The appellant was legally bound to register the charge in favor of the respondent under Section 141 of the Companies Act.

MANMOHAN, J :

1. Present appeal has been filed under Section 10F of the Companies Act, 1956 (for short ‘the Act’) challenging the order the dated 7March, 2007 passed by the Company Law Board (for short ‘CLB’) whereby Company Petition No. 461/141/06-CLB filed by Co. A(SB) 6/2007 Page 1 of 12 the respondent under Section 141 of the Act was allowed.

2. The relevant facts of the present case are that the appellant had and offered its guarantee vide its letter dated 2March, 2005 for credit limits sanctioned to M/s. Naturex Oils (P) Ltd. by Union Bank of India and Indian Overseas Bank. The amount under the said guarantee was not to exceed `5,48,00,000/-. Clauses 1, 7, 8, 9 & 13nd of the Letter of Guarantee dated 2March, 2005 executed by the appellant are reproduced hereinbelow:-

“1. The guarantee shall be continuing security binding me/us and my/our personal representative until the expiration of three calendar months from the receipt by the bank of a notice in writing to discontinue it and notwithstanding the discontinuance by or any release of granting of the time or indulgence to any one or more of us this Guarantee shall remain in continuing security as to the other and if discontinued by notice this guarantee shall nevertheless as to the party or parties giving such notice continue to be available (subject to the aforesaid limit of total amount) for and shall extend to all indebtedness and liabilities of the Principal to the Bank at the date of the receipt of such notice whether then certain or contingent and whether then payable forthwith or at some further time or times and also for and to all credits then established by the Bank for the Principal for and to all credit facilities granted and to cheques, drafts, bills, notes and negotiable instruments drawn by or for the account of the principal on the Bank and dated or purporting to be dated on or before such date although presented to or paid by the bank after such date and to all guarantees given by the Principal in favour of the Bank and that in the event of my/or any of us dying or becoming under disability the liability of the executor, administrators or legal representatives of such person so doing and of his estate shall continue until the expiration of three calendar months from the receipt by the Bank of an written notice given by such executor, administrators, legal representative for the survivors or survivor of one us) to determine this clause at any time within the three calendar months to open a fresh account and/or to grant fresh facilities to the Principal and to appropriate thereto all payments subsequently made to you by the principal and not expressly appropriated to the old account without prejudice to my/our estates liability to the extent aforesaid.

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7. Though as between the principal and me/ us I am /we are sureties only, I/We agree that as between the Bank and me/ us I am/ we are principal debtor(s) and I/We shall not be entitled to any of the right conferred on sureties by sections 133, 134, 135, 139, 141 and 145 of the Indian Contract Act, 1872.

8. I/We waive in the Bank’s favour all or any of my/our rights against the bank or the Principal as far as maybe necessary to give effect to any of the provisions of this Guarantee.

9. I/We declare that I/We have not received any security from the Principal for the giving of this Guarantee and I/We agree that I/We will not so long as any money remain owing by the Principal to the Bank or any liability of the Principal to the Bank remain outstanding take any security in respect of my/our liability hereunder without first obtaining the bank’s written consent and I/We agree that in the event of my/our taking any such security the amount for which I/We are to be liable under this Guarantee shall be increased by the amount of which the dividend payable by the Principal to the Bank on insolvency or winding is thereby diminished.

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13. In the event of this Guarantee bei