JUDGMENT V. P. Gupta, J.— The plaintiff has filed this suit against the defendants for the recovery of Rs. 1,20,113-36. 2. The allegations are that defendent No. I through its proprietor, dependent No. 2, applied to the plaintiff for a cash credit limit of Rs. 1,35,000 for working capital of M/s. Durga Oil arid Flour Mills at Mehatpur. This repuest was accepted by the plaintiff and deferment No.2 executed an agreement Exibit P 1 Defendants 3 and 4 became the gaurantors for the repayment of the loan raised by defendants 1 and 2 and guarantee deeds Exibit P 2 and P 3 were executed by defendants 3 and 4 respectively. Defendent No. 1 was required to maintain regular accounts and was further to maintain sufficient stocks of goods and deposit the sale proceeds with the plaintiff. Defendant No. 2 executed promissory notes Exhibits p 4 and p 5 in favour of gaurantors (defendants 3 and 4) and same were negotiated/endorsed in favour of the plaintiff as a further security for the payment of the loans. Defendants 3 and 4 (gaurantors) also gave security on their properties for the repayment of the loans, by deposit of title deeds and creation of an equitable mortgage. Defendants 3 and 4 also delivered letters to the plaintiff confirming the deposit of their title deeds for creating an equitable mortgage. Defendant No. 1 availed of the facility and confirmed the balances by executing balance conformation letters. 3. It is alleged by the plaintiff that defendant No. 1 failed to repay the loan in spite of the repeated demands and the registered notices. The plaintiff thus filed this suit on 28th February, 1981. 4. Defendants 1 and 2 in their written statement admitted their liability for the repayment of the loan and also admitted the execution of the various documents. It is alleged that after the grant of the cash credit facility, the industrial unit of the defendants a set back due to certain notifications, etc. issued by the Government with the result that the stocks lying with the defendants became unsalable and the defendants could not run the unit satisfactorily The defendants denied their liability to pay the interest and prayed that the amount may be allowed to be paid in easy monthly instalments. 5. issued by the Government with the result that the stocks lying with the defendants became unsalable and the defendants could not run the unit satisfactorily The defendants denied their liability to pay the interest and prayed that the amount may be allowed to be paid in easy monthly instalments. 5. Defendants 3 and 4 (guarantors) in a separate written statement allege that the plaintiffs suit is barred by limitation and they are not liable for the repayment of the loan. They alleged that the loan was advanced to defendants 1 and 2 on the pledge of goods but the plaintiff never took into possession the goods. They further allege that the plaintiff should not have advanced the loan without taking into possession the goods produce aid merchandise of the normal value and the plaintiff should have called upon defendants 1 and 2 to render monthly statements of accounts and the goods. As the plaintiff has neglected in taking the possession of the goods and in asking for regular accounts of stocks, etc. from defendants 1 and 2, therefore their liability is discharged. They also allege that no equitable mortgage was created by them and no such mortgage could be created without registration. 6. Replication was filed by the plaintiff and the allegations of the defendants were denied. 7. On the pleadings of the parties the following issues were framed on 3rd November, 1981 : 1. Whether the suit has been filed by a competent person ? O.P.P. 2. Whether the suit against defendants 3 and 4 is not within time 3 O.P.O. 3 and 4. 3. Whether defendants 3 and 4 are not liable for the amount claimed, as alleged in preliminary objections 2 and 3 of their written statement? O.P.O. 3 and 4 4. Whether the equitable mortgage is void for want of registration and stamp and for the reasons mentioned in the written statement of defendants 3 and 4? O.P.D. 3 and 4 5. To what amount is the plaintiff entitled and against whom ? O.P.P. 6. Whether defendants 1 and 2 are entitled to any instalment, if o, in what manner ? O.P.D. 1 and 2 7. Relief. Parties adduced evidence and arguments were heard. ISSUE No. 1. 8. The learned counsel for the defendants did not press this objection. To what amount is the plaintiff entitled and against whom ? O.P.P. 6. Whether defendants 1 and 2 are entitled to any instalment, if o, in what manner ? O.P.D. 1 and 2 7. Relief. Parties adduced evidence and arguments were heard. ISSUE No. 1. 8. The learned counsel for the defendants did not press this objection. The suit was filed by N. G. Sardana, who is the Assistant General Manager of the plaintiff bank. He is authorised to file the present suit vide order, dated 26th September, 1980 (Exhibit p. 20). Being Assistant General Manager he is also the principal officer of the bank, as has been stated by Slid Manohar Lal Handa (pw 2). Thus the suit has been filed by a duly authorised person. This issue is decided in favour of plaintiff. ISSUES 2 TO 4. 9. These issues can be conveniently decided together. 