Gujarat High Court
Judgename :S.B.MAJMUDAR
PORBANDAR COMMERCIAL CO-OPERATIVE BANK LIMITED - Appellant
Versus
BHANJI LAVJI - Respondent
S.CRI.A. 299 of 1978
Decided On : 07/04/1984
Gujarat Co-operative Societies Act 1961 – Sec. 96 – Indian Contract Act – Sec. 141 – Appellate Jurisdiction – Constitution of India, 1950 – Articles 226 and 227 – Appellate jurisdiction – Loan transactions – In these two petitions under Art. 227 of the Constitution of India though styled as petitions under Art. 226 a common order of the Gujarat State Co-operative Tribunal exercising appellate jurisdiction under the provisions of Gujarat Co-operative Societies Act 1961 has been brought under challenge – Held, Signatories would get exonerated on account of sec. 141 of the Indian Contract Act cannot help him in arbitration case for the simple reason that the Tribunal has found that no such defence was put up on behalf of the defendant-firms in that case and there was no evidence on record to show that the security in that case was lost by the petitioner-creditor – the benefit of sec. 141 which was available in companion case was not available to the defendants in arbitration case – Hence the last contention raised by Mr. Desai has got to be accepted – It is held that even though other partners of the concerned two firms are not liable and no decree can be passed against the concerned two firms as such the respective two partners Shri D. V. Simaria and Shri Nathalal Dhanji who had signed the surety bond would remain personally liable to answer the suit claim as sureties – Decree can be passed against these two partners to the aforesaid extent even though further relief cannot be granted to the petitioner against the remaining partners of the said two firms – Order Accordingly
( 1 ) IN these two petitions under Art. Z27 of the Constitution of India though styled as petitions under Art. 226 a common order of the Gujarat State Co-operative Tribunal exercising appellate jurisdiction under the provisions of Gujarat Co-operative Societies Act 1961 has been brought under challenge. By the said common order two appeals have been disposed of by the Tribunal. Consequently two writ petitions have been filed.
( 2 ) THE petitioner in both these petitions is the Porbandar Commercial Co-operative Bank Ltd. The said bank had advanced two different amounts under two separate loan transactions. to respondent No. 3 who is the common respondent. He is Mr. P. V. Simaria proprietor of Ashok Electrical Industries. He is the principal; debtor in both the proceedings. According to the patitioner Bank the said loans were advanced on the basis of the security furnished by respondents Nos. 1 and 2 which are two firms functioning at Porbandar and whose partners according to the petitioner-Bank guaranteed repayment of both these loan amounts by principal debtor respondent No. 3. As the loan amounts were not recovered from the principal debtor the petitioner-Bank filed two separate arbitration cases being LVD cases No. 1581 of 1975 and 1582 of 1975 under Sec. 96 of the Act before the Board of Registrars Nominees Rajkot. In both these suits there were common defendants defendant No. 1 being the principal debtor. respondent No. 3 herein while the two firms were joined as defendants No. 9 and 3 respectively. Money decrees were claimed against the principal debtor as well as against the partners of the concerned two firms defendants No. 2 and 3 respectively. The Board of Nominees after recording the evidence in both these cases came to the conclusion that the principal debtor original defendant No. 1 was liable to pay the loan amounts with interest as prayed for. So far as common defendants No. 2 and 3 were concerned according to the Board of Nominees awards were required to be passed against the concerned firms meaning thereby against all of their partners as they had stood sureties for the repayment of the loan amounts and hence they were liable to make good the amounts as assured. Accordingly both the cases were decreed and the concerned three defendants were ordered to repay the amounts jointly and severally. That resulted into two appeals before the Gujarat State Co-operative Tribunal on behalf of original opponents Nos. 2 and 3 the firms against which awards which awards were passed on the basis that they were sureties for repayment of the respective loan amounts. Appeal No. 54 of 1977 was filed against the award in arbitration case No. 1581 of 1975 while appeal No. 55 of 1977 was filed by the very same defendants Nos. 2 and 3 against the award in arbitration case No. 1582 of 1975. The petitioner-plaintiff Bank was joined 35 Contention respondent No. 1 in both these appeals while the principal debtor was joined as common respondent No. 2 in both these appeals. These appeals came to be allowed by the Tribunal by its common order dated 12/10/1977 The Tribunal took the view that so far as arbitration case No. 1581 of 1975 was concerned the decision in which was the subject matter of appeal No. 54 of 1977 no decree could by passed against the original opponent No. 2 firm as the signatory below the guarantee agreement Shri D. V. Simaria had no authority to bind the firm and therefore rest of the partners of the firm. So far as original opponent defendant No. 3 firm was concerned the Tribunal took the view that the signatory below suretyship agreement Shri Nathalal Dhanji who signed on behalf of the firm would not have by his mere signature bound the other partners of the firm but for the letter produced at Exh. 3516 proving that all the remaining partners of opponent No. 3 final had ratified the action of their colleague who had signed the surety bond on behalf of the firm. On this finding of the Tribunal the decr
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