Judgment : M. Y. EQBAL, J. ( 1 ) IN this writ application the petitioner has challenged the validity of the letter bearing No. TA/est/116 dt. 31-1-2000 whereby rental dues in respect of quarter in occupation of respondent No. 6 has been sought to be recovered from the petitioner and also for quashing the letter dt. 29-3-2000 whereby petitioners representation has been rejected on the ground that the petitioners oblication as a guarantor can only be nullified either by substitution of other guarantor or vacation of the quarter by respondent No. 6. ( 2 ) THE facts of the case lie in a narrow compass : The petitioner is an engineer and he is in the employment of the respondent-Heavy Engineering Corporation (in short Corporation ). In 1994 the Corporation came out with a circular being Circular No. 1/94 dt. 10-1-94 for the purpose of allotting residential quarters on lease and licence basis to those employees who have been relieved under Voluntary Retirement Scheme. The period of allotment was fixed for maximum of 11 months subject to the condition that a person must stand as a guarantor and execute surety bond. Under the said scheme respondent No. 6 was allotted quarter for a period of 11 months effective from 3/03/1994 and the petitioner became the guarantor and executed bond for the said period of licence. The said agreement was again renewed for a period of 11 months and a fresh bond was executed by the petitioner on 8-1-96 which expired on 7-12-96. Petitioners case is that after expiry of the said period of licence i. e. 7-12-96 respondent No. 6 again approached the petitioner to become guarantor and execute a fresh bond but the petitioner refused to continue as a guarantor. However, even after expiry of the licence-period the respondent No. 6 was allowed to continue in the quarter without renewal of the licence agreement. It is stated by the petitioner that he, by his letter dated 23-10-98, informed the respondent-Corporation that respondent No. 6 has attained the age of 58 years and 5 months and he was not liable as a guarantor if respondent No. 6 is allowed to continue in the quarter. It is stated by the petitioner that he, by his letter dated 23-10-98, informed the respondent-Corporation that respondent No. 6 has attained the age of 58 years and 5 months and he was not liable as a guarantor if respondent No. 6 is allowed to continue in the quarter. In July, 1999 the petitioner received a letter dated 31-7-99 which was addressed to respondent No. 6 wherein the Corporation allowed respondent No. 6 to renew the lease and licence agreement upto the age of 60 years and 3 months. In the year, 2000 the petitioner received a letter dated 31-1-2000 whereby the petitioner was informed that respondent No. 6 had not paid the monthly rental dues and there was a total outstanding of Rs. 70,080. 50 paise. The petitioner was also informed that the aforesaid amount is being recovered from his salary bill in view of his status as a guarantor in terms of Circular No. 1/94. The petitioner seriously opposed the said action of the Corporation by filing a representation which, however, was rejected and the order of rejection was communicated vide letter dated 29-3-2000. ( 3 ) THE respondents case in the counter affidavit is that after expiry of leave and licence agreement on 7-2-96 the petitioner again executed a surety bond on 26-3-96 for extention of leave and licence. The petitioner again executed surety bond on 29-7-97 in favour of the licensee for further extension of leave and licence agreement. Copies of these surety bond have been annexed as Annexure Aand Bto the counter affidavit. Respondents further case is that the petitioner himself submitted surety bond on 29-7-97 and, therefore, he is liable under the surety bond. It is stated that the licensee was repeatedly directed to renew the agreement and vacate the quarter but the licensee neither substituted the guarantor nor vacate the quarter. Hence the liability of the petitioner remains till the vacation of the quarter by the licensee. ( 4 ) BEFORE appreciating the case of the parties first of all I will refer some of the documents which are relevant to decide the issue involved in this writ application. Annexure 1 is a copy of circular No. 1/94. The said circular lays down the terms and conditions for allotment of quarters to those who were granted voluntary retirement. Annexure 1 is a copy of circular No. 1/94. The said circular lays down the terms and conditions for allotment of quarters to those who were granted voluntary retirement. One of the conditions was that the allotment of quarter will be for a maximum period of 11 months but in no case beyond the age of 58 years 5 months. Further condition was that a serving employee of the Corporation with minimum of three years of balance service, shall be required to stand as a guarantor and execute a surety bond authorising the Corporation to deduct and recover from his salary the dues, as the case may be, payable to the Corporation by the licensee in case of any violation on the part of the licensee. It further provides that the dues of such employees who become guarantor, will be cleared on superannuation