10. Sri Chhabil Dass, the learned counsel for defendants 3 and 4, con tends that defendants 3 and 4 are not liable for payment of this Joan and the claim against defendants 3 and 4 is not within time. He referred to the terms of agreement Exhibit P. 1 (dated 7th September, 1977) and para 2 of the plaint. He contends that the loan was advanced on pledge of goods produce and merchandise and under conditions Nos. 1 and 3, the possession of goods produce and merchandise should have been taken by the plaintiff. By not doing so, the plaintiff has failed to perform its duties. Registering the pro- notes (Exhibits P. 4 and P. 5) he contends that these were executed by defendant No. 2 on behalf of defendant No. 1 for the transaction evidence by the agreement, Exhibit P. 1, and the pronotes, and Exhibit P. I, in fact, constitute one transaction. On limitation, the learned counsel contends that the loan was advanced by agreement (Exhibit P. 1) dated 7th September, 1977 and there is no acknowledgment by defendants 3 and 4 after this date. He contends that the revival letter (Exhibit P. 10) dated 29th December, 1978 is executed by defendant No. 2 on behalf of defendant No. 1 only and this cannot be treated to be an acknowledgment by defendants 3 and 4. He contends that the revival letter (Exhibit P. 10) dated 29th December, 1978 is executed by defendant No. 2 on behalf of defendant No. 1 only and this cannot be treated to be an acknowledgment by defendants 3 and 4. In support of the various contentions the learned counsel relied upon Motilal Ramkumar and another v. Akbarbhai Fakhruddin and others [AIR 1939 Bombay 309], State Bank of Saurashtra v. Chitranjan Rangnath Raja and another, [AIR 1980 S. C. 1528], and Diyalu Mal v. Nandu Shah Dev Raj and another’s, [AIR 1931 Lahore 691]. On these contentions it is argued that the plaintiffs suit against defendants 3 and 4 be dismissed. 11. Shri K. D. Sood, learned counsel for the plaintiff, contends that the loan was granted to defendants 1 and 2 at the request of defendants 3 and 4. He referred to the letters Exhibit p. 14 of Smt. Jogindra Devi (defendant No. 3) and Exhibit p 15 of Hom Raj Sood (defendant No. 4), He also referred to other documents and contended that all the defendants are jointly and severally liable for the payment of the loan amount. He also contends that the suit is within time. 12. The defendants Nos. 3 and 4 have confirmed the deposit of title deeds of their property with an intention to create an equitable mortgage on the said property by way of collateral security for the amount to be advanced by the plaintiff to defendant No. 1 under credit facilities by writing letters Exhibits P. 14 and 15. The photo state copies of the title deeds are Exhibits P. 12 and P. 13. The plaintiff has also produced a copy of notification No. 5/73-Revenue—A, dated 22nd May, 1976 which proves that the creation/existence of an equitable mortgage as defined under clause (f) of section 58 of the Transfer of Property Act is permissible in Simla. In exhibit P. 25 (a letter of arrangement, dated 1st July, 1977) it is mentioned that cash credit limit of Rs. 1,35,000/- has been sanctioned in favour of defendant No. 1 on terms and conditions, which are mentioned in this letter (Exhibit P. 25). One of the terms is that as a security for repayment of loan, equitable mortgage of the property of defendants 3 and 4 h also created. 1,35,000/- has been sanctioned in favour of defendant No. 1 on terms and conditions, which are mentioned in this letter (Exhibit P. 25). One of the terms is that as a security for repayment of loan, equitable mortgage of the property of defendants 3 and 4 h also created. Hem Raj Sood (defendant No. 4) as a witness has admitted the receipt of this Exhibit P. 25 and he has also signed the same. 13. It is admitted and proved that defendant No. 1 was sanctioned a cash credit facility of Rs. 1,35,000/- by the plaintiff. The defendant No. 1 has executed the agreement. Exhibit P. 1, and is bound by the terms and conditions of the agreement. This is the first security taken by the plaintiff from defendants 1 and 2 for the repayment of the loan. Another security is in the shape of pronotes, Exhibits P. 4 and P. 5, executed by defendant No. 2 in favour of the sureties (i.e. defendants 3 and 4). These pronotes are further negotiated/endorsed in favour of the plaintiff. As a security for repayment of loan an equitable mortgage is also created by defendants 3 and 4 by deposit of their title deeds as is proved by Exhibits P. 12 to P. 15. 14. The defendants Nos. 3 and 4 have written a letter dated 14th September, 1979 (Exhibit P. 11) and they have mentioned that they have created and equitable mortgage in favour of the plaintiff by deposit of their title deeds for the loan advanced to defendant No. 1. In letter, Exhibit P. 11, the defendants also notified to the plaintiff that after receipt of the letter, Exhibit 11, no further loan facility be given to defendant No. 1 against their guarantee. This letter, exhibit P. 11, is sufficient to prove that defendants 3 and 4 stood guarantee for the repayment of the loan and created an equitable mort gage by deposit of title deeds. 