Winding-up appeal route upheld; appropriation does not release guarantors, who remain liable for instalment and bank-rate interest.

Appeals from suits transferred to or tried during winding up proceed via the Companies Act appellate mechanism, with section 483 read with section 446 governing maintainability. A bank's appropriation, lien or amalgamation of customer accounts, without contractual variation of the original guarantee or surety's consent, does not discharge a guarantor who did not guarantee subsequent accounts; the original guarantee remains enforceable except for proper adjustments. Guarantors are liable for the unpaid seventh instalment and for interest at the agreed bank rate, subject to accounting for deposits and sale proceeds at final decree.

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Issues: (i) Whether appeals arising from suits and proceedings transferred to or tried by the court in winding up proceedings are maintainable as company appeals under section 483 read with section 446 of the Companies Act; (ii) Whether appropriation or debit of instalments under a deferred payment guarantee by debiting or amalgamating other cash credit accounts extinguishes the guarantors' liability who did not guarantee those subsequent accounts; (iii) Whether guarantors are liable for the unpaid seventh instalment and for interest at bank rate as claimed by the bank.

Issue (i): Whether appeals from orders/decisions in suits connected with winding up proceedings are maintainable as company appeals under section 483 of the Companies Act and in view of section 446.

Analysis: Section 446 restricts prosecution of suits against a company after winding up order and enables transfer and disposal of such suits by the winding up court; section 483 prescribes the appellate route for decisions in winding up matters to the same court in the manner applicable to its ordinary jurisdiction. The transferred suit and the suit tried while winding up proceedings were pending fall within these provisions and attract the appellate mechanism provided by the Companies Act.

Conclusion: Appeals are maintainable under section 483 of the Companies Act read with section 446.

Issue (ii): Whether debiting or appropriating instalments of the deferred payment guarantee in other cash credit accounts or amalgamating accounts operated to discharge guarantors who had not guaranteed those subsequent accounts.

Analysis: A bank possesses rights of lien, appropriation and to combine or amalgamate customer accounts subject to contract terms. Appropriation by debiting another account does not, without more, effect a release of a guarantor who did not consent to variation or who did not stand guarantee for the subsequent account. Material alteration of the original guarantee or contract without the surety's consent discharges the surety; mere exercise of appropriation or creation of additional guarantees for other accounts does not, by itself, extinguish the original guarantee when no contractual variation of the original guarantee is shown.

Conclusion: Appropriation or amalgamation entries do not extinguish the liability of guarantors who did not guarantee subsequent cash credit accounts; such guarantors remain liable under the original guarantee except to the extent of adjustments properly credited to them.

Issue (iii): Whether guarantors are liable for the unpaid seventh instalment and whether interest at bank rate is recoverable.

Analysis: The seventh instalment was unpaid and was not appropriated from any company account; pleadings and relevant provisions (including Order 7, Rule 7 CPC principles on construing the plaint) support entitlement to decree for the unpaid instalment. The agreements provided for interest at the bank rate; statutory power under section 21(2)(e) of the Banking Regulation Act permits regulation of rates and supports recovery of interest at the bank rate where agreed. Adjustments such as sale proceeds of assets must be accounted for at final decree stage.

Conclusion: Guarantors are liable for the unpaid seventh instalment and interest at the bank rate; adjustments (deposit and sale proceeds) are to be applied when the final decree is drawn.

Final Conclusion: The appeals are partly allowed and partly dismissed as to different appellants: maintainability under the Companies Act is affirmed; appropriation/amalgamation does not discharge guarantors who did not guarantee subsequent accounts; specific monetary liabilities (including the seventh instalment and interest at bank rate) are upheld subject to adjustment of deposits and sale proceeds at final decree.

Ratio Decidendi: Where a company is being wound up, suits transferred to or tried by the winding up court are appealable under the Companies Act; a bank's appropriation or combination of accounts does not, by itself, discharge an original guarantor who has not consented to any material variation or who did not guarantee subsequent accounts, and a guarantor remains liable under the original guarantee unless a material alteration releasing the surety is established.

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