GUJARAT STATE FINANCIAL CORPORATION Vs. NATIONAL RIFLES LIMITED
HIGH COURT OF GUJARAT
GUJARAT STATE FINANCIAL CORPORATION
NATIONAL RIFLES LIMITED
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(1.) . The Appellant-Corporation has filed suit being Special Civil Suit No. 64 of 1976 in the Court of Civil Judges (S.D.) Ahmedabad (Rural) at Narol for the recovery of the amount advanced to respondent No. 1-Company the repayment of which was guaranteed by respondent No. 2-Company. Respondent No. 3-Company was joined as a party-defendant since they also claimed interest as second mort- gagees of the suit properties of the respondent No. 1-Company.
(2.) . The reliefs claimed in the suit against respondent No. 1-Company were for a decree of the amount that may be found due from respon- dent No. 1-Company & for the sale the hypothecated and mortgaged properties of the said Company. As regards respondent No. 2-Company the plaintiff-Corporation prayed for the relief of a decree for the amount of money advanced and found due and payable as on the date of the suit the repayment of which was guaranteed by respondent No. 2 It appears that in the course of hearing of the suit an application was moved on behalf of respondent No. 1 and 2-Company that the suit abates against them in view of the provision contained in sec. 3(4) read with sec. 7(1) of the Gujarat Public Moneys (Recovery of Dues) Act 1979 (hereinafter referred to as the said Act ). It appears further that the Gujarat Industrial Investment Corporation-Resp. No. 3 herein had also filed a suit against respondents Nos. 1 and 2-Companies for recovery of their dues and for enforcement of their mortgage and it was numbered as Special Civil Suit No. 87 of 1976. Respondents Nos. 1 and 2-Companies which were arrayed as defendents Nos. 1 and 2 in Special Civil Suit No. 87 of 1976 raised the same contention that the said suit also abates in view of the provision contained in sec. 3(4) read with sec. 7(1) of the said Act. It should be noted that since the hearing of both the suits namely Special Civil Suits Nos. 64 by Gujarat State Financial Corporation and No. 87/86 by the Gujarat Industrial Investment Corporation was consolidated the two defendant-companies which were the principal debtor and guarantor raised this plea of the suits having been abated by a common application which is placed on the record of the trial Court at Exhibit 73. It is not necessary for the present purposes of this appeal to go into the precise nature of the reliefs claimed by the Gujarat Industrial Investment Corporation in their suit since we are concerned here only with the appeal filed by the Gujarat State Financial Corporation The learned Judge raised the question in paragraph 8 of his order whether having regard to the relevant provisions contained in secs. 3 4 and 7 of the said Act the two suits would abate and immediately replied in the negative though at the end of his order he held so far as material for our purposes as under in paragraph 11:
" The plaintiffs part of relief in Special Civil Suit No. 64/76 namely the relief to recover the suit claim from the defendant No. 1 and the relief to recover such claim by sale of the pledge properties are such reliefs to which the provisions of sec. 7 read with sec. 3 sub-sec. (4) of the said Act apply and because of that part of reliefs in Spl. Civil suit No. 64/76 can be said to have been abated but the whole suit will not abate and the bar of sec. 7 read with sec. 3 sub-sec. (4) of the said Act will not be applicable to remaining reliefs in the said suit No. 64/76 . " It is this order which is challenged in the present appeal.
(3.) . It is no doubt true that the entire order of the learned Judge does not make a coherent and happy reading but so far as the conclusion is concerned 1 do not think that any exception can be taken against it except to the extent that it has not been properly and clearly worded. The effect of the combined reading of secs. 3(4) 4 and 7(1) of the said Act is shortly stated that the money suits against principal debtors or any other persons referred to in sec. 3(1) will abate and the reliefs in the said suit against the guarantor and/or indemnifier or any person other than those referred to in sec. 3(1) shall not be affected. The learned Judge was therefore right in holding that the reliefs in the nature of money decree and mortgage decree claimed against respondent No. 1-Company shall abate but it shall not abate so far as the reliefs are claimed against respondent No. 2-Company.;
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