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1. This order of mine shall dispose of F.A.O. Nos. 700 of 1989 and 701 of 1989 and Civil Misc. Nos. 3581-CII of 1991 and 3024-CII of 1991.

2. State Bank of Patiala (hereinafter called The bank'), filed two suits against the Punjab Spinning and Weaving Mills Limited and others, for the recovery of Rs. 93,37,876-12P and Rs. 84,03,020/40P. The appellants were impleaded as defendants in those suits as it was alleged that they stood as guarantors for the repayment of the loan given to the company. The appellants in their written statement have denied that they gave guarantee in their individual capacity. Their case is that they signed the documents in the capacity as Directors of the company. The Punjab State Industrial Development Corporation (hereinafter called the 'PSIDC' is the promoter of the company, holding majority shares of it.

3. During the pendency of the suit, the bank filed an application dated 7th of February, 1987, under Order 38, Rules 5 and 6 read with Order 39, Rules 1 and 2 of the Code of Civil Procedure (hereinafter called 'the Code') vide which the property of the company as well as of the Directors was sought to be attached. Along with the application, it also filed Annexures 'A' and 'B' giving the details of property belonging to the company and the Directors. This application is pending consideration with the trial Court. PSIDC entered into an agreement dated 25th of September, 1986 with the appellants and under the said agreement, PSIDC agreed to purchase shares of the company held by the appellants or their nominees for a total consideration of Rs. 91,00,000/- (Rs. Ninety one lakh only). Under the said agreement, it was also agreed that a sum of Rs. 48,00,000/-(Rs. Forty eight lakh) will be paid by February, 1987 in monthly instalments of Rs. 7.90 lakhs and the balance of Rs. 43 lacs was to be paid to the petitioners in suitable instalments of Rs. 7.90 lacs each month and the total payment was to be made by August, 1987. It was also agreed vide the said agreement that in case of any delay in the payment of instalments, the same shall be payable with interest @ 18% p. a. on the defaulted payment for the defaulted period. It is not in dispute as per the conditions of the agreement that a sum of Rs. 24 lacs has already been paid to the appellants. Before the remaining amount could be paid by the PSIDC to the appellants, the bank filed another application dated 28-4-1987 under Order 38, Rule 5, read with Order 39, Rules 1 and 2, Code of Civil Procedure, seeking attachment before judgment regarding remaining amount which was to be paid by PSIDC to the appellants in pursuance of the agreement dated 25-9-1986.

4. The trial Court passed an ex parte order dated 30th of April, 1987, attaching a sum of Rs. 32 lacs which had become due and payable to the appellants and the remaining amount of Rs. 35 lacs was also attached by an ex parte order dated 23rd of May, 1987. The appellants in response to the notice of the said application, filed reply and contested the ex parte order of attachment passed attaching the amount which was payable to them under the agreement. The appellants also filed an application that PSIDC be ordered to deposit the amount payable to them under the agreement, in the bank so that they may not lose interest in the said amount. The trial Court vide order dated 10th of November, 1988, directed the PSIDC to deposit the amount. PSIDC challenged the said order in Civil Revision No. 3168 of 1988 in this Court and the same was decided on 14-3-1989 by J. V. Gupta, J. (as then he was). J. V. Gupta, J. was of the view that unless the application under Order 38, Rule 5, of the said Code, filed by the bank is finally disposed of, the trial Court should have not directed PSIDC to deposit the amount in the bank as directed by the trial Court vide order dated 12th of November, 1988. In the concluding paragraph of the judgment in C.R. No. 3168 of 1988, J. V. Gupta, J. also held that in case the amount lying with PSIDC is attached under Order 38, Rule 5 of the Code, PSIDC will be liable to pay interest thereon as per the agreement or at the bank rate then prevalent, from the date when it became payable to the appellants, till actual payment. The trial Court was also directed to keep in mind the fact that the property of the company already stood mortgaged with the Bank while passing the final orders under Order 38, Rule 5, of the Code.

9. The case of the appellants is that the assets of the Company are not less than Rs. 15 crores. The appellants had also made an offer in this Court they are willing to take over the company on payment of Rs. 15 crores. However, this offer was not acceptable or found favour with the plaintiff-bank. The applicants have brought on record vide CM. No. 3581-CII of 1991, the Minutes of Consortium held on 30th May, 1989 at New Delhi, which was attended by the representatives of PSIDC, Punjab Spinning and Weaving Mills Ltd., Indian Overseas Bank and State Bank of Patiala. Perusal of the Minutes shows that the representatives of these Institutions, agreed to absolve the appellants from liability and for taking other assets and liability of the company by the PSIDC. It is also not disputed that the PSIDC has taken over the affairs of the company and the appellants are no more involved in the working of the company. The entire shareholding of the company held by the appellants, was taken over by PSIDC vide the agreement dated 25th of September, 1986 for a total consideration of Rs. 91 lacs. The amount now sought to be attached by the Bank, is part of the said amount which is payable to the appellants by the PSIDC in pursuance of the agreement. Nothing has been brought on record to show that the assets of the company are not sufficient to meet the amount sought to be recovered by the Bank covered under the two suits against the Company and others.