GITA MITTAL, J.

( 1 ) THIS application has been filed under the provisions of Order 37 Rule 4 read with Rule 3 (7) of the Code of Civil Procedure. The defendant No. 2, shri Sumaj Jain thereby seeks setting aside of the ex parte judgment/decree dated 29th August, 2000/11th October, 2000 and stay of the execution proceedings in Execution Case No. 234/2002. The applicant has also sought condonation of the delay of one day in filing the Memo of Appearance and leave to defend the suit.

( 2 ) THE plaintiff herein is a private limited company incorporated under the provisions of the Companies Act, 1956. It is the claim of the plaintiff that it had been approached by the defendant No. 1/company for grant of financial assistance in the form of bill discounting facility. On terms and conditions contained in the plaintiff's letter dated 12th September, 1995, the plaintiff had agreed to provide bill discounting facility to the defendant No. 1 to the extent of Rs. 55. 0 lacs. Terms were duly accepted for and on behalf of defendant No. 1 whereby a binding contract between the parties came into existence.

( 3 ) THE defendant No. 2 applicant herein, is alleged to have furnished a personal guarantee as a Managing Director of the Company which deed was executed on the 15th of September, 1995. The defendant No. 1 was required to provide additional security by pledging the shares of M/s. Dhanam Trades and Agencies Ltd. , M/s. Charismatic Trade Links Ltd. and M/s. Oasis (India)Ltd. arrayed as the defendant nos. 3 to 5 before this court, as security with the plaintiff.

( 4 ) SEVERAL documents were executed for and on behalf of defendant No. 1 for securing the facility granted to it. These included a demand promissory note and a letter of continuity by a duly authorized person; post dated cheques for the payment of the principal amount; post dated cheques to the extent of 15% of the principal amount towards payment of liquidated damages with a covering letter in case of failure to repay the amounts on the due date; letters pledging the equity shares of defendant nos. 3 to 5 with resolutions of the respective Board of Directors; bills of exchange (hundi)duly stamped and accepted and signatures thereon duly attested; invoices drawn by the drawers together with the goods receipts; challans and lorry receipts duly completed in all respects; and an undertaking that in respect of these bills/invoices, the defendant No. 1 had not sought earlier discounting facilities.

( 5 ) AS per the agreement between the parties, the bill discounting facility was available only for a period of 105 days. The plaintiff has claimed that in the event of default, the principal amount was payable with penal interest at the rate of 48 per cent per annum from the date of maturity, that is after the expiry of 105 days till the date of payment. As the defendant No. 1 failed to fulfil the commitment and cheques issued by defendant No. 1 towards discharge of its liability were dishonoured, the plaintiff alleged that the defendants comprising of the principal debtor, guarantor and sureties became jointly and severally liable to pay the amount of Rs. 55. 0 lacs of bill discounting facility advanced by the plaintiff with interest at the rate of 48 per cent per annum and damages of Rs. 8. 25 lacs. The plaintiff had issued a registered letter dated 13th January, 1996 calling upon the defendants to pay to it a sum of Rs, 63,25 lacs together With interest. However, in the suit, the prayer was restricted to the amount of Rs. 55. 0 lacs which was being claimed towards the bill discounting facility and pendente lite and future interest at the rate of 24 per cent per annum from the date of suit till realization of the amount.

( 6 ) THE suit was filed against M/s. Premium International Finance Ltd. (as defendant No. 1) and Shri Sumaj Jain, M/s. Dhanam Trades and agencies Ltd. , M/s. Charismatic Trade Links Ltd. and M/s. Oasis (India)Ltd. as defendant nos. 2 to 5 respectively. The suit was