Hemant Gupta, J. - (1.) THE challenge in the writ petition is to a show cause notice dated 7.10.2008 (Annexure P.1) served upon the petitioner to pay a sum of Rs.83,58,671/ -under Section 32(G) of the State Financial Corporation Act, 1951 (for short 'the SFC Act'). The challenge is on the basis that once the principal debtor has settled its loan account with the Corporation, the petitioner, who is a guarantor, cannot be made liable to pay any amount over and above the amount paid by the principal debtor. It is the case of the petitioner that the liability of the guarantor is co -extensive with that of the principal debtor and not exceeding the liability of the principal debtor. Once the Corporation has settled its loan account with the principal debtor, the guarantor cannot be saddled with any additional liability.
(2.) THE facts leading to the issuance of the said show cause notice are that the petitioner is a Promoter Director of M/s Dabriwala Steels and Engineering Company Ltd. The aforesaid Company had set up a mini steel plant at Faridabad. The Company was owner of two plots i.e. Plot No. 136, Sector 24, Faridabad and Plot No.142, Sector 24, Faridabad. The company stopped its production on 27.4.1985 due to financial constraints. The Company invoked the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short 'the SICA'). The Board for Industrial and Financial Reconstruction (for short 'the BIFR'), constituted under the aforesaid Act, recommended the winding up of the Company on 25.5.1993. The appeal against such recommendation of the BIFR was dismissed by the Appellate Authority Industrial & Financial Reconstruction (for short 'the AAIFR') on 6.12.1994. The challenge to the aforesaid order before the Delhi High Court remained unsuccessful when the writ petition was dismissed on 16.12.1996. On the recommendation of the BIFR, this Court passed an order of winding up on 24.2.1995 in CP No. 31 of 1995. The Official Liquidator attached to this Court was directed to take into his custody or control all the properties and effects and all papers and books of the Company. The Haryana Financial Corporation (for short 'the Corporation') sought permission of this Court to sell the land, building, fixtures, plants and machinery of the Company situated at Plot No 136, Sector 24, Faridabad as a secured creditor having first charge over the said plot, which was allowed on 21.7.1995. The State Bank of India was holding second charge against the said property. In pursuance of such permission, all movable and immovable assets lying at Plot No.136, Sector 24, Faridabad was sold with the sale being affirmed by this Court on 17.9.2004 for the total sum of Rs.4.10 crores.
(3.) THE State Bank of India sought sale of plot No. 142, Sector 24, Faridabad, mortgaged to it to realize its dues. This Court permitted the Official Liquidator to sell plot No. 142, Sector 24, Faridabad in association with the secured creditors vide order dated 9.2.2006.;