1. There is a single petitioner in C.W.J.C. No. 12155 of 2002. He is one of the sureties to the loan given by the Bihar State Credit and Investment Corporation Limited (BICICO) to a company called M/s. Sunil Polyplast Limited. In C.W.J.C, No. 501 of 2003 there are two petitioners. Petitioner No. 2, M/s. Eastern Food Industries Pvt. Limited had taken a loan from the BICICO and petitioner No. 1 is the surety for the repayment of the loan. The petitioners in both the cases seek the same relief under similar sets of facts and circumstances and the two cases raise a common question of law. These two cases, therefore, though heard at a gap of four days are being disposed of by this common judgment.

2. The question of law that arises for consideration in these two cases is whether for the recovery of loan granted by the BICICO the surety (the guarantor) can be proceeded against under the provisions of the Public Demands Recovery Act on the basis of a clause in the loan agreement even though there is no similar clause in the deed of guarantee and the guarantors had not otherwise also agreed by a written instrument that the loan granted to the loanee would be recoverable as public demand.

3. The material facts in C.W.J.C. No. 12155 of 2002 are as follows. On 30-3-1988 M/s. Sunil Polyplast Limited, a company incorporated under the Indian Companies Act took a loan of Rs. 90 lacs from the BICICO. The petitioner was the Managing Director and one Shyam Bihari Mehrotra was another Director of the Company of which 51% shares were held by another Government Company, namely, Bihar State Pharmaceuticals and Chemicals Development Corporation. The petitioner executed the standard loan agreement on 30-3-1988 in his capacity as the Managing Director of the loanee-company. The repayment of the loan was further secured by two deeds of guarantee, dated 30-3-1988; one of the guarantees was executed by and on behalf of the Bihar State Pharmaceuticals and Chemicals Development Corporation (Annexure-2) and the other guarantee was jointly executed by the present petitioner and the aforesaid Shyam Bihari Mehrotra in their individual capacity (Annexure-17). The borrower company defaulted in repayment of the loan and eventually on 1 -6-2002 the BICICO instituted a Certificate Case registered as BlCICO/Certificate Case/157/ 2002 for realisation of its outstanding dues against the company amounting to Rs. 2,35,68,000.00 . The certificate case was instituted against the company as the borrower and the present petitioner and Shyam Bihari Mehrotra as sureties for the repayment of the loan. The BICICO did not choose to make the other guarantor, Bihar State Pharmaceuticals and Chemicals Development Corporation as one of the certificate debtors. It may further be noted that Shyam Bihari Mehrotra was already dead at the time of institution of the certificate case and when this fact was brought to the notice of the Certificate Officer his name was deleted from the certificate by order dated 24-10-2002 passed in the certificate case.

4. It is also the admitted position that the borrower company M/s. Sunil Polyplast Ltd. is under winding up in Company Petition No. 8/2002 pending before this Court. By an order passed in that case the assets of the company are taken over by the official liquidator; by another order passed in that case proceedings in the certificate case are stayed insofar as the company is concerned. The upshot is that Certificate Case No. 157/2002 is at present proceeding only against the petitioner in his personal capacity as surety for the repayment of loan.

5. The material facts in C.W.J.C. No. 501 of 2003 may be stated thus; petitioner No. 2, namely M/s. Eastern Food Industries Pvt. Limited was sanctioned a loan of Rs. 90 lacs by the BICICO on 10-11-1987. The standard loan agreement (Annexure-B) was executed on behalf of the company on 9-1-1989. The repayment of the loan was further secured by a guarantee jointly executed by petitioner No. 1 an