JUDGMENT R.L. Khurana, J.—The present suit has been filed by the plaintiff, H.P. State Industrial Development Corporation Limited, against the seven defendants for the recovery of Rs. 1,35,20,682.55 paise, with future interest at the rate of 15.5% per annum. 2. Defendant No. 1, Messrs. Kraft Paper Mills (P) Ltd., is a private limited company duly incorporated under the Companies Act, 1956. Defendants No. 2 to 7 are/were the Directors thereof. In the present case, they have been impleaded and are being sued in their capacity of being the guarantors in respect of the loans granted by the plaintiff to the defendant No. 1 company. 3. The following six loans were granted by the plaintiff to defendant No. 1 : (i) First loan of Rs, 27,45,000 on 19.5.1984 vide agreement Ex. PW1/A; (ii) Second loan of Rs. 42,17,000 on 16.11.1985 vide agreement Ex. PW 1/B; (iii) Third loan of Rs. 3,00,000 on 15.2.1986 vide agreement Ex. PW1/C; (iv) Fourth loan of Rs. 1,55,000 on 3.4.1986 in the form of equity assistance; (v) Fifth loan of Rs. 18,38,000 on 21.9.1989 vide agreement Ex. PW 1/D; and (vi) Sixth loan of Rs. 2,00,000 on 6.3.1990 vide agreement Ex. DW 1/E. 4. The above said loans alongwith interest were repayable according to the "schedule of repayment" attached to each agreement of loan by way of half yearly instalments. 5. The defendants 2 to 7 furnished their personal guarantees for the repayment of the above loans as under: First loan of Rs. 27,45,000. (i) Defendants No. 2, 6, 7 and one Anil Kakkar vide guarantee deed Ex. PW 1/L; and (ii) Defendants No. 2 to 5 vide guarantee deed Ex. PW 1/M. Second loan of Rs. 42,17,000. Defendants No. 2 to 5 vide guarantee deed Ex. PW 1/N. Third loan of Rs. 3,00,000. Defendants No. 2 to 5 vide guarantee deed Ex. PW I/O. Fourth loan of Rs. 1,55,000. No guarantee furnished by any of the seven defendants. Fifth loan of Rs. 18,38,000. (i) Defendants No. 2 and 3 vide guarantee deed Ex. PW 1/ P; and (ii) Defendants No. 4 and 5 vide guarantee deed Ex. PW 1/Q. Sixth loan of Rs. 2,00,000. (i) Defendants No. 2 and 3 vide guarantee deed Ex. PW 1/ R; and (ii) Defendants No. 4 and-5 vide guarantee deed Ex. PW 1/S. 6. 18,38,000. (i) Defendants No. 2 and 3 vide guarantee deed Ex. PW 1/ P; and (ii) Defendants No. 4 and 5 vide guarantee deed Ex. PW 1/Q. Sixth loan of Rs. 2,00,000. (i) Defendants No. 2 and 3 vide guarantee deed Ex. PW 1/ R; and (ii) Defendants No. 4 and-5 vide guarantee deed Ex. PW 1/S. 6. Since the defendants failed to repay the loan amounts and the interest thereon in terms of the "payment schedule" inspite of demands and registered notices, the plaintiff on 30.11.1991 acting under Section 29 of the State Financial Corporations Act, 1951, took over the hypothecated assets of the defendant No. 1 in pursuance of the notice dated 17,10.1991. 7. The assets of the defendant No. 1, taken over by the plaintiff, were then sold by the plaintiff to one Shri R.K. Nahta of Messrs. SJM Paper Mills (P) Ltd., for a consideration of Rs. 1,00,00,000. The defendant No. 1 had also taken financial assistance in the form of loan(s) from the H.P. Financial Corporation. Therefore, the sale proceeds of Rs. 1,00,00,000 were shared by the plaintiff and H.P. Financial Corporation to the extent of Rs. 69,71,988 and Rs. 30,38,012 respectively. 8. According to the plaintiffs after adjusting the amount of Rs. 69,61,988 towards the amount due from the defendants under the above said loans, a sum of Rs. 1,33,65,682.55 paise towards principal and interest is till due from the defendants, which they have failed to pay inspite of registered notice dated 20.4.1993. Hence, the present suit was instituted on 17.8.1993. 9. Since no appearance was put in on behalf of defendants No. 1 to 5 inspite of service, they were ordered to be proceeded against ex parte. The suit is thus being resisted and contested only by defendants No. 6 and 7. 