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of <h1>Court awards costs of Rs. 6,36,580 to plaintiff in guarantee deed case. Defendant liable for Rs. 60 lakhs + interest.</h1> <h3>Citibank N.A. Versus Juggilal Kamlapat Jute Mills Co. Ltd.</h3> The court found that the plaintiff, represented by a duly authorized person, had a valid cause of action for costs amounting to Rs. 6,36,580 against the ... - Issues Involved:1. Whether the plaint has been signed, verified, and the suit filed by a duly authorized person.2. Whether the plaint discloses any cause of action for the claim regarding costs amounting to Rs. 6,36,580.3. Whether the suit against the defendant as a surety is misconceived and not maintainable.4. Whether the defendant stands discharged from its liability as a surety due to the plaintiff's acts of omission and commission.5. Whether the court has jurisdiction to try the case.6. Whether the defendants are liable to pay the loan sanctioned in the name of J.K. Manufacturers Ltd.7. Effect of the sale of J.K. Manufacturers' properties by the receiver on the defendant's liability.8. Whether the plaintiff can claim the amount decreed by the Kanpur court in this suit.9. Whether the suit is barred due to the previous suit filed by the plaintiff against J.K. Manufacturers Ltd.10. Whether the amount decreed by the Kanpur court can be claimed in this suit.11. Whether the loan was sanctioned to both the defendant and J.K. Manufacturers.12. Effect on the maintainability of the suit if the loan was not sanctioned in favor of the defendant.13. Amount to which the plaintiff is entitled.14. Whether the defendant has no right to the benefit of the securities held by the plaintiff due to the agreements and guarantee executed.Detailed Analysis:Issue 1: Authorization to File SuitThe court found that Mr. N. M. Bahl, who signed and verified the plaint, was a duly constituted attorney of Citibank, N.A., authorized to file the suit. The power of attorney was authenticated by a notary public, and thus, under Section 85 of the Evidence Act, its due execution and authentication were presumed. The court held that Mr. Bahl was competent to sign and verify the plaint and file the suit.Issue 2: Cause of Action for CostsThe court held that the plaint disclosed a cause of action regarding the claim for costs amounting to Rs. 6,36,580. The guarantee deed executed by the defendant included the obligation to pay costs. Thus, the issue was decided against the defendant.Issue 3, 4, 7, 12, and 14: Maintainability and Discharge of SuretyThe court examined the deed of guarantee and found that the defendant's liability was that of a surety. The acts of the plaintiff, such as filing a suit in Kanpur and obtaining a consent decree, did not discharge the defendant's liability as a surety. The court also held that the sale of the plant and machinery did not impair the rights of the surety. The defendant had given consent to various acts under the guarantee deed, which included waiving rights under Sections 133, 135, and 141 of the Indian Contract Act. Therefore, the suit against the defendant as a surety was maintainable, and the defendant did not stand discharged from its liability.Issue 5: JurisdictionThe court held that it had jurisdiction to try the case as the loan was advanced and repayable in New Delhi. The defendant's contention regarding the jurisdiction based on the Kanpur suit was not accepted.Issue 6: Liability of DefendantsGiven the findings on issues 3, 4, 7, 12, and 14, the court did not delve into whether the relationship between the plaintiff and the defendant was that of a creditor and principal debtor.Issue 8, 10, and 13: Amount EntitledThe court found that the liability of the principal debtor, J.K. Manufacturers Ltd., was Rs. 77,10,733.67, including unpaid principal, interest, and costs. However, the liability of the defendant-surety under the deed of guarantee was limited to Rs. 60 lakhs. The court held that the plaintiff was entitled to recover Rs. 60 lakhs from the defendant with future interest at 12.5% per annum on Rs. 55 lakhs from the date of the suit till realization.Issue 9: Bar Due to Previous SuitThe court held that the suit was not barred by the previous suit filed against J.K. Manufacturers Ltd. in Kanpur. The earlier suit was based on the mortgage, and the present suit was based on the deed of guarantee, which constituted a different cause of action.Issue 11: Loan Sanctioned to Both PartiesThe court did not specifically address this issue as the findings on other issues rendered it unnecessary.Relief:The court decreed Rs. 60 lakhs in favor of the plaintiff with proportionate costs and future interest at 12.5% per annum on Rs. 55 lakhs from the date of the suit till realization.
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