amount advanced by the plaintiffs to the company. 7. On 30.01.2006 the plaintiffs addressed a Demand Notice inter alia to the defendant and the company calling upon them to make payment of their outstanding dues under the facility and invoked the Guarantee given by the defendant. 8. On 10.03.2006, the said Notice was replied by Company's Advocate informing the company that the company had initiated a dialogue with its consortium lenders headed by Canara Bank for a restructuring and/o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the relevant Bills of Exchange or Promissory Notes towards the outstanding principal amount and interest and other monies and such other costs, charges and expenses which may become due and payable at any point in time, even if the Borrower in any way refuses, defaults, denies, disputes or fails to pay/reimburse the due amounts to the Guarantor or to IL FS or otherwise. (3) This Guarantee shall be subject to the following general conditions: (i) The Guarantor's obligation to pay is to arise first when notice in writing is given by IL FS and/or its successors, agents, trustees, nominees or assigns requiring the Guarantor to make payment hereunder and after such notice is given by IL FS, IL FS may if necessary proceeding to enforce the Guarantor's obligations and liabilities hereunder without first proceeding against and resorting to all or any of IL FS's remedies against the Borrower. (ii) The Guarantor hereby confirms and declares that notwithstanding anything between the Borrower and the Guarantor, the Guarantor shall be considered as surety only for the Borrower, yet as between IL FS and the Guarantor, the Guarantor be considered as principal debtor to IL FS to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores (towards the suit claim) are payable to the plaintiff. The aggregate of these two amounts being Rs. 10,51,86,591 is admitted as outstanding and payable to the plaintiff. It is further stated that the said amount is secured by ... personal guarantees of directors . These accounts have been duly signed by the defendant. These admissions have been repeated in the subsequent Balance Sheets for the years 1005-06, 2006-07, 2007-08. 15 In light of the persistent defaults, the plaintiff by letter dated 30th January, 2006 invoked the guarantee and called upon the defendant to pay the outstanding amounts. The Company responded by a letter dated 10th March, 2006 wherein it did not dispute its liability and merely requested the plaintiff not to initiate action since it was trying to restructure its debts. The plaintiff therefore did not precipitate matters. The Company however made no payment whatsoever. 16. Admittedly, the defendant has not disputed the lending to the company and the execution of the Guarantee document. The dues of the Company to the plaintiff are admitted and acknowledged from time to time including in the correspondence and annual account of the company. It is also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the defendant. He also conversant with the facts of the case from the papers and documents available with the plaintiffs. Even otherwise, they have filed an additional affidavit dated 6th November, 2009 and thereby even removed the technical objection, so raised with regard to the authorization. The Apex Court has observed in United Bank of India v. Naresh Kumar and Ors. AIR 1997 S.C. 3, that such a technical reason as a plaint is not signed by competent person which does not go to the root of the matter and even if any, such defects are curable basically in a suit filed by a bank for recovery of the amount from the borrower, as well as, the guarantors. 21. The submission with regard to the Bombay Stamp Act, has also no force. The suit is based on the guarantee. There is no serious dispute about the guarantee and its terms. The lending of money is not in dispute. In view of article 5(h) of Schedule I of the Bombay Stamp Act, when the document was executed, it was adequately stamped Exhibit A1 is on stamp paper of Rs. 50 and Exhibit A2 is on stamp paper of Rs. 20/. The Apex Court has held that a stamp Act is enacted to secure revenue to the State at certain classes of instrumen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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