- (1.) In this writ petition, an interesting question of application of limitation to recovery proceedings has been raised, which is of wider public implication.
(2.) Brief facts, giving rise to present case, are that M/s Rainbow Steel Limited (hereinafter referred to as "Company") is a Company incorporated and registered under provisions of Companies Act, 1956 (hereinafter after referred to as "Act, 1956") and petitioners are Directors of aforesaid Company. On 06.08.1990, Company sought financial assistance from Pradeshiya Industrial and Investment Corporation of U.P. Limited (respondent 1) (hereinafter referred to as "PICUP") under Equipment Refinance Scheme initiated by Industrial Development Bank of India (hereinafter referred to as "IDBI") for installation of 15 tons continuous casting machine for the plant used in manufacturing of Ingots/Billots. PICUP sanctioned a loan of Rs. 80.60 lacs on 22.08.1990 under aforesaid Scheme. The bond of guarantee was executed on 29.11.1990 between PICUP and petitioners wherein guarantors agreed for repayment of loan in case of default by Borrower, i.e., Company.
(3.) The agreement stipulates that on demand, guarantors shall pay to PICUP, whole of such principal sum and/or interest and/ or other moneys which may be due to PICUP and will indemnify all loss of principal sum/interest or other moneys secured by mortgage and all costs, charges and expenses whatsoever which PICUP may incur by reason of any default on the part of Company.;