- (1.) Special leave granted.
(2.) This appeal by special leave has been preferred against the judgment dated 10th July, 1990 of the Bombay High Court in Appeal No. 423 of 1987 : 1990(3) Bom.C.R. 1 : 1990 Bank J. 508 respondent no. 1 is a private limited company whereas respondents 2 to 4 are its Directors. Respondent No. 1, for setting up a factory, sought financial assistance from the appellant and the appellant sanctioned a loan of Rupees thirty lakhs. In order to secure the loan respondent No. 1 executed a deed of mortgage of certain properties on 29th June, 1979 and respondents 2 to 4 on the same date by executing a deed of guarantee stood surety for repayment of the said loan. It was a case of personal guarantee only as no property was given in security. For the sake of brevity the appellant, respondent No. 1 and respondents 2 to 4 shall hereinafter be referred to as the Corporation, the Company and the sureties respectively. The amount of loan was to be advanced in phases and after the Corporation had advanced a part of the total sanctioned loan, the Company did not want to avail of the balance of the amount as it seems to have lost interest in setting up the factory for reasons with which we are not concerned. The Corporation consequently called upon the Company to repay the amount already advanced together with interest and on its failure to do so took possession under section 29 of the State Financial Corporations Act, 1951 (for short the Act) over the Industrial concern, a term defined under section 2(c) of the Act and took steps to realise its outstanding dues by transfer of property in the manner provided therein. However, notwithstanding advertisements for sale thereof having been made on several occasions the Corporation could not an get offer of more than about Rupees five lakhs.
(3.) Having failed to recover the amount due to it in the manner stated above, the Corporation proceeded to recover the same from the sureties whose liability was co-extensive and for this purpose it filed a petition in the High Court under sections 31 and 32 of the Act arraying the Company as respondent No. 1 and the sureties as respondents 2 to 4, with the prayer that "the respondents be jointly and severally ordered and decreed to pay to the petitioners the sum of Rs. 15,87,391.20 as per particulars hereto annexed and marked Ex. H with further interest at the rates of 14-% per annum till payment and may further "be ordered to pay to the petitioners costs of the petition". Thus, according the relief claimed in the petition the liability of the respondents with regard to the amount payable to the Corporation on the date of making of the petition was for a sum which was more than Rupees fifty thousand which, as will be presently shown, represents maximum amount over which the Bombay City Civil Court has pecuniary jurisdiction.;