CENTRAL BANK OF INDIA versus VIRUDHUNAGAR STEEL ROLLING MILLS LTD. & ORS.

Personal guarantees executed by Respondent Directors on 30.8.1974 rendered them liable only for advances made by appellant bank after that date; there being no express assumption of previous liabilities in the guarantee deed, the bank cannot recover prior debts from them.

Parties: Appellant: Central Bank of India; Respondent No.1: Virudhunagar Steel Rolling Mills Ltd.; Respondents No.2 to 4: Directors of Virudhunagar Steel Rolling Mills Ltd. (Respondent Nos.2 to 4); Respondent No.5: Respondent No.5; Respondent No.6: Respondent No.6
Jurisdiction: India
Judgment Date: 29 December 2015
Procedural Posture: Civil Appeal / Supreme Court Decision on Appeal From High Court Judgment
Outcome: Appeal dismissed
Legal Topics: Guarantee Liability, Personal Guarantees, Contract Interpretation, Suretyship

Banking Law Contract Law Guarantee Liability Personal Guarantees Contract Interpretation Suretyship

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Full judgment text Legal principles 2 Authorities cited 6 Party arguments 2 Amounts and remedies 4

Parties

Central Bank of India

Appellant

Virudhunagar Steel Rolling Mills Ltd.

Respondent No.1

Directors of Virudhunagar Steel Rolling Mills Ltd. (Respondent Nos.2 to 4)

Respondents No.2 to 4

Respondent No.5

Respondent No.6

Procedural Posture

Civil Appeal / Supreme Court Decision on Appeal From High Court Judgment

Legal Issues

1 Whether personal guarantees by Directors executed on 30.8.1974 cover liabilities incurred by the company prior to that date.

Ratio Decidendi

Court Disposition

Appeal dismissed

Orders

Concurrent findings of courts below affirmed; suit decreed only against respondent company; no costs order.