only after his obligation as a guarantor is nullified either by substituting another guarantor or vacation of quarter by the licensee. Clause (3) of Circular 1/94 reads as under :-"3. A serving employee of the Corporation with minimum three years balance service shall be required to stand as guarantor and excute a surety bond (in the format as at Annexure 111) authorising the Corporation to deduct and recover from his salary and dues, such amount that may be due and payable to the Corporation by the licensee in case of any failure on the part of the licensee. No employee can stand quarantor for the above purpose for more than one case. Also, the dues of such employees on superannuation or otherwise shall be cleared only after his obligation as guarantor is nullified either by substituting another guarantor or vacation of quarter by the licensee. "4. Annexure A and B to the counter affidavit are the two surety bonds executed by the petitioner, one on 26-3-1996 and another on 29-7-1997. Admittedly no surety bond was executed by the petitioner after 29-7-1997. In para 8 and 9 of the writ petition it has been categorically stated by the petitioner that the first lease and licence agreement for a period of 11 months beginning from 8-3-1995 to 7-1-1996 was executed by respondent No. 6 and for the aforesaid period he was made guarantor. In para 8 and 9 of the writ petition it has been categorically stated by the petitioner that the first lease and licence agreement for a period of 11 months beginning from 8-3-1995 to 7-1-1996 was executed by respondent No. 6 and for the aforesaid period he was made guarantor. It is further stated that the said licenced period expired on 7-1-1996 and a fresh licence agreement was executed for a period of 11 months and the petitioner again became quarantor in terms of the aforesaid circular. These paras have not been disputed by the respondents in their counter affidavit, Paras 8 and 9 of the counter affidavit read as under:-"8. That with reference to the statements made in para 8 of the writ application I say that guarantee bonds executed by the petitioner in favour of the licensee is detailed as hereunder :-- sl. No. Name of guarantor period of leave and licence enewed dt. of execution of bond. 1. Sri T. K. Dey, PNo. 87749 Manager (Pur) FFP. 08-03-95-07-02-97 bond exe cuted on 6-3-95. 2. Sri T. K. Dey, P. No. 87749 Manager (Pur) FFP. Guarantor bond executed on 26-3-96 3. Do. Do. on 29-7-97. (9) That the statements made in para 9 of the writ application is matter of record hence need no comments. "@@@ ( 5 ) HOWEVER, in para 14 of the counter-affidavit it is stated by the respondents that after expiry of the licence period on 7-12-1996 the petitioner executed a fresh surety bond on 29-7-1997. In para 21 of the counter-affidavit it is stated that respondent No. 6, the licensee was repeatedly directed to renew the agreement and vacate the quarter but respondent No. 6 neither substituted another guarantor nor vacated the quarter. Hence the liability of the petitioner remains till the vacation of the quarter by the licensee. ( 6 ) AS noticed above for the first leave and licence agreement for a period of 11 months beginning from 8-3-1995 to 7-1-1996 the petitioner executed surety bond on 26-3-1996. The leave and licence agreement was, however, extended in favour of respondent No. 6 for a period of 11 months and against that the petitioner executed a fresh surety bond on 29-7-1997. A copy of the surety bond dated 29-7-1997 has been filed and annexed by the respondent-Corporation as Annexures A and B to the counter affidavit. The leave and licence agreement was, however, extended in favour of respondent No. 6 for a period of 11 months and against that the petitioner executed a fresh surety bond on 29-7-1997. A copy of the surety bond dated 29-7-1997 has been filed and annexed by the respondent-Corporation as Annexures A and B to the counter affidavit. This surety bond, therefore, is the basis for taking action against the petitioner by the Corporation for recovery of the rent lying due against respondent No. 6. It is, therefore, necessary to reproduce the surety bond (Anenxure B) dated 29-7-1997 which reads as under :-"guarantee to be executed by employee having minimum three years of service. I, T. K. Dey P. No. 87749 working on the post of Dy. Manager (P) /psd/ffp and permanent resident of village /mohalla CD 40, Sector III, P. O. Dhurwa , P. S. Jagannath Nagar Dist. Ranchi, State Bihar do hereby undertake to pay amounts due and payable to Heavy Engineering Corporation Ltd. in consideration of the Corporation having allotted Quarters No. CD 38 Sector III to Shri R. N. Sinha, EDM/psd P. No. 11962 an ex-employee of the Corporation on Leave and Licence basis and authorise the Corporation to deduct such sum/sums from my salary and dues that may be payable to me either in instalments or in one lump sum, as the Corporation may deem fit and proper in case the licensee fails to pay the dues to the Corporation in time. Sd/- witness Signature of Guarantor 1. Signature : Sd/- Name : T. K. Dey full Name : S. C. P. Sinha P. No. : 87749 deptt. / shop : PSD/bh 26 Deptt. No. 2201 