Full Text
HIGH COURT OF DELHI
Date of Decision: 05.08.2013 W.P.(C) 621/20t0 and CM No.1315/2010 and L212512012
USHA RANI & ANR. ..... Petitioners
Through:Mr. G. C.Nagar, Advocate
' Through:Mr.Rajesh Mahajan, Advocate for R'1'
'- Ms.Isha Khanna ancl Ms.Nidhi Raman, Advocates
_ for.resPondents No.2 and 3.
JUDGMENT
'Ihe respondent No.l Dclhi Financial Corporation sanctioned a loan of
Rs.14,58,000/- to respondent No.2 Shyam Lal for purchase of a CNG bus. A
Term Loan Agreement-cum-I-Iypothecation Deed was executed in favour of respondent No.l. The petitioners had stood as guarantors for the loan taken by respondent No.2 from respondent No.1. Since respondent No.2 defaulted in paymenr of the loan taken from respondent No.l, the bus which was purchased from the funds provided by respondent N0.1, lvas seized by respondent No.1 and rr.P.(c) 621/2010 I>age I of5 v
2013:DHC:7219 P /1 r{ was sold for recovery of its dues. The respondent No.1 filed an application und{nJ
Section 32(G) of State Financial Corporations Act for issuance of recovery certificate against the petitioners as well the principal borrower for recovery of
Rs.1720507f along with pendent lite and future interest in terms of Loan
Agreement-cum-Hypothccation Deed executed by them in favour of respondent
No.1 on 9.9.2002. The authority under Section 32(G) of the aforesaid Act, after issuing notice to the petitioners and considering their reply dated 2.1.2008, inter alia, passed the following order:-
,,I find merit in the contention of Applicant "Cotporation and I am of the view that it would be just and proper to issue the recovery certificate in the light of the facts and circumstances of this case. After going through the records of this case and hearing the arguments of the Applicant Corporation, I am satisfied that a sum of Rs.17,20,507/-(Rupees seventeen lakh lwenty thousand five hundred seven only) exclusive of interest w.e.f. 01.03.07 in terms of Term Loan
Agreement/I{ypothecation decd executed by the Respondent in favour of Corporation on 09.09.02 is recoverable from the
Respondents. Issue Recovery Cerlificate. The' recovery certificate issued shall form apartof this order."
The petitioners approached this court by way of wP(c)
No.1091312009 for cluashing the aforesaid order dated 10.6.2009. Vide order dated 17.8.2009, the aforesaid petition rvas dismissed as withdrawn, with liberty to the petitioners to approach the appropriate authority against the order dated 10.6.2009. Vide subsequent order dated 13.11.2009, the ty.P.(c) 621/2010
F
(8 competent authority reiterated the order dated 10.6.2009 passed by him. The 7 respondent No.1 has initiatcd proceedings for recovery of the balance amount payable to it, from the petitioners they being guarantors of the loan taken by respondent No.2. Being aggrieved the petitioners are before this
Court seeking the following reliefs:- "(a) Quash and sct aside the order dated 13.11.2010
' passed by the Competent Authority, (b) Direct the respondent to pay litigation cost to the petitioner."
2. The petitioners do not dispute that they had stood as guarantors for the loan taken by rcspondent No.2 from respondent No.1. The grievance of the petitioners, as articulated by their counsel is that respondent No.l is not taking steps for recovering the balance amount from respondent No.2. He further submits that a cheque of Rs.50,000/- was issued by respondent No.2 to respondent No.1 towards payment of the loan taken by him and the'said cheque, when presented to the bank, got dishonoured but despite that, proceedings under Section 138 of the Negotiable Instruments Act were not initiated against him. The learned counsel for the petitioner states that another bus belonging to respondent No.2 was also seized by respondent No.1 and was sold tolvards recovery of its dues. The learned counsel for the petitioner submits that this was done only when the matter was brought to v.P.(c) 621/2010
I. the notice of this Court. This, to my mind, would make no difference sincd / it only shows that respondent No.1 does not hesitate in recovering the amount due to it from respondent No.2, he being the principal borrower. The question involved in this writ petition is as to whether the respondent No.1 can simultaneously recover the amount due to it from the petitioners or not. Since the petitioners had admittedly stood as guarantors for the loan taken by respondent No.2, the liabihry of the guarantors being co-extensive and the liability of the principal borrower and the guarantors being joint as t well as several, it is open to respondentNo.l to recover its dues either liom the petitioners or from respondent No.2 or from all of them.
3. The legal position with respect to obligation of a guarantor to pay the amount guaranteed by him to the lender was upheld by the Apex Court in Industrial Investment Bank of India Ltd. v. Biswanotlt Jhunihanwsla JT 2009 (10) SC 53-l where the Apex Court, after considering its earlier decision on the subject, inter alia,held as under:-
tr/.P.(c) 621/2010 Page 4 of[5] 227 ofthe Constitution of India was not justified to stay further proceedings in O.A. 156 of 1997."
4. Since the liability of the petitioners is co-extensive and not in the alternative, no infirmity was committed by respondent No.l in seeking to recover the balance amount due to it, from the petitioners. The writ petition is devoid of any merits and is, v.K. JAIN, J AUGUST 05, 20L3/ts t, ' t-- -n. '-.t