15. It is an established principle that a surety like any other contracting party, cannot be held bound to something for which he has not contracted and if the original parties have varied the terms of the original contract then unless the surety has assented to the new terms of the contract the surety cannot be held to be liable for the repayment of the loan. The security is discharged forthwith on the contract being altered without suretys consent as the parties make it impossible for the guaranteed performance to take place. 16. In M.S. Anirudhan v. Thomass Bank Ltd., [AIR 1963 S. C. 746], the following observations were made with approval: “A surety h considered a favoured debtor" and his liability is strictis-simi jures. Lord Westbury, L. C., in Blest v. Brown, (1962) 45 ER 1225 stated this liability in the following words :— "It must always be recollected in what manner a surety is bound. You bind him to the letter of his engagement. Beyond the paper interpretation of that engagement you have no held upon him. He receives no benefit and no consideration. He is bound, therefore, merely according to the proper meaning and effect of the written engagement that he has altered in a single line, no matter whether the alteration be innocently made he has a regent to say. The contract is no longer that for which I engaged to be surety ; you have put and end to the contract that I guaranteed, and my obligations, therefore, is at an end." 17. In Motilal Ramkumar and another v. Akbarbhai Fakhruddin and others, [AIR 1939 Bombay 309] the same principle was, followed. The facts in Motilal Ramkumar and anothers case (supra) were that defendants Nos. 1 and 2 (principal debtors) raised loans from the plaintiff". Defendants 3, 4 and 5 were sureties for the repayment of these loans. Under terms of agreement, the existing debt of defendants 1 and 2 was to be renewed for a period of one year from the date of the agreement and made repayable on 24th September, 1934. The further advance to be made under tie agreement were also to be repayable on 24rh September, 1934. The Total liability of defendants i and 2 was to be Rs. 15,000/- during the period of agreement. These terms were not observed by the plaintiff, and it was proved that different loans repayable after short periods were advanced and the loans so advanced exceeded the limit of Rs. 15,000/- on two occasions. The Total liability of defendants i and 2 was to be Rs. 15,000/- during the period of agreement. These terms were not observed by the plaintiff, and it was proved that different loans repayable after short periods were advanced and the loans so advanced exceeded the limit of Rs. 15,000/- on two occasions. In these circumstances, it was held that the terms contained in clauses of the agreement were not observed at ail and the terms of the agreement had been materially varied between the creditor and the debtor without the consent of the surety and the liability of the surety was, therefore, discharged. This judgment is of no help to the facts of the present case, as in the present case it is not proved that the terms of the contract between the present plaintiff and defendants 1 and 2 (of this suit) were varied at any time without the consent or knowledge of defendants 3 and 4 (of this suit). 18. In State Bank of Saurashtra v. Chitranjan Rangnath Raja and another [AIR 1980 S. C. 1528] the goods were to be pledged by the defendant (debtor) with the Bank (plaintiff) and the surety had undertaken to repay the loan which was advanced to the defendant (debtor) on the pledged goods. It was held that when the pledged goods were lost on account of the negligence of the plaintiff-bank, then in that case the whole security against which the loan had been advanced was lost and the surety who had undertaken to repay the loan would be discharged in entirety because the creditor had lost the goods on account of negligence. The Honble Judges of the Supreme Court in this judgment relied upon the principle of section 141 of the Indian Contract Act, which reads as follow : "141. A surety is entitled to the benefit of every security which the creditor has against the principal debtor at the time when the contract of surety ship is entered into, whether the surety knows of the existence of such security or not; and if the creditor loses or without the consent of the surety parts with such security the security is discharged to the extent of the value of the security”. The Honble Judges observed that the principal debtor had offered two securities (i) pledge of goods and (ii) personal guarantee of surety at the time of advancing the loan. The surety gave the personal guarantee on the specific under standing and with full knowledge of the bank that the principal debtor was offering another security, namely, pledge of goods. The security contracted on the good faith of the principal contract when entering into contract of guarantee in which case he is deemed so to contract that both the securities would be available to the creditor. The learned Judges found as a matter of fact that the goods had been pledged with the bank but they were lost due to the negligence of the bank. In these circumstances it was held that the liability of surety is discharged. 