G VIJAYA KUMAR Vs. LORD KRISHNA BANK LTD
LAWS(DR)-2003-1-14
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on January 20,2003

Appellant
VERSUS
Respondents

JUDGEMENT

Ashok C.Parkash, - (1.)THE petitioner (defendant 6 Mr. G. Vijaya Kumar) has filed Petition dated October, 2002, praying therein to exonerate him from the Original Application, now (T.A. No. 339/2002). THE deponent has solemnly affirmed in his Affidavit that O.A. has been filed by the respondent herein in respect of Credit facilities given to "K.G. Arts Centre (Pvt.) Ltd." He has further submitted that he is neither a Principal Borrower nor Guarantor in respect of Credit facility availed by K.G. Arts Centre (P.) Ltd. and the respondent has also not alleged the manner, fastening him to the liability due. THEre is no privity of contract between the parties and the petitioner and the petitioner is also not having any stake whatsoever in the Company; after resigning from the Company as a Director. It has been further contended by him, that impleading the applicant herein, is grossly erroneous and without any basis whatsoever. On account of erroneous impleading of the applicant, he is feeling enormous difficulty in the matter of dealing with various, other Banks, due to the on going litigation, in which the petitioner has no interest at all. He has further reiterated, that in the absence of any financial obligation on the part of the applicant in settling the suit claim, it is just and fair that the applicant is exonerated from the Original Application. THErefore, the continuance of proceedings against the applicant, when there can be no decree passed against the applicant will be grossly unfair to the applicant and would cause irreparable prejudice to the applicant.
(2.)In the Counter Affidavit filed by the respondent Bank, it is submitted that the defendant 6 who acted for the company in the capacity as Director had obtained loan from the respondent Bank. He had orally given a guarantee to the respondent Bank for due repayment of the loan amount. Further company is normally represented by its director in the matter concerning any dispute or any problem with regard to the Company. The respondent has further solemnly affirmed vide Counter Affidavit that the persons who are responsible for the affairs of the Company are very much liable for the repayment of the Companies loan amount also. It has been further submitted by the Bank, that they are not aware that the 6th defendant/petitioner has transferred his share holding in the Board and also resigned his directorship from the Company. In the end, the respondent Bank has prayed for dismissing the Petition with exemplary costs.
The Point for consideration, is as to : Whether the LA. should be allowed and defendant No. 6, should be exonerated?

(3.)HEARD, learned Counsels for the parties and perused the record with their help. Learned Counsel for the petitioner has invited my attention towards Para 1 at Page 7 of the O.A., which runs as under:
"The First defendant is the principal borrower and defendants 2 and 7 are the directors and defendant 2 and defendant 3 had also extended their personal guarantee. Defendant 1 had mortgaged their property in favour of applicant as a security for the limit availed. The defendants 2 and 3 are personally and jointly and severally liable and responsible to the applicant for due and proper repayment."



Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.