10. Defendant No. 6 in his written statement has denied the loans as well as the execution of the various loan agreements. He has, however, admitted that the guarantee deed dated 19.5.1984 Ex. PW 1/L was executed by him besides defendants No. 2 and 7, and one Anil Kakkar. He also admitted that he was a Director of the defendant No. 1 company. He has, however, admitted that the guarantee deed dated 19.5.1984 Ex. PW 1/L was executed by him besides defendants No. 2 and 7, and one Anil Kakkar. He also admitted that he was a Director of the defendant No. 1 company. It was pleaded that he had ceased to be a Director of the defendant No. 1 company with effect from 7.2.1985 and that he had revoked the guarantee furnished by him under due intimation to the plaintiff as well as defendant No. 1 and that it was only after the revocation of the guarantee by him that the plaintiff had obtained a fresh guarantee Ex. PW 1/M from the defendants No. 2 to 5. He denied his liability. Objections as to absence of cause of action, the suit being bad for non-joinder of parties, limitation and estoppel were further raised. 10. Though a separate written statement has been filed by defendant No. 7, the case set up by her in defence is exactly the same as set up by defendant No. 6 in his written statement. On the pleadings of the parties, following issues were framed on 7.9.1998 and 20,7.2000:— 1. Whether the plaint does not disclose any cause of action against the defendants 6 and 7 as alleged? OPD 2. Whether the suit is bad for non-joinder of Anil Kakkar as alleged? OPD 3. Whether the suit is within time? OPP 4. To what amount, if any, is the plaintiff entitled to recover and if so from whom and to what extent? OPP 4-A. Whether the plaintiff Corporation is estopped by its acts, deed, conduct, delay and latches from filing the present suit? OPD 5. Relief. 11. The parties have led oral as well as documentary evidence. I have heard the learned Counsel for the parties and have also gone through the record of the case. 12. At the very outset it may be stated that insofar as the fifth loan dated 3.4.1986 in the form of equity assistance is concerned, no document in respect thereof either in the form of agreement or in the form of guarantee deed or deed of hypothecation or in the form of a receipt showing actual disbursement thereof has been placed on the record of the present case. PW 1 Shri Pawan Kumar Bali, Manager (Projects) of the plaintiff, has only deposed that an equity of Rs. PW 1 Shri Pawan Kumar Bali, Manager (Projects) of the plaintiff, has only deposed that an equity of Rs. 1,55,000 was sanctioned in favour of defendant No. 1. There is nothing on the record to show that such equity of Rs. 1,55,000 was actually paid and disbursed to the defendant No. 1 and if so, on what terms and conditions. Nor there is any evidence to show that such equity was repayable and if so, in what manner. Admittedly, none of the defendants No. 2 to 7 had furnished their personal guarantee qua this amount. Therefore, in the absence of relevant evidence with regard to this loan of Rs. 1,55,000 in the form of equity assistance, the claim with regard thereto shall have to be excluded from consideration in the present case. Only the remaining five loans are required to be considered, while recording issue wise findings. Issue No. 2. 13. It is the admitted case of the plaintiff that the guarantee deed Ex. PW 1/L in respect of the first loan of Rs. 27,45,000 was executed by defendants No. 2, 6 and 7 and one Shri Anil Kakkar. Admittedly, Anil Kakkar, above named and one of the guarantors, has not been impleaded as a party to the present suit. 14. The contention raised on behalf of defendants No. 6 and 7 is that the said Anil Kakkar being one of the guarantors alongwith defendants No. 2, 6 and 7 vide Ex. PW 1/L, is a necessary party to the suit and on the failure of the plaintiff to implead him, the present suit is bad and is liable to be dismissed on this short ground alone. 15. There is no denying that the liability of the guarantors, namely, defendants No. 2, 6, 7 and Anil Kakkar, under the guarantee deed Ex. PW 1/L is joint and several. Section 13S, Contract Act, 1872, provides:— "Where there are co-sureties, a release by the creditor of one of them does not discharge the others; neither does it free the surety so released from responsibility to the other sureties." 