19. The facts of this judgment are, therefore, distinguishable and cannot be made applicable to the facts of the present case because in the present case it were defendants 3 and 4 who had offered to create an equitable mortgage and had, in fact, created an equitable mortgage by depositing their title deeds There is no proof that any goods were ever pledged with the plaintiff-bank be fore advancing the loans or that the plaintiff-bank over lost such pledged goods due to their negligence. In fact, no goods were ever pledged and the possession of any goods was never taken by the plaintiff-bank. It was more or less on the basis of the equitable mortgage created by defendants 3 and 4 and the pronotes as well as the hypothecation deeds that the loans were advanced to defendant 1 and 2. Defendants 3 and 4 knew about all these facts regarding the advancement of loans and also about the fact that the possession of the goods was not taken by the plaintiff of the time of advancement of loan. Hence the defendants Nos. 3 and 4 cannot get any help from the judgment in State Bank of Saurashtra case (supra). 20. Defendants 3 and 4 have not proved that the terms of the contract/ agreement were ever varied by the plaintiff and defendants 1 and 2 without their knowledge or consent. In such circumstances, it cannot be said that the liability of defendants 3 and 4 for the repayment of loan as guarantors/sureties is discharged. 20. Defendants 3 and 4 have not proved that the terms of the contract/ agreement were ever varied by the plaintiff and defendants 1 and 2 without their knowledge or consent. In such circumstances, it cannot be said that the liability of defendants 3 and 4 for the repayment of loan as guarantors/sureties is discharged. Thus issue No. 3 is decided against defendants 3 and 4. 21. In view of copy of notification No. 5/73-Rev. A, dated 22nd May, 1976 the execution of an equitable mortgage by deposit of title deeds is permissible in Simla. The learned counsel for defendants 3 and 4 could not show me any law as how this mortgage is void for want of stamp and registration In these circumstances issue No. 4 is also decided against defendants 3 and 4. 22. On the point of limitation (issue No. 2) also defendants 3 and 4 cannot succeed. Defendants 3 and 4 by sending the letter, Exhibit P. 11, have admitted their liability for the repayment of the loan and also admitted that they were the guarantors for the repayment of the loan which was advanced to defendants I and 2 till then. This guarantee of defendants 3 and 4 could only cease to exist after 14th September, 1979 and no earlier. The amount claimed by the plaintiff pertains to a period prior to 14th September, 1979 and the liability of the defendants is thus not absolved for this loan. Defendants 1 and 2 admitted the loan by executing the revival letter of 29th December, 1978 (exhibit P. 10) and at that time also defendants 3 and 4 were the guarantors. Hence the suit against defendants 3 and 4 is within time. 23. The facts in Diyalu Mal v. Naudu Shah Dev Rai and others, [AIR 1931 Lahore 691] are distinguishable because in that case the surety was not held liable as the surety had not allowed himself to be represented by the person who made the payment, 24. In V. Somanath Raju and another v. Konchada Ramamurty Subudhi and others, [AIR 1957 Orissa 106] it is held that a surety is liable for the re payment of a loan if the principal debtor admits the liability by an acknowledgment and the surety is an existing surety at the time of the said acknowledgment. 25. In V. Somanath Raju and another v. Konchada Ramamurty Subudhi and others, [AIR 1957 Orissa 106] it is held that a surety is liable for the re payment of a loan if the principal debtor admits the liability by an acknowledgment and the surety is an existing surety at the time of the said acknowledgment. 25. In view of the above discussion, the suit against defendants 3 and 4 is within time, Issue No. 2 is decided against defendants 3 and 4. ISSUE NO. 5. 26. This issue was not contested by the learned counsel for the defendants. The plaintiff has filed the statement of accounts Exhibit P. 21,and according to this statement the amount clue upto 27th February, 1981 is Rs 1,20,113-36. 1 his amount has been calculated in accordance with the terms and conditions accepted by the parties. The plaintiff is entitled to recover this amount from the principal debtors as well as the sureties and all of them are jointly and severally liable for the repayment of this amount. ISSUE NO. 6. 27. Defendants 1 and 2 have claimed that they may be allowed to pay the amount by instalments. There is no evidence on record to show as to why defendants 1 and 2 be allowed to pay the amount by instalments. This issue is thus decided against defendants I and 2. ISSUE NO. 7. 28. As as result of my findings on various issues, the plaintiffs suit for recovery of Rs. 1,20,113 36 with costs is decreed against all the defendants. As the transaction is a Commercial transaction, therefore, the plaintiff is also allowed interest at the rate of 20% per annum from 28th February, 198l (dale of the suit) title the realization of the decretal amount. The defendants are allowed a period of three months to pay the decretal amount and in case of default in payment, the plaintiff can also apply for sale of the property mortgaged by defendants 3 and 4 by deposit of title deeds. Order accordingly