CENTRAL BANK OF INDIA Vs. RAJ REXINE PVT LTD
DEBTS RECOVERY APPELLATE TRIBUNAL
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(1.) THE Central Bank of India is in appeal against the order dated 1.5.2006 passed by the Tribunal below whereby it has been ordered that the O.A. insofar as it pertains to defendant No. 2 as LR only and defendant Nos. 3 and 5 is not maintainable. THE same has been dismissed against these defendants. It has, however, been allowed to go ahead as against other defendants in their capacity as borrower/guarantor(s) but not as LRs.
(2.) The facts are that the appellant Bank has filed the O.A. in question before the Tribunal below for the recovery of certain amount against the respondents. The defendant No. 1/respondent No. 1 is M/s. Raj Rexine (Pvt.) Ltd. Mr. Vijay Kumar Manchanda, respondent No. 2/defendant No. 2 along with Mr. Des Raj Manchanda (the then Director of the Company) signed and executed joint form of guarantee dated 20.10.1997. Mrs. Shashi Manchanda, respondent No. 4/defendant No. 4 also signed and executed form of guarantee dated 20.10.1997. Late Mr. Des Raj Manchanda further created equitable mortgage on his own immovable property described in the O.A. as collateral security. The defendant No. 4/respondent No. 4 Mrs. Shashi Manchanda also created an equitable mortgage on her immovable property as collateral security. Default having been committed, the O.A. came to be filed. It may be stated here for the sake of clarity that Mrs. Krishna Kumar Manchanda, respondent No. 5/defendant No. 5 is the wife of late Mr. Des Raj Manchanda, guarantor and mortgagor.
An IA No. 347/2003 was moved by the defendants under Order 7 Rule 11 read with Section 151, CPC seeking rejection of the O.A. qua defendant No. 2 Mr. Vijay Kumar Manchanda insofar as he was impleaded in the capacity of LR only and relating to Mr. Vinay Kumar Manchanda, respondent No. 3/defendant No. 3 k and Mrs. Krishna Kumari Manchanda, respondent No. 5/defendant No. 5. The impugned order, really speaking, is based on this IA. The contention from the side of the defendants was that the Bank had concealed material facts and information. The defendant No. 2 Mr. Vijay Kumar Manchanda had been arrayed as one of the defendants in the O.A., but was also impleaded as one of the LRs of late Mr. Des Raj Manchanda who had expired much before the filing of the O.A. Similarly, Mr. Vinay Kumar Manchanda and Mrs. Krishna Kumari Manchanda, defendant Nos. 3 and 5 respectively had been joined as LRs of deceased Mr. Des Raj Manchanda. Their contention was that earlier to the death of Mr. Des Raj Manchanda, the Bank had got executed security documents from the defendant No. 1 company on 20.10.1997 and the alleged credit limit had been secured by the third party guarantee bonds executed by Mr. Vijay Manchanda (who is defendant No. 2), Mrs. Shashi Manchanda (defendant No. 4) and late Mr. Des Raj Manchanda.
(3.) THE third party guarantee of late Mr. Des Raj Manchanda stood automatically released upon the renewal of credit limits by the Bank after the death of late Mr. Des Raj Manchanda because the Bank had got defendant Nos. 1, 2 and 4 to execute fresh 1 set of security documents on 1.8.2000 in their alleged personal capacity. After execution of fresh security documents by the defendant No. 1 company with fresh guarantee deeds of defendant Nos. 2 and 4, the earlier guarantee of deceased Mr. Des Raj Manchanda automatically stood released in terms of Section 62 of the Contract Act. Different set of persons came in and no liability could be fastened on Mr. Vijay Kumar Manchanda, defendant No. 2 in his capacity as LR of late Mr. Des Raj Manchanda and on Mr. Vinay Kumar Manchanda and Mrs. Krishna Kumari Manchanda, defendant Nos. 3 and 5 respectively who were impleaded only in their capacity as being the LRs of late Mr. Des Raj Manchanda.;
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