16. The liability of the sureties under the law is joint and several. Therefore, it is open to a creditor to enforce the surety against some of the joint sureties. The suit brought by a creditor against some of the sureties only would not be bad. 17. The liability of the sureties under the law is joint and several. Therefore, it is open to a creditor to enforce the surety against some of the joint sureties. The suit brought by a creditor against some of the sureties only would not be bad. 17. In United Bank of India v. Modern Stores (India) Ltd. and others, AIR 1988 Calcutta 18, a suit for recovery of the outstanding amount was filed by the Bank against the principle debtor, a company, and sureties. During the pendency of the suit the principal debtor company went into dissolution and four of the sureties died, whose legal representatives were not brought on the record and the suit as against the deceased sureties was allowed to abate. The trial court dismissed the suit on the ground that after leaving out the principal debtor and also some of the guarantors, the plaintiff could not proceed with the suit against the remaining guarantors. On an appeal being carried before a Division Bench of the Calcutta High Court, dismissal of the appeal was set aside. It was held:— (a) mere omission to sue the principal debtor or to proceed against the principal debtor in the suit will not operate as a discharge of the sureties; and (b) in view of Section 138 of the Contract Act if a plaintiff has chosen not to proceed against one or other of the sureties but has chosen to proceed against the rest, then the release of one or the other co-sureties by the plaintiff will not free the guarantors so released from his responsibility to the other sureties. The suit against other sureties would be competent and maintainable. 18. Therefore, even though Anil Kakkar was one of the co-guarantor alongwith the defendants No. 2, 6 and 7, he is neither a proper nor a necessary party to the present suit since under the law the plaintiff has the option and discretion to proceed against any one of the guarantors to enforce their joint and several liability. The issue is therefore, decided against the defendants. Issue No. 3. 19. The five loans granted to the defendant No. 1 vide agreements Ex. PW I/A, PW 1/B, PW 1/C, PW 1/D and PW 1/E were repayable alongwith interest in half yearly instalments as per the "repayment schedule" annexed to each of these agreements as under :— (i) First loan of Rs. 27,25,000. Issue No. 3. 19. The five loans granted to the defendant No. 1 vide agreements Ex. PW I/A, PW 1/B, PW 1/C, PW 1/D and PW 1/E were repayable alongwith interest in half yearly instalments as per the "repayment schedule" annexed to each of these agreements as under :— (i) First loan of Rs. 27,25,000. First instalment was payable on 10.9.1987 and the last instalment was to be paid on 10.3.1994. (ii) Second loan of Rs. 42,17,000. First instalment was pa3able on 10.9.1987 and the last instalment was payable on 10.3,1994. (iii) Third loan of Rs. 3,00,000. First instalment was payable on 10.6 1990 and the last instalment was payable on 10.2.1995. (iv) Fifth loan of Rs. 18,38,000. 20. First instalment was payable on 10.9.1993 and the last instalment was to be paid by 10.3.2000, (v) Sixth loan of Rs. 2,00,000. 21. First instalment was to be paid on 10.3.1993 and the last instalment was to be paid on 10.3.2000. Clause (2) of Part I of the agreements Ex. PW I/A to PW 1/E provides : “The company shall repay the loan amount (irrespective of the dates of withdrawal) in accordance with the repayment schedule and subject to other terms and conditions of these presents” Clause (5) of Part VIII of the agreements referred to above further provides : “If a default shall have occurred in the payment of principal or interest on any other payment required under this agreement or in any of the events mentioned in sub-clause (2) hereof HPSIDC may at its option, by notice in writing