(Prayer: This Civil Suit has been filed under Order IV Rule 1 O.S. Rules read with Order VII Rule 1 CPC, praying for the following reliefs:
(a) directing the defendants jointly and severally to pay to the plaintiff a sum of Rs.33,80,000/- together with further interest at the rate of 23% per annum on the principal sum of Rs.20,00,000/- from the date of plaint till date of realisation; and
(b) directing the defendants jointly and severally to pay to the plaintiff the costs of this suit.)
The Plaint:-
The plaintiff, a public limited company, incorporated under Indian Companies Act, has filed the suit seeking a direction against the defendants jointly and severally to pay a sum of Rs.33,80,000/- together with further interest at the rate of 23% per annum on the principal sum of Rs.20,00,000/- from the date of plaint till date of realisation and for costs.
The plaintiff claimed that the first defendant, a limited company incorporated under the Indian Companies Act, had availed financial assistance for a sum of Rs.20,00,000/- by way of Hire Purchase Loan on 15.05.2002 against computer accessories to enable them to commence commercial operations. The loan was repayable in half-yearly installments commencing from 15.02.2003 together with interest at the rate of 23% p.a. The second, third and fourth defendants as Directors of the first defendant company personally guaranteed the repayment of the amounts due. The first defendant had changed the name of the company as International Process Outsourcing Limited without informing the plaintiff. The first defendant paid interest only upto September 2005. On 07.01.2006, the plaintiff wrote a letter demanding payment. The first defendant by reply dated 23.01.2006 acknowledged liability and sought permission to pay interest. The entire principal remained unpaid. Another letter dated 23.08.2006 was issued demanding payment. A reply was received from M/s. International Process Outsourcing Limited giving address as that of the first defendant and represented by Director Vivek Mehrotra dated 24.08.2006 stating that long term lease arrangements are being made and payment would be made immediately thereafter. By another letter dated 12.07.2006, the said M/s. International Process Outsourcing Limited sent a bank draft dated 08.07.2006 for Rs.41,237/- towards interest for December 2005. The plaintiff finally issued a lawyer's notice dated 25.04.2007 calling upon the defendants to make the payment. The third and fourth defendants sent a reply through their Advocate on 11.06.2007, in which they claimed that they had resigned from the first defendant company on 30.06.2005 after selling their share holdings and the first defendant had expressly agreed to relieve them from the personal undertaking given by them. The plaintiff sent a rejoinder dated 30.06.2007, and another notice dated 23.01.2008 demanding payment. It had been further stated that the borrowal was not denied and the execution of personal guarantees were also not denied.
It had been further stated that arrangements between the defendants would not affect the rights of the plaintiff to recover the amount due. Consequently, the suit for the reliefs as stated above had been filed before this Court.
The first and second defendants, though served with the suit summons did not appear before the Court and were set ex-parte.
Written Statement of third and fourth defendants:-
These defendants stated that the first defendant company was originally promoted by them and by the second defendant for the purpose of running Call Centre/BPO (Business Process Outsourcing) operations with initial authorised capital of Rs. 200 lakhs. They joined as Directors and invested Rs.86 Lakhs each. The first defendant entered into an agreement for borrowing Rs.20 lakhs for purchase of computers/computer accessories on 15.05.2002 against the pledge of computers/computer accessories. These defendants and the second defendant executed deeds of personal guarantee dated 15.05.2002 guaranteeing the repayment of Rs.20 lakhs borrowed by the first defendant. They claimed that consideration had not passed on that date. The name of the first defendant was changed to Supersight BPO Ltd., and then to M/s. International Process Outsourcing Limited. The Directors also changed and consequently they stated that the suit should be dismissed for non-joinder of necessary parties. They also claimed that the suit is barred by limitation since the personal guarantees executed by them had worked itself out. They further stated that on 17.06.2005, a sale agreement was executed between the first defendant and these defendants wherein the shares held by these defendants were purchased by Holford Investments having registered office in Cyprus. Under clause 4 of the said agreement, it was mentioned that on sale of the shares, these defendants resigned as Directors. Under Clause 5 the first defendant released these defendants from their respective personal guarantees. This agreement was brought to the notice of the plaintiff on 18.02.2006. The plaintiff did not take steps to incorporate the changes in the loan agreement or in the guarantees.
