Amit Mahajan JUDGMENT
Vibhu Bakhru, J.
1. The petitioner (hereafter 'SBI') has filed the present petition impugning an order dated 20.10.2015 passed by the learned Debts Recovery Appellate Tribunal (hereafter 'the DRAT') in Appeal no. 220/15 captioned Stephen Arhana v. State Bank of India & Ors. The aforesaid appeal was filed by the respondents impugning an order dated 30.06.2014 passed by the learned Debts Recovery Tribunal (hereafter 'the DRT') whereby SBI's Original Application (OA), filed under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for recovery of a sum of ` 42,83,11,137/-along with the interest, was allowed against the parties arrayed as respondent Nos. 1 to 4. Respondent no.1 was arrayed as respondent no.3 in the said O.A. filed by SBI and thus, in terms of the order dated 30.06.2014 passed by the learned DRT, was held to be liable to pay the amounts due to SBI.
2. SBI had extended financial assistance to respondent no.2 (M/s Altos India Ltd.) which was both fund based and non-fund based. It is SBI's case that the facilities extended to respondent no.2 were guaranteed by promoters and directors, including respondent no.1. The controversy, in the present appeal, is confined to the liability of SBI's claim against respondent no.1 as a guarantor for the financial facility extended to respondent no.2.
3. Respondent no.1 as well as the other parties, who were arrayed as parties before the learned DRT as guarantors for the loans/facilities extended to respondent no.2, had denied their liability on several grounds, including that the documents executed by them were secured by misrepresentation and were invalid. However, the said contentions were rejected. It is respondent no.1's case that he was an employee of respondent no.2 and had signed certain documents in his capacity as a director. He had no personal liability for the debts owed by respondent no.2. The learned DRT rejected the aforesaid contention and found that respondent no.1 had executed the Deed of Guarantee as respondent no.1 had admitted his signatures on the said document.
4. Respondent no.1 appealed the order dated 30.06.2014 passed by the learned DRT before the learned DRAT. He urged several grounds in support of his contention that he was not liable for the financial loans granted by SBI to respondent no.2. However, respondent no.1's appeal was allowed on the sole ground that he stood relieved of the guarantee executed by him because it was limited till a collateral security was created in favour of SBI. Concededly, the collateral security was created subsequent to the execution of the Deed of Guarantee and therefore, respondent no. 1's liability under the Deed of Guarantee stood extinguished. SBI had relied on various letters of acknowledgment acknowledging the renewal of facilities, however, the learned DRAT found that further acknowledgment of debts by respondent no.1 were not made in his personal capacity but in the capacity of a director of the borrower (respondent no.2), and in any event could not extend the obligations as a guarantor.
5. It is not necessary for this Court to examine the various grounds of challenge urged by respondent no.1 to dispute his liability as a guarantor, as respondent no.1's appeal was allowed by the learned DRAT on the sole ground that he was relieved of his obligation as a Guarantor with the second charge in respect of assets of respondent no. 2 being created in favour of SBI, in terms of the sanctioned letter.
6. Mr. Kakra, learned senior counsel appearing for SBI submitted that the learned DRAT had erred in accepting the contention that respondent no.1 was absolved of his liability for repayment of debts owed by respondent no.2 as there were several documen........