Settlement by company amounts to compounding with principal debtor & results in discharge of surety

HIGH COURT OF PUNJAB AND HARYANA Kundanmal Dabriwala v/s. Haryana Financial Corporation CIVIL WRIT PETITION NO. 2713 OF 2009 (O & M) DECEMBER 20, 2011 JUDGMENT Hemant Gupta, J. – The challenge in the writ petition is to a show-cause notice dated October 7, 2008 (annexure P1) served upon the petitioner to pay a sum of Rs. 83,58,671 under section 32G of the State Financial Corporations Act, 1951 (for short “the SFC Act”). The challenge is on the basis that once the principal debtor has settled its loan account with the Corporation, the petitioner, who is a...