By letters dated 22.02.2006 and 04.11.2006, these defendants informed the plaintiff about the change in the constitution of the first defendant and the arrangement with another company named Office Tiger. The plaintiff then wrote a letter dated 17.01.2007 to Office Tiger asking them to pay the dues of the plaintiff. It had been stated that the plaintiff had suppressed the above facts in the plaint. These defendants issued a legal notice to the first defendant then called M/s. International Process Outsourcing Limited on 11.06.2007 directing them to pay the amounts to the plaintiff with copy marked to the plaintiff. These defendants claimed that since the guarantee agreements were signed on 15.05.2002 and since these defendants had resigned as Directors in June 2005, the suit having been filed after more than three years was consequently barred by law of limitation. It had been further stated that these defendants, without prejudice to their rights, had paid a sum of Rs. 12 lakhs on 14.10.2008 to release them from personal guarantee. The cheques have been encashed. This fact was also suppressed by the plaintiff. These defendants therefore claimed discharge from the suit claim. These defendants also denied all the allegations in the plaint and stated that though execution of the guarantees were not disputed, since they had resigned as Directors and were released from their liabilities by the first defendant and since they had also discharged their guarantees by making payment of Rs. 12 lakhs to the plaintiff, the suit as to be dismissed against them. These defendants also raised a counter claim against the first and second defendants for a sum of Rs. 12 lakhs and also paid necessary Court fees.
It is to be mentioned that under Order 8 Rule 6 CPC, the defendants can raise a counter claim only against the plaintiff and consequently at the time of accepting the written statement along with the counter claim was filed, this Court had expressed opinion that the counter claim raised by the defendants against the first and second defendants cannot be agitated in this suit.
On consideration of the pleadings, this Court had framed the following issues on 08.03.2011:-
1. Whether there is any contract between the plaintiff and M/s. International Process Outsourcing Limited?
2. Whether third and fourth defendants having resigned from the first defendant on 30.06.2005 and also having sold their share holding to the second defendant are still liable to the plaintiff under the Deed of Guarantee dated 15.05.2002?
3. Whether the deed of guarantee executed on 15.05.2002 is not barred by limitation?
4. Whether the suit is bad for non-joinder of necessary parties?
5. Whether the defendants are discharged from the guarantees in view of the take over of the first defendant by M/s. International Process Outsourcing Limited without their consent and knowledged?
6. Whether by virtue of Clause 5 of the Agreement of sale dated 17.06.2005 the third and fourth defendants are discharged from their personal guarantees?
7. Whether the claim of the third and fourth defendants against the first and second defendants jointly and severally can tantamount to discharge of the defendants?
8. Whether the plaintiffs having accepted a sum of Rs.12,00,000/- without demur are still liable to make the claim against third and fourth defendants?
9. Whether the suit is not liable to be dismissed as against the third and fourth defendants with costs?
10. To what other reliefs are the parties entitled to?
Trial:-
The parties were called upon to lead an evidence. The signatory to the plaint, Managing Director A.Namasivayam was examined as PW-1 and he also filed Exs. P-1 to P-12.
Ex. P-1 dated 15.05.2002 is Hire Purchase Agreement entered into by plaintiff and first defendant.
Ex. P-2 dated 15.05.2002 is Original Letters of Guarantee executed by the defendants 2 to 4 (series 3 Nos.).
Ex. P-3 dated 07.1.2006 is Letter written by plaintiff to defendants.
Ex. P-4 dated 23.01.2006 is reply letter sent by the first defendant to plaintiff.
