The conduct of the defendants in undertaking to liquidate the liability of the company and the absence of Memorandum of Association and Articles of Association led to the finding that the defendants were jointly and severally liable to pay the amount due to the plaintiff-bank.

CM No. 13407-C of 2011

1. This application has been filed by the 1st appellant invoking the provisions under Order 41 Rule 27 read with Section 151 of the Code of Civil Procedure seeking permission to adduce additional evidence, namely, Memorandum of Association and Articles of Association, of the 1st defendant-M/s Crucible Steels India Private Limited.

2. It has been contended that the Memorandum of Association and Articles of Association could not be produced despite the exercise of due diligence as the aforesaid company was incorporated a long time ago. It is further submitted that in order to decide the controversy as to whether the appellants are personally liable to pay the suit amount, those documents are very much required.

3. I heard the submissions made on either side.

4. The suit has been filed on 7.9.1982 in connection with the suit transaction which took place on 14.1.1981. The present second appeal was preferred in the year 1987 but the above application under Order 41 Rule 27 read with Section 151 of the Code of Civil Procedure was filed by the 1st appellant only on 20.11.2011. In other words, the present application has been filed about 29 years after filing of the suit. The 1st appellant was the constituted attorney and the 2nd appellant was the Managing Director of the 1st defendant-company. Very strangely, it has been contended that the appellants exercised due diligence but in spite of that, they could not produce the Memorandum of Association and Articles of Association of the said company in which they occupied the highest position. Firstly, I find that the appellants have come out with those documents after about 29 years in order to fill up the lacuna in their defence and secondly, the appellants have withheld wantedly those two documents in spite of the fact that the suit has been filed seeking a money decree as against them also. I do not find any reason nor is there any justification to entertain the present application at this distance in time. Therefore, the application stands dismissed.

RSA No. 3832 of 1987:

5. The 2nd defendant-constituted attorney and the 4th defendant- Managing Director of 1st defendant, namely, M/s Crucible Steels India Private Limited (in short, 1st defendant-company) have preferred the present second appeal having suffered a money decree at the hands of the State Bank of Patiala.

6. It has been contended in the plaint that the 4th defendant- Managing Director of the 1st defendant-company opened a current account with the plaintiff-bank on 9.11.1979. 2nd defendant was the attorney of the 1st defendant. The bill discounting facility was granted to defendants 1 to 4 and the 2nd defendant was authorized to operate the account. Three bills were purchased by the plaintiff-bank on 14.1.1981. The bills were sent for collection of the proceeds to the bankers of the 1st defendant at Calcutta. The bills for Rs.67,288/-, Rs.10,808/- and Rs.72,904/- were returned unpaid. The fixed deposit receipts worth Rs.1,00,000/- in the name of 2nd and 4th defendants were adjusted towards the said amount due to the bank. On 23.5.1981, the balance amount of Rs.2,10,000/- was found due and payable by the defendants. 2nd defendant issued a cheque dated 22.4.1982 for Rs.45,000/- for adjustment but the said cheque remained unpaid. After issuing legal notice to the defendants who made default in adjusting the said amount, the suit was filed by the plaintiff-bank.

7. Defendants 1 to 4 filed joint written statement wherein they have pleaded that the suit was bad for misjoinder of parties. The rate of interest claimed by the plaintiff was also challenged. It was contended that blank documents were signed by the defendants. Defendants 1 to 4 sought for dismissal of the suit.

8. The Courts below have held that defendants 2 and 4 were also jointly and severally liable to pay the suit amount with interest and costs along with the 1st and 3rd defendants.

9. At the time of admission of the second appeal way b