2001 (1) TMI 998

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....tate Textile Corporation Limited (respondent No. 3) under the Industries (Development and Regulation) Act, advanced some money to the said respondent No. 4. In respect of the advance so made, respondents Nos. 1, 2 and 3 executed deeds of guarantee undertaking to pay the amount due to the bank as guarantors in the event of the principal borrower being unable to pay the same. 2. Subsequently, res....

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....Act and in our opinion the decision of the courts below is not correct. Section 5 of the said Act provides for the owner to be liable for certain prior liabilities and Section 29 states that the said Act will have an overriding effect over all other enactments. This Act only deals with the liabilities of a company which is nationalised and there is no provision therein which in any way affects the....

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....ppellant to recover money from respondents Nos. 1, 2 and 3 who stood guarantors arises out of the terms of the deeds of guarantee which are not in any way superseded or brought to a naught merely because the appellant may not be able to recover money from the principal-borrower. It may here be added that even as a result of the Nationalisation Act the liability of the principal-borrower does not c....