TaxTMI 
TaxTMI 
2015 (7) TMI 1418
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....ue had been filed on behalf of the company as well as two of the Directors of the Company against whom the plaintiff was seeking for personal decrees. The Court has granted conditional leave to defend with direction to the defendants to furnish bank guarantees for the amounts claimed in suit. The challeng to the orders is on a plea that the order is a non-speaking one merely adverting to the plea raised on behalf of the plaintiff that the leave to defend might be granted subject to furnishing bank guarantees. Learned counsel appearing on behalf of the defendant company in CR No. 3803 of 2013 would contend that the liability which is sought to be enforced against the company is a company which was proceeded against under the SARFAESI Act by secured creditor for enforcement of security and exercising all the rights available under Section 13, the unit of the company was sold and purchased by a 3rd party. According to him, the 3rd party has undertaken to discharge all the debts of the defendant company in an agreement entered into with the secured creditor. Consequently, the impleadment of the purchaser would be essential to shoulder the liability which is sought to be fastened aga....
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....y is not merely of the defendant but of an yet another person such as the auction purchaser who according to the defendant company has undertaken to discharge all the liabilities of the company, the plaintiff may elect to sue only one of the joint obligants. I have gone through the terms of the agreement of the 3rd party with the secured creditor and it is far-fetched to contend that this document contains an undertaking to discharge the simple money claims which the company might have against it. The recital reads in Clause 2.8 as follows: "The unit may have certain outstanding liabilities which are to be met by the purchaser and which will be over and above the purchase consideration. The prospective purchaser may carry out due-diligence in respect of likely liabilities pertaining to the unit before submitting the tender. It may be noted that the purchaser will be responsible for meeting these liabilities, if arise, and Secured Creditors will not be liable to meet any such liabilities whatsoever." It allows for a prospective purchaser to carry out due diligence for making enquiries about the outstanding liabilities over and above the purchase consideration. This Claus....
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....provision. The Section will be attracted to allow for the excess proceeds for the benefit of persons who may have an interest in the estate purchased. In this case, the security is reported to be for an amount in excess of 40 crores and the auction sale is satisfied only for a portion of the claim to an extent of Rs. 10 crores and odd. There is no surplus proceeds available to be offered as security for protection of any other creditor. It is hardly necessary for a judgment debtor to cry wolf or turn maudlin for sake of a creditor who does not want any such benefit seemingly offered by a defendant for impleadment that another person shall shoulder the liability. The impleadment here will not help enforcement of the debt easily for the creditor, but, on the other hand the creditor will himself shoulder an unnecessary burden of a defence brought by a 3rd party who will have every right to contend that a money claim cannot be enforced against him. The petition declining to implead the auction purchaser was therefore perfectly justified and I would find no cause for intervention. As regards the directions given by the Court below for securing the bank guarantees for the benefit o....
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....d would not find compelled to reproduce the same except to affirm that if there is even a triable issue that he is a bona fide defence, such a defendant shall be entitled to a unconditional leave to defend. Defendant Nos. 2 and 3, I certainly believe have a legal defense to contend for that they are not personally liable on the cheques issued on behalf of the company. The extent of liability of one of them under the agreement, a copy of which is filed before this Court, will still be a matter of adjudication at the trial. The leave granted ought to be unconditional to them and I therefore set aside the order passed against defendant Nos. 2 and 3 and allow the CR Nos. 3804 and 3805 of 2013. CR No. 3806 of 2013 is a plea for an unconditional leave to defend by the company. I have already referred to the fact that the trial Court had allowed for the leave to defend on a plea made by the counsel for the plaintiff that such leave could be granted subject to furnishing of bank guarantee. The Court almost took as if it was concession made and found no room for even discussing whether there was such a requirement of furnishing bank guarantee. The order impugned is laconic and cannot be sup....
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.... the entries of the specific amounts of Rs. 8 crores covered through the cheques. Without proof of several entries in the accounts, the liability under the cheques cannot be taken on its face value to allow for the plaintiff to walk away with the judgment without affording the defendant's right to defense. It is a further contention of the counsel for the petitioner that defendant has several claims against the plaintiff and there are debit notes issued by the plaintiff company admitting to its indebtedness for charges payable to the defendant for the works turned out and for value of the goods supplied by the defendant to the plaintiff. The defendant would refer to claim of over Rs. 75 lacs as still borne through records and was a subject of independent suit. When there were claims or counter-claims of mutual credits and debits, the Court must allow for the defense to be entered unconditionally. The counsel would let emphasis on the judgment which we already referred to in M/s Mechalec case (supra) and point out two important instances which the judgment expresses amongst the 5 clauses. Clause (a) refers to a situation where a Court finds that a defendant has a good defense, Claus....
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.... of institution. This is only to highlight that the liability which the law takes as strict and makes it criminal cannot be a liability that can be washed away by a company that operates on crores of rupees. This is again a company which has availed of large credit from a public sector financial institution and has burnt itself through a claim made under SARFAESI Act and lost a large unit of the company. I cannot therefore take any defense now taken regarding the untenability of the plaintiff's claim to have any value. If there is a modicum of defense in any way, it was probably to test the truth of debit notes which the plaintiff company itself appears to be issued in favour of the defendants. I have gone through the petition seeking for leave to defend drawn in an elaborate fashion. If there is a reference to claims by the defendants it is about a debit note for Rs. 45, 88,000/- and admitting to another debit claim of Rs. 55, 54,463/-. It would appear that the defendant filed a suit even before the institution of the present suit and before even filing an application for leave to defend in the Court at Dera Basi. It is admitted that the suit was dismissed although the petitioner ....