Ex. P-5 dated 12.07.2006 is letter written by first defendant to plaintiff.
Ex. P-6 dated 23.08.2006 letter written by the plaintiff to first defendant.
Ex. P-7 dated 24.08.2006 is letter sent by the first defendant.
Ex. P-8 dated 25.4.2007 is Lawyers Notice issued on behalf of the plaintiff with original acknowledgements.
Ex. P-9 dated 11.6.2007 is reply notice received from defendants 3 and 4.
Ex. P-10 dated 30.6.2007 is rejoinder notice issued on behalf of the plaintiff to defendants 3 and 4.
Ex. P-11 dated 23.1.2008 is legal notice to defendants.
Ex. P12 dated 12.02.2007 is letter.
During cross examination of PW-1, the third and fourth defendants marked the letter issued by them dated 18.02.2006 as Ex.D-1. They also marked the letter dated 04.11.2006 issued by them to the plaintiff as Ex. D-2 and the letter issued by the plaintiff to Office Tiger Ltd., dated 17.01.2007 with copy marked to them as Ex.D3. They also marked their letter to the plaintiff to proceed against the first defendant dated 22.02.2006 as Ex.D4. They further marked the letter dated 14.10.2008 issued by them to the plaintiff as Ex.D5. The fourth defendant examined himself as DW-1 on his behalf and on behalf of the third defendant. He filed his proof affidavit and marked Ex. D-6, a sale agreement for sale of shares dated 17.06.2005 and Ex.D7 legal notice issued by fourth defendant to the plaintiff dated 11.06.2007, Ex.D-8 letter issued by the third and fourth defendants dated 12.02.2007 enclosing sale agreement (Ex.D6) dated 17.06.2005 and Ex.D9 letter dated 10.12.2008 for the plaintiff to the third defendant.
Issues Re-numbered:
In order to determine the issues between the plaintiff and the defendants, the issues are renumbered as follows:-
(1) Whether the defendants 3 and 4 having resigned from the first defendant on 30.06.2005 and also having sold their share holding to the second defendant are still liable to the plaintiff under the Deed of Guarantee dated 15.05.2002?;
(2) Whether the defendants are discharged from the guarantees in view of the take over of the first defendant by M/s. International Process Outsourcing Limited without their consent and knowledged?;
(3) Whether by virtue of Clause 5 of the Agreement of sale dated 17.06.2005 the third and fourth defendants are discharged from their personal guarantees?;
(4) Whether the plaintiffs having accepted a sum of Rs.12,00,000/- without demur are still liable to make the claim against third and fourth defendants?;
(5) Whether there is any contract between the plaintiff and M/s. International Process Outsourcing Limited?;
(6) Whether the suit is bad for non-joinder of necessary parties?;
(7) Whether the deed of guarantee executed on 15.05.2002 is not barred by limitation?;
(8) Whether the suit is not liable to be dismissed as against the third and fourth defendants with costs?; (9) Whether the claim of the third and fourth defendants against the first and second defendants jointly and severally can tantamount to discharge of the defendants?; and
(10) To what other reliefs are the parties entitled to?
Issue Nos. 1, 2 and 3:-
1. The plaintiff's company is a public limited company incorporated under the Indian Companies Act. The first defendant, Supersight Ceequence Technologies Ltd., is a limited company incorporated under the Indian Companies Act. The second , third and fourth defendants, were Directors of the first defendant's Company and as revealed in the written statement were promotees of the first defendant companies, which had as its object running a Call Centre / BPO operations with an initial authorised capital of Rs.200 lakhs. The third and fourth defendants claimed they had invested a sum of Rs.86 lakhs each towards their share in the paid up capital of the company.
