M.Katju, J. - (1.) This writ petition has been filed for a writ of mandamus restraining the respondents from initiating any recovery proceeding against the petitioner for the alleged dues of the Company/Metro Rims India Private Limited, Industrial Area, G.T. Road, Ghaziabad.
(2.) Heard learned Counsels for the parties. The facts of the case are that there was a partnership firm named Metro Wheels India (hereinafter referred to as 'partnership firm') having three partners, Pawan Agarwal, Ashwani Kumar and Subhash Chandra Gupta. This partnership firm carried on the business of manufacture and sale of rims of cycle and rickshaw. The partnership firm took a sanction term loan of Rs. 17.75 lacs and Rs. 2.22 lacs for the purchase of generator. The petitioners stood sureties for the loan and also furnished an affidavit on 23.4.1988 in respect of the properties in this connection to the U.P. Financial Corporation, respondent No. 1.
(3.) The aforesaid partnership firm was dissolved, and with the permission of the respondent No. 1 a private limited company, namely, Metro Rims India Private Limited (hereinafter referred to as 'the Company') was constituted and registered on 1.12.1989 under the Companies Act. Thereafter the U.P. Financial Corporation entered into a fresh loan agreement with the Company on 2.7.1991, and also took a personal guarantee from the Directors of the Company. These Directors of the Company were the three partners of the erstwhile partnership firm. It is alleged, in paragraph 5 of the writ petition that since the partnership firm ceased to exist and a fresh loan agreement was entered into between the parties to which the Directors (not the petitioners) stood as guarantors, the petitioners in the capacity of the sureties of the loan of the partnership firm were automatically discharged.;