Appropriation of funds
suresh jakhotiya
(Querist) 10 January 2010
This query is : Resolved
Dear Sirs
A,B,C &D (4) persons guaranteed a CC limit against hypothication for 9.90 lacs in 1989.
D withdrew immediately within 10 months of signing the guarantee from company.
Bank then enhanced the limt to 18 lacs in 1992 with guarantee from A,B,C of the old and a new guarantor E. Admittedly D did not sign this .
Company went NPA shortly and Bank took hypothicated goods worth 12 lacs in possetion & filed suit against all GuarantorsA,B,C,D &E (5) guarantors for Rs 22 lacs with interest.Defendents included D ,the one who signed for 9.90 lacs.
Court held that D is responsible upto 9.90 lacs only.
12 lacs value of goods in possession of bank be appropriated for all the defenders and decree for 10 lacs (the balance) was passed against all (5)A,B,C,D & E saying that Balance after Set off is equal to the sum guranteed by D also
Sir, My question is whether any case law or Citation can support my thinking that while appropriating 12 Lacs,court should have satisfied the first limit of 9.90 lacs & then the balance against Enhanced limit. and D should have been deemed to have satisfied his Guarantee of 9.90 lacs.
Pl. provide some Case Laws /Citations & suggest How D should proceed as he can not go in appeal to DRAT for his inabilty to make a deposit.
Thanks & best Regards
Suresh
Raj Kumar Makkad
(Expert) 10 January 2010
I am agree with your point of view but the problem might have been before the court: how to bifurcate the balance amount to be charged?
Due to this practical problem, the decree has been passed against all 5 defendants including D and it seems there is no accurate citation supporting your point of view. Appeal was one of the provisions but your client is unable to file this.
suresh jakhotiya
(Querist) 10 January 2010
Mr. Makkad
Can D go to the same court under Sec 152 of CPC for arithmatic /ommission correction to get relief
Regards
Suresh
suresh jakhotiya
(Querist) 10 January 2010
Also ,why CLAYTON'S RULE
Indian Contract Act,1872
Sec 59/60/&61 can not be applied rather then misjustice to D due to court's practical problem.
In any case the JDs responsibilities or joint & several
Kindly do advise
suresh