2. The first defendant company had entered into an agreement for the purpose of borrowing a sum of Rs.20 lakhs from the plaintiff on Hire Purchase rent on 15.05.2002 against the pledge of computers and computer accessories. At that time, the first defendant had also executed the Hire Purchase Agreement. The said agreement had been marked as Ex.P-1 and had been executed between the plaintiff, called the owner and the first defendant called the hirer and the second, third and fourth defendants called the guarantors. Very unfortunately, there are blanks in the agreement which have not been filled up. It has been signed by the plaintiff and first and third defendants. It is a printed form. On the same day, the second, third and fourth defendants also executed personal guarantee agreements for a sum of Rs.27,20,000/- each. The execution of the Hire Purchase Agreement and the Personal Guarantee Agreements are not denied by the third and fourth defendants. It must be mentioned that the first defendant, apart from affixing their seal and signature in Ex.P-1 has not signed any other document presented before the Court. Similarly, the second defendant had also not signed any other document. In subsequent, correspondences the first defendant had been represented by its Director Vivek Mehrotra, who is not a party to this suit.
3. According to the plaintiff, the first defendant had not made regular payments and consequently, on 07.01.2006, after a period of more than 3= years, the first letter was written on behalf of the plaintiff stating that the account is highly irregular and consequently, the entire amount together with interest should be paid to the plaintiff. This letter has been marked as Ex.P-3. In reply to the same, a company, by name M/s. Supersight Ceequence / BPO represented by its Director Vivek Mehrotra had acknowledged receipt of the letter and stated that there were some severe financial crisis and that further, there has been acquisition of shares by Swift Mail and Ceequence Groups and there has been a change in the Board of the Company. It had been stated that Satz Moses and Ganesan had been brought into the Board and that the second defendant was no longer a Director of the company. It had been stated that the repayment would be made within a short time. This letter has been marked as Ex.P-4.
4. On 12.07.2006, yet another company, by name M/s. International Process Outsourcing Limited had issued a letter through its accounts department to the plaintiff enclosing a draft for Rs.41,237/- towards interest for the month of December 2005. There is no reference that this amount had been issued towards the loan borrowed by the first defendant company M/s. Supersight Ceequence Technologies Ltd. The plaintiff thereafter issued Ex. P-6, a letter addressed to Vivek Mehrotra, Director of the first defendant Company stating the loan availed on 15.05.2002 was outstanding. There was no mention as to payment of interest till September 2005. The plaintiff then produced another letter Ex.P-7 issued by M/s. International Process Outsourcing Limited, dated 24.08.2006 signed by the said Vivek Mehrotra that the account will be made regular.
5. It had been the consistent stand of the third and fourth defendants that they had resigned from the first defendant company and that they had also sold their share holdings and that thereafter there had been a change in the management of the first defendant company. Infact, the name of the first defendant company was also changed. The third and fourth defendants claimed that this has impliedly discharged them from the personal guarantees executed by them on behalf of the first defendant company since the first defendant company did not exist any longer.
6. The third and fourth defendants had intimated this fact to the plaintiff in reply to Ex.P3 letter dated 07.01.2006 issued by the plaintiff. Ex.P3 was the first letter produced before court, through which the plaintiff had raised a demand over the outstanding loan. In Ex. P3, the plaintiff had begun the letter as follows :
With reference to the above loan account availed by you on 15.05.2002, we have not received the principal amount. The advance is outstanding for more than 3.5 years. You are aware that the above A/c has been read as Non-Performing Assets and comes under the control of Reserve Bank of India...
7. From the above, it is clear that the first demand has been made after about three and half years from the date of advancement of the loan. Further, it is also evident that the account has been treated as Non-Performing Asset.
8. In reply to the above, the first defendant company did not send any reply. There was no company existing in the name of the first defendant company. On the other hand, another company, by name Supersight bpo Limited represented by its Director, Vivek Mehrotra sent a reply, Ex.P4, dated 23.01.2006. In the said letter, it had been stated :
...We wish to highlight that this is the first communication/letter which has been received from you on the captioned subject.. Further ..Subsequent to the acquisition of shares from Swift Mail and Ceequence groups, there has been a change in the board of the company. Mr. Satz Moses and Mr. Ganesan were inducted into the board. Further Mr. Utsav Seth is no longer a director of the company, hence he is not involved in any of the operations of the company...
