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IN THE HIGH COURT OF JUDICATURE AT MADRAS
Honourable Dr Justice G. JAYACHANDRAN
Tamil Nadu Industrial Investment Corporation Limited, Rep. by its Branch Manager – Appellant
Versus
Pulsar Electronics Ltd, represented by its Director – Respondent
| Table of Content |
|---|
| 1. nature of the loan agreement and parties involved (Para 1 , 2 , 3 , 4 , 5) |
| 2. obligations and rights of the guarantors (Para 6 , 7) |
| 3. allegations of negligence and mismanagement by tiic (Para 8 , 9) |
| 4. legal arguments regarding the guarantee and debtor liability (Para 10 , 11 , 12 , 13) |
| 5. precedents and legal interpretations concerning guarantor obligations (Para 14 , 15 , 16 , 17 , 18) |
| 6. clarification on the nature of security interests and liability (Para 19 , 20 , 21) |
| 7. position on the legal recourse available post-liquidation (Para 22 , 23) |
| 8. affirmation of rights under the state financial corporations act (Para 24 , 25 , 26 , 27 , 28) |
| 9. conclusion of liability and order for payment (Para 30 , 31) |
ORDER :
(G. JAYACHANDRAN, J.)
The petitioner herein, the Tamilnadu Industrial Investment Corporation Limited (hereinafter be referred as: 'TIIC' in short), is a Public Financial Institution incorporated under the Companies Act and governed by the provisions of the State Financial Corporations Act, 1951.
2. The First Respondent, M/s.Pulsar Electronics Limited (hereinafter be referred as: 'Company' in short) applied for a term loan of Rs.60 lakhs on 07/05/1987 for the purch
Post-liquidation, a financial institution retains the right to recover dues from guarantors, reaffirming that guarantees remain enforceable regardless of the principal debtor's discharge during insol....
The right of a Financial Corporation to recover dues from guarantors survives post-liquidation of the principal debtor, and such guarantees remain enforceable.
The limitation period for recovery of money from a surety under the State Financial Corporation Act is three years, and failure to initiate proceedings within this period renders the claim barred by ....
Guarantors remain jointly and severally liable for loan defaults regardless of the principal debtor's separate legal status, as established under Sections 29 and 31 of the State Financial Corporation....
A decree cannot be passed under Section 31 of the State Financial Corporations Act, 1951, and any execution petition based on such a decree is not maintainable.
The court held that a claim for loan recovery is barred by limitation if not filed within three years of the last transaction, and proper mortgage documentation is essential for enforceability.
The remedies under Sections 29 and 31 of the State Financial Corporations Act are independent and can be pursued separately.
Limitation against personal guarantor under on-demand guarantee deed commences from date of demand notice invoking guarantee, not principal borrower's default date. Section 95 applications filed with....
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