TaxTMI 
TaxTMI 
1979 (6) TMI 128
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.... recovering a sum of Rs. 2,80,268.34, which, according to the plaintiff, are recoverable as a special contribution from Anant Mills Ltd. under the Employees' State Insurance Act. Anant Mills Ltd. is a company under liquidation. Defendant No. 2 has been joined as a party to the suit because he is the guarantor. The official liquidator representing the company has not filed the written statement in the suit. Defendant No. 2 has filed his written statement and, inter alia, raised the contention that the trial court has no jurisdiction to entertain the suit. Issue No. 6 raised by the learned trial judge relates to the jurisdiction of the court to entertain and try the suit. It was tried by the learned trial judge as a preliminary issue. Relianc....
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....ave of the court and subject to such terms as the court may impose, a pending suit shall not be proceeded with against the company only. The guarantor of the company is not the company itself. They are two different and distinct legal persons. Therefore, merely because the official liquidator representing the company has been joined as a party to the suit, it cannot be said that the suit cannot proceed against the other defendant. To include a guarantor in the expression "the company" used in sub-section (1) of section 446 is to unduly widen its connotation and to introduce in the section what Parliament has not intended to introduce. Mr. S.B. Vakil who appears on behalf of the plaintiff has argued that the liability of the guarantor is ....
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....tion 128, Contract Act, is co-extensive with that of the principal debtor unless it is otherwise provided by the contract. Therefore, in each case the terms of the bond may have to be considered to find out whether the liability of the surety is not co-extensive with that of the principal debtor. In the case before the Supreme Court, the liability of the guarantor was co-extensive with that of the company. It was, therefore, held that the suit filed against the guarantor was not premature. In Jagannath Ganeshram Agarwala v. Shivnarayan Bhagirath [1941] 11 Comp. Cas. 11 ; AIR 1940 Bom. 247, it has been laid down by the High Court of Bombay that the liability of a guarantor or a surety may be coextensive or may be in the alternative. If th....
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....liability of the guarantor is in the alternative, that defence can be raised on merits by the guarantor. In any case, it does not bar the jurisdiction of the civil court to entertain the suit against the guarantor. Mr. Vakil has further argued that even if the company is statutorily discharged from the liability to pay the amount, the guarantee furnished by the guarantor is not necessarily discharged. I am not expressing any opinion on this aspect because it does not affect the jurisdiction of the court to proceed with the suit against the guarantor. If the guarantor thinks that the company has been statutorily discharged from the liability and that, therefore, he too is discharged from that liability, he may raise that contention in def....