9. It is thus evident that the plaintiff had been put on notice regarding the change in the name, constitution and board of the first defendant company.
10. It is significant to point out that the above communication was addressed to A Namaivayam, the Managing Director of the Plaintiff company, who was also the signatory to the plaint and also tendered evidence before this court on behalf of the plaintiff as PW1.
11. Further, the third and fourth defendants had also moved out of the first defendant company. Ex. D6 is the Sale Agreement for Sale of Shares, whereby, the individual shares held by the third and fourth defendants in the first defendant company had been sold to an entirely new entity, Holdford Investments Limited, a public limited company formed and registered in Cyprus and represented by one B. Nanban.
12. The following clauses relate to the continuing liability of the third and fourth defendants in the facilities availed by the first defendant company.
4. Upon sale of the said shares and full payment for shares, Swiftmail and Ceequence shall ensure that Rajesh Somasundaram and Ravi Patwari resign as directors of the Company..
5. Upon Completion of sale, the Company shall use its best endeavour's to ensure the release of Ravi Patwari and Rajesh Somasundaram from the personal guarantees given by them for the facilities availed by the Company from UCO Bank (IB Branch). The Company also agrees to relieve them from any personal undertakings given by them to STPI; Customs authorities in India and New Link Overseas Finance Limited.
13. The Learned Counsel for the third and fourth defendants was emphatic in his assertion that the above had indeed discharged his clients from the personal guarantees executed by them for repayment of loan availed by the first defendant from the plaintiff. On the other hand, Learned Counsel for the plaintiff, asserted that the internal arrangements were not known to the plaintiff company.
14. PW1, A. Namaivayam who was the signatory to the plaint and also the Managing Director of the Plaintiff company, stated as follows in his cross examination conducted on 16.08.2012 :
I am not aware of the change of the name of D1 company. I deny the suggestion that I am aware of the change of name of D1 company...I deny the suggestion that knowing fully well about the change of name of D1 company, I deliberately suppressed the fact.
15. However, when confronted again by the Learned Counsel for the third and fourth defendants on 8.10.2012, he stated as follows in his cross examination :
D3 and D4 have informed of their resignation to the plaintiffs from the Directorship of the 1st defendant company... Further, ..The plaintiffs are aware of the change of name of the first defendant company. It is correct to state that the plaintiffs are aware of the change of name prior to the filing of the suit. Inspite of the change of name the plaintiffs have proceeded to file this suit against first defendant without amending the cause title...
16. The plaintiff had caused an advocate's notice, Ex.P8, dated 25.4.2007 to be issued to the defendants herein and also to the wives of the third and fourth defendants. All of them were jointly and severally called upon to pay the amount due to the plaintiff.
17. The third and fourth defendants, through their counsel had replied to the above, by reply notice dated 11.6.2007, Ex. D7. In the said reply the counsel had clearly stated that the third and fourth defendants had resigned from the Company on 30.6.2005 after selling their share holding in the Company.
18. The plaintiff caused a rejoinder notice to be sent claiming that such resignation would not affect the liability of the third and fourth defendants.
19. The fact remains that the resignation of the third and fourth defendants was informed to the plaintiff company, infact to PW1, who was also the signatory to the plaint. There had been changes to the constitution of the first defendant company. Infact, there is no evidence tendered on behalf of the plaintiff that the first defendant company is still in existence as on date.
