VIJAYA BANK Vs. MURUDESHWAR FOODS AND EXPORTS LTD

JUDGEMENT

(1.) THE plaintiff Bank filed the original application (OA) for recovery of Rs. 7.45,24.159/-against the defendants. During the pendency of that OA, the 2nd defendant filed IA-14 praying the Tribunal to delete his name from the OA as he is not a necessary party and to dismiss that OA against him stating that the 2nd defendant is not personally liable and the alleged personal guarantee executed is not valid and enforceable and at his request the applicant Bank has relieved him of his personal guarantee obligation by virtue of letters dated 29.7.1995 and 20.11.1995 communications of the Bank expressly relieving him of his personal guarantee and so the 2nd defendant is not liable for the suit claim. THE applicant Bank filed objection stating that there was no communication made by the branch or any authority to relieve him of his personal guarantee and the 2nd defendant is also liable to pay that amount. This IA-14 was heard by the Presiding Officer, DRT, Bangalore, and he allowed that IA deleting the name of the 2nd defendant from the cause title of the application and dismissing the case against him. Aggrieved against that order the appellant-applicant Bank has come forward with this appeal.

(2.) The learned Counsel appearing for the appellant Bank submitted that the IA-14 was ordered to be considered by the PO, DRT, on merits along with the main OA but the Tribunal had taken that IA suo motu and has passed that order and further the Bank neither wrote any letter nor supplied any copies of the letter to the 2nd defendant relieving him of his personal guarantee and the PO, DRT has passed orders based on the internal communication sent from the regional office to the branch office and it has not been admitted by the Bank and with regard to the release of personal guarantee and the past liability of the 2nd defendant as a guarantor was never given up by the appellant Bank and there is no official communication produced by the 2nd defendant that the Bank has written any such letter to him either by giving up his liability or giving up his personal guarantee as required under Clause-12 of Guarantee Agreement and so the dismissal of the case as against 2nd defendant is unsustainable and the matter has to be heard elaborately by letting in oral as well as documentary evidence and how the release of 2nd defendant of his personal guarantee came into existence and how the resolution passed to that effect also came into existence have all to be proved by a detailed enquiry by letting in oral as well as documentary evidence and this IA ought not to have been decided merely on the letter correspondence between the Bank officers and so the order passed by the PO, DRT is vitiated and it has to be set aside and this IA has to be heard alongwith the main OA and order to be passed on merits.

(3.) ON a perusal of the records it is seen that on 19.1.2001, IA-14 originally was ordered to be considered alongwith merits but on 12.2.2002 this IA-14 was taken up separately and it was heard and order was passed on 19.3.2002. Counsel for the appellant Bank submitted that after having posted IA-14 to be heard on merits of 19.1.2001 that IA was taken up suo motu separately on 12.2.2002 and it was heard and order was passed. Counsel for the respondents submitted that nothing prevented the PO, DRT from taking up the IA separately and order being passed on that. IA-14 was taken up separately and PO, DRT has passed order on that IA. But from the submission made by the Counsel for the applicant Bank it has to be proved how the Bank released the personal guarantee of the 2nd defendant and the relevant documents for that have to be produced. Without conducting a detailed enquiry and letting in oral evidence in that aspect the order in the IA was passed. Of course, the PO, DRT is empowered to pass order separately in the IA. But all the relevant facts and materials have to be taken into consideration before passing order in that IA, When the applicant vehemently has contended and filed objections in that IA stating that there was no communication made by the branch or by any authority to release the 2nd defendant of the personal guarantee and the contention of the 2nd defendant that fresh documents were taken from the 1 st defendant and his liability were extinguished is incorrect, it is for the Tribunal to go in detail with regard to the contentions and with regard to the communication between the Banks and they have to be proved by letting in oral as well as documentary evidence and also with regard to the release of the personal guarantee. When such serious objection has been raised by the applicant Bank in the objections, the Tribunal ought to have considered that application on merit after detailed enquiry along with the main application.