plant : FFP Shop : PSD 2. Signature : Sd/- Plant : FFP full Name : M. L. Gupta Date of Super- p. No. : 18187 annuation 04/2016 deptt. / shop : PSD/ffp plant : certified that the Guarantor and the two witnesses have signed in my presence and the date of retirement of Guarantor verified and found correct. Signature of JM/ (P) name : Sd/- " ( 7 ) FROM bare perusal of the aforesaid bond it is clear that the petitioner undertook to pay the amount of rent that may be found due and payable for the enjoyment of the quarter by respondent No. 6 on leave and licence basis. Signature of JM/ (P) name : Sd/- " ( 7 ) FROM bare perusal of the aforesaid bond it is clear that the petitioner undertook to pay the amount of rent that may be found due and payable for the enjoyment of the quarter by respondent No. 6 on leave and licence basis. In other words the petitioner bound himself under the said surety bond for recovery of rent, if found due and payable by respondent No. 6 for the extended period of leave and licence of 11 months. This can be safely presumed for the reason that under the scheme (Annexure 1), allotment cannot and shall not in any case will exceed for a period of more than 11 months. It is, therefore, held that under the said surety bond dated 29-7-1997 the petitioner would be liable to pay to the Corporation the dues on account of rent for the extended period of 11 months from the date of expiry of the first leave and licence agreement dated 7-2-1996. ( 8 ) FROM perusal of the impugned demand notice dated 31-1-2000 it appears that the Corporation claims a sum of Rs. 70080. 50 paise being the amount of dues as on Sept. 1999. However, in paragaph 23 of the counter affidavit it is stated by the respondent that a sum of Rs. 20,400. 50 paise only is lying due against respondent No. 1 upto April 2000, Paragraph 23 of the counter affidavit reads as follows :-"23. That with reference to the statements made in paragraph 23 of the writ application, I say that letter No. 116 dated 31-1-2000, projects the true picture of the dues and action taken by the licensee. However, the dues position has since been changed and it is not Rs. 70,080,50 as on Sept. 99, but only Rs. 20,400. 50 upto April 2000. " ( 9 ) IT is, therefore, clear that the Corporation is not claiming any amount of rent for the period of 11 months for which the surety bond was executed by the petitioner. In such circumstance and also regard being had to the statement made in paragraph 23 of the counter affidavit I am of the opinion that the impugned notice dated 31-1-2000 cannot be sustained in law. In such circumstance and also regard being had to the statement made in paragraph 23 of the counter affidavit I am of the opinion that the impugned notice dated 31-1-2000 cannot be sustained in law. ( 10 ) IT is well settled that the question whether a guarantee is enforceable or not depends upon the terms under which the guarantor bound himself. It has not been disputed by the respondent-Corporation that the allotment of the quarter was made to respondent No. 6 on leave and licence basis and extension was made only for a period of 11 months. The petitioner, therefore, bound himself under the surety bond to pay rent if it becomes due for the period of 11 months and not beyond that. In the case of State of Maharashtra v. Dr. M. N. Kaul reported in AIR 1967 SC 1634 , the Supreme Court while interpreting the limit of guarnatee and liability of the guarantor held as under :-"the question is whether this guarantee is enforceable. That depends upon the terms under which the guarantor bound himself. Under the law he cannot be made liable for more than he has undertaken. It is often said that a surety is a favoured debtor, for in the expressive phrase of Lord Westbury L. C. in Blest v. Brown, (1862) 4 De GF and J 367 at p. 376 : "you bind him to the letter of his engagement. "beyond the proper interpretation of that engagement you have no hold upon him. " these obsevations have been recalled in cases of of guarantee and suretyship by the Judicial Committee and also this Court. See for example Pratapsing Moholalbhai v. Keshavlal Harilal Setalvad, 62 Ind App 23 at p 33 and M. S. Anirudhan v. / Thomcos Bank Ltd. , 1963 Supp 1 SCR 63 at p 77. To this there are some exceptions. in case of ambiguity when all other rules of construction fail, the Course interpret the guarnatee contra proferentem that is, against the guarantor or use the recitals to control the meaning of the operative part where that is possible. But whatever the mode employeed, the cardinal rule is that the quarantor must not be made liable beyond the terms of his engagement. But whatever the mode employeed, the cardinal rule is that the quarantor must not be made liable beyond the terms of his engagement. " ( 11 ) HAVING considered the entire facts and circumstances of the case as also the law discussed hereinabove I am of the opinion that the impugned demand notice for recovery of the dues of rent from the petitioner is illegal and unwarranted in law. This application is therefore, allowed and the impugned notice and the action of the respondents are set aside. Application allowed. --- *** --- .