20. In (2012) 2 LW 256, K. Krishnamoorthy -vs- Investment Trust of India and others, Hon'ble Division Bench of the Madras High Court had held that a duty was cast on the Directors who resign from the company to inform the fact in writing. In this case, the third and fourth defendants had informed the plaintiff, infact the signatory to the plaint and PW1 that they had resigned as Directors of the company and thus their liabilities are discharged. It had been further held that
26. In a contract of guarantee, the surety is entitled to insist on rigid adherence to the terms of his obligation by the creditor and is liable only for such loss as arises directly from a breach of the terms of the contract actually guaranteed i.e., any arrangement between a creditor and his borrower inconsistent with the continuance of the surety, has the effect of cancellation such party's liability. Any variation in the terms of the contract or giving of time for the performance of it would have the effect of discharging the surety.
21. The plaintiff by their letter dated 10.12.2008 marked as Ex.D9 had stated as follows:-
We refer our letter dated 09.12.2009 regarding execution of agreement and advise that in your earlier letter itself you requested us to take legal action against M/s. Supersight Ceequences Technologies Ltd., for recovery of entire dues and return back your payment of Rs.12 lakhs.
As per advise from our lawyer, it is not necessary to execute the separate agreement since we have already acknowledged your letter.
22. In this case, it is seen that the third and fourth defendants have actually informed the plaintiff that they had resigned from the first defendant's company and also that the constitution of the first defendant company had been changed. The burden then shifted on to the plaintiff to obtain fresh agreements or undertakings from the newly constituted company to continue the loan advanced. In the absence of any such recognizable move made by the plaintiff, I hold that by resignation from the first defendant's company by the third and fourth defendants and more particularly, by sale of share holdings, the jural relationship between the third and fourth defendants with the first defendant's company had come to an end. Consequently, there cannot be held liability any further. Consequently, the issue Nos. 1, 2 and 3 are answered in favour of the third and fourth defendants. I hold that they are discharged from their personal guarantees.
Issue No. 4:
23. The third and fourth defendants having resigned from the first defendant's company have gone a step further by sending a letter dated 14.10.2008 and in the same, they have very specifically mentioned that there as eventually agreed they would give a total sum of Rs. 12 lakhs towards full release from all liabilities against the loan as ex-Directors of the first defendant's company. The entire letter is re-produced herewith:-
with reference to above loan and as eventually agreed that Ravi Patwari and Rajesh Somasundaram will give a total amount of Rs.12,00,000/- (Rupees Twelve Lacs only) as per details below to Newlink Overseas Finance Limited towards full release from all liabilities against above loan as ex-directors of M/s.Supersight Ceequence Technologies Limited and also from our personal liabilities/guarantees. Newlink Overseas will absolve us of all liabilities on this loan. No further amounts are payable by us on this loan account nor any consequential amounts. Ms.Radhika Somasundaram shall also stand cleared of her personal guarantee by this payment of Rs.12,00,000/-.
It is understood that Newlink would be persuing to recover the actual dues from the company and other guarantors and if it receives any amount, Newlink will refund us the following cheques are enclosed:
1. Cheque No. 218169 dated 13/10/2008 of IOB for Rs.6,00,000/- and
2. Cheque No. 402990 dated 14.10.2008 of HSBC for Rs.6,00,000/-.
24. It is thus seen that the third and fourth defendants had not only resigned as Directors, but had also paid a sum of Rs.12 lakhs to the plaintiff's company.
25. In this case, during cross examination Pw-1 has stated as follows:-
I am aware of the letter dated 14.10.2008 wherein it is stated that D3 and D4 have paid a sum of Rs.12 lakhs to the plaintiff and asked the plaintiffs to relieved them of their guarantee and also absolve them of all liabilities towards the loan account of D1. The letter dated 14.10.2008 is marked as Ex.D5. The plaintiffs have encashed the cheques without any objection.
26. This fact has not been mentioned by the plaintiff in the plaint. In fact, the plaintiff has not produced any statement of accounts to show the actual amount due from the defendants. In all fairness, they should have produced a statement of accounts before this Court showing the amounts paid, the date on which such amounts were paid and the deduction towards interest and the actual amount due. They should also have filed statement of accounts acknowledging the payment of Rs. 12 lakhs as mentioned above. The plaintiff has not disclosed the true facts before this Court.
