(Prayer: Application filed under Order XIV Rule 8 of Original Side Rules, 1956, read with Section 9, 11(b) of Company Court Rules, 1959, to grant leave to the applicant to continue the suit proceedings in C.S.No.258 of 2002 pending on the file of Original Side, High Court, Madras.)
1. On behalf of non-applicant No.1/respondent No.1, notice is accepted by Mr.Neelakandan.
2. To be noted, non-applicant No.1/respondent No.1, is the original petitioning creditor.
3. Learned counsel, who appears for non-applicant No.1/respondent No.1, says that he does not wish to file a reply.
4. To be noted, the learned Official Liquidator (OL) has been arrayed, as non-applicant No.2/respondent No.2.
5. The Company in provisional liquidation is M/s.Best and Crompton Engineering Ltd. (in short BCEL ).
5.1. By virtue of this application, leave is sought by the applicant, to continue with its suit, filed against the company in provisional liquidation, i.e., BCEL, which is, represented by the learned OL and, against Allahabad Bank.
5.2. This suit has been filed on the Original Side of this Court and, is, numbered as C.S: 258 of 2003. BCEL [in provisional liquidation], has been arrayed as defendant No.1, while Allahabad Bank has been arrayed as defendant No.2.
6. The broad averments made in the application are as follows:
6.1. BCEL [in provisional liquidation], had entered into an agreement, dated 30.07.1990, with an entity, by the name M/s.Malta Investment Management Company Ltd., (in short MIMCOL ), for the purpose of carrying on business in foundaries.
6.2. It is averred, that MIMCOL and BCEL, together incorporated another company, by the name M/s.Malta Foundary. It is stated that the management of Malta Foundary was vested in BCEL [company in liquidation].
6.3. It is further averred that, BCEL requested the applicant, to grant credit facilities, to meet financial needs of Malta Foundary.
6.4. Accordingly, it appears that, the applicant, sanctioned Maltese 1,00,000 in favour of BCEL [in provisional liquidation]. This assistance was subsequently, enhanced to LM 190,000, vide letter dated 27.07.1991.
6.5. It is the claim of the applicant that, the loan granted to BCEL was secured, via Bank Guarantee furnished by Allahabad Bank, which, as indicated above, is arrayed as defendant No.2, in the suit filed by the applicant.
6.6. It is further averred that, Allahabad Bank furnished a Bank Guarantee, in the sum of LM 190,000, which was initially valid, till 06.07.1992 and, thereafter, renewed till 05.07.1993.
6.7. It appears that BCEL, defaulted in making re-payment of the principal and the interest amount and, as a result of the same, the applicant invoked the Bank Guarantee.
6.8. The applicant claims that, Allahabad Bank colluded with BCEL, which resulted in, time being accorded to BCEL, to file a civil suit. The said civil suit was numbered as O.S: 983 of 1993.
6.9. This suit was initially filed before the District Court, Chengalpattu, which was, thereafter, transferred to the District Munsif's Court at Poonamallee. On transfer, the suit was re-numbered as O.S:1660 of 1997.
6.10. While the suit was pending at Chengalpattu, an ex parte order was obtained, evidently by BCEL on 07.06.1993, in which, interim injunction was made absolute on 20.08.1993.
6.11. The applicant claims that, an application was filed to set aside the ex parte order, which was dismissed, vide, order dated 12.08.1997. Against the said dismissal, C.R.P.No.3285 of 1999 was filed with this Court. It is averred that, this Court allowed the petition and set aside the ex parte order dated 07.06.1993.
6.12. The applicant further avers that, it filed another petition to vacate the interim injunction, which was numbered, as C.R.P: 2168 of 1999, and was allowed by this Court, vide order dated 06.11.2000. As a result, the order dated 20.08.1993 was also set aside.
6.13. The applicant, further avers that, thereafter, BCEL entered into a settlement and, agreed to pay, LM 190,000, as full and final amount, against guarantee, dated 06.07.1991.
6.14. It is the case of the applicant that, the said amount was accepted, albeit, without prejudice to its rights.
7. In the affidavit accompanying the application, assertion has been made, that expenses were incurred by the applicant, towards lodging, travel and legal expenses.
7.1. It is further averred that, apart from reimbursement of expenses, the applicant is also entitled to compensation, in the form of interest, at the rate of 18%.
7.2. The applicant's case, thus, as it appears, in the pending suit, is that, it is entitled to be reimbursed not only the expenses incurred in the prosecution of its actions but should also be compensated, both by BCEL, which is represented by the OL and the guarantor, i.e., the Allahabad Bank for the inujury/loss cause to it.
8. I am informed by the learned counsel for the applicant, that the suit is at the stage of trial.
9. Having regard to the foregoing, normally, I would have asked, the applicant to prefer a claim before the learned OL, however, having regard to the fact, that the guarantor, Allahabad Bank, is also arrayed, as defendant No.2, in the suit, this may not be possible. Therefore, without prejudice to the right of the OL, to raise all legal and factual contentions, in the pending suit, leave as prayed, for the continuation of the suit, as against BCEL [in provisional liquidation] is granted.
10. The captioned application is disposed of on the aforesaid terms.