27. PW-1 has admitted knowledge of Ex.D-5. He is the signatory to the plaint. He should have produced the said document before this Court and should also have invited this Court to consider the same. The crucial word appearing in Ex.D5 is as eventually agreed which has not been controverted by the witness when the document was put to him. If the plaintiff had agreed to relieve the third and fourth defendants from their obligations, then they should have very fairly stated the same before this Court. I hold that suppression of this fact affects the claim of the plaintiff against the third and fourth defendants and consequently, with respect to issue No. 4, I hold that having accepted a sum of Rs. 12 lakhs, which in their opinion was towards full and complete discharge of the third and fourth defendants from their liabilities, the plaintiff cannot make a claim against the third and fourth defendants. This issue is answered in favour of the third and fourth defendants.
Issue Nos. 5 and 6:
28. It is an admitted fact that the constitution of the first defendant's company had changed from time to time with resignation of Directors and consequent change to the name of the company. However, the address of the companies were one and the same. There is no record produced to show that the first defendant company has been wound up or has gone into the liquidation. In fact, the first defendant company and its Director, the second defendant remained ex-parte though the suit summons have been served on them. This conduct itself shows that they are not interested in challenging the claim of the plaintiff.
29. The company by name M/s. International Process Outsourcing Limited is only the first defendant in another garb and consequently, whether there is any direct contract between the plaintiff and the said company, I hold that the first defendant company would still be liable for the amounts received by it. If every change in constitution would necessitate impleading of newly added parties, it would be a never ending exercise and consequently, I hold that the suit is not bad for non-joinder of necessary. Whether there is a contract between the plaintiff and M/s. International Process Outsourcing Limited is not essential to be determined since the liability of the first defendant continues. The issues are answered accordingly.
Issue No.7:
30. The deed of guarantee was executed on 15.05.2002. The plaintiff rest their claim by stating that interest upto December 2005 had been paid by Ex.P-7 dated 24.08.2006. There has been an acknowledgment of debt, no-doubt, by M/s. International Process Outsourcing Limited, but still acknowledged.
31. It is also the case of the plaintiff that by Ex.P-5 dated 12.07.2006, a sum of rs.41,237/- had been paid towards interest for the month of December 2005. The suit had been filed on 29.01.2009 within three years from the date of such payment and consequently, I hold that the suit is not barred by limitation.
Issue No.9:
32. The third and fourth defendants in their written statement have raised counter claim of Rs. 12 lakhs against the first and second defendants. It had been fairly admitted by the learned counsel for the third and fourth defendants that even while presenting the written statement, this Court had made it clear that the third and fourth defendants cannot make a counter claim as against the first and second defendants. The same position is reiterated and this issue is answered against the third and fourth defendants.
Issue Nos. 8 and 10:
33. The suit has been decided on the following facts:
1) That execution of the loan agreements and personal guarantees by the defendants had been admitted.
2) That the first and second defendants have chosen to remain exparte.
3) That the third and fourth defendants had sold their share holdings and had been released from liability by the first defendant company and they had informed the plaintiff also.
4) That the third and fourth defendants had paid a sum of Rs.12 lakhs 'as eventually agreed' to the plaintiff and consequently, on probabilities, inference can be found that they have been discharged from their liabilities.
34. In view of the findings given above, I hold that the suit is to be dismissed as against the third and fourth defendants without costs and decreed partly as against the first and second defendants with cost. The plaintiff is to proceed for execution against the first and second defendants after adjusting the sum of Rs.12 lakhs paid by the third and fourth defendants and interest paid upto December 2005. The suit is decreed partly with cost against the first and second defendants and dismissed as against the third and fourth defendants without cost.