to the company declare the principal of the loan amount then outstanding to be due and payable immediately and upon such declaration the security referred to in Schedule III hereto shall become enforceable and such principal, interest and other monies payable under this agreement shall become due and payable immediately, notwithstanding anything in this agreement and/or in any other document(s). The HPSIDC will be entitled to take any action as is available to it under the Agreement and the provisions of the Companys Act, 1955 as amended from time to time”(Emphasis supplied) 22. Thus, under the above clause a discretion has been given to the plaintiff either to enforce the payment of the amount in respect of which a default has been committed or by a notice in writing recall the entire loan and enforce its immediate payment. 23. Thus, under the above clause a discretion has been given to the plaintiff either to enforce the payment of the amount in respect of which a default has been committed or by a notice in writing recall the entire loan and enforce its immediate payment. 23. Notice Ex. PW 1/T was given by the plaintiff in the present case recalling the loans and calling upon the defendant No. 1 to repay the outstanding amounts of the loans alongwith interest. 24. The amount in suit, thus, become payable on the date of notice Ex. PW 1/T, that is, on 27.8,1991. The cause of action, thus, arose to the plaintiff on such date. The present suit was filed on 17.8.1993, that is, within the prescribed period of limitation of three years. Therefore, the same is within time. The issue is decided in favour of the plaintiff. Issue No. 4. 25. As stated above, the present suit is being resisted and contested only by defendants No. 6 and 7. Defendants No. 1 to 5 on their having failed to put in appearance inspite of service are being proceeded against ex parte. 26. It is the admitted case of the plaintiff and it has also come in evidence that defendants No. 6 and 7 alongwith defendant No. 2 and one Anil Kakkar furnished their guarantee Ex. PW 1/L only in respect of the present loan of Rs. 27,45,000 sanctioned in favour of defendant No. 1 vide agreement Ex. PW I/A 27. It is also the admitted case of the plaintiff that after the unit of defendant No. 1 was taken over by the plaintiff under Section 29 of the State Financial Corporations Act, 1951, such unit was sold for Rs. 1,00,00,000. Out of such sale consideration, a sum of Rs. 69,61,988 was received by the plaintiff, while the balance of Rs. 30.38,012 was appropriated by the H.P. Financial Corporation from whom also the defendant No. 1 had taken financial assistance in the form of loan(s). 28. The plaintiff in para 10 in its replication dated 5,3.1998 has admitted as under : "It is also admitted that principal amount of Rs. 27.45 lacs has been adjusted but the interest amount of Rs. 17,58,438 is recoverable in this account alongwith further interest at the rate of 15.5% per annum from 10.3.1993 onwards from the defendants No. 6 and 7." 29. 27.45 lacs has been adjusted but the interest amount of Rs. 17,58,438 is recoverable in this account alongwith further interest at the rate of 15.5% per annum from 10.3.1993 onwards from the defendants No. 6 and 7." 29. As per the statement of account Ex. PW 2/B, the principal amount of the first loan, that is, Rs. 27,45,000 is shown to have been adjusted on 11.2.1993, though in fact a sum of Rs. 69,61,988 was available with the plaintiff for adjustment. 30. There is no evidence forthcoming by the plaintiff as in what manner, the amount of Rs. 69,61,988 was appropriated/adjusted by it against the outstanding amounts of loans. The plaintiff has averred in para 8 of its plaint as under: "That after the adjustment of the sale proceeds between the plaintiff and H.P. Financial Corporation (Co-financer) in proportion to term loans, there was a shortfall to the tune of Rs. 1,33,65,682.55 for the payment of which defendants No. 2 to 7 being guarantors, are liable to pay to the plaintiff. Defendants No. 2 to 7 were asked to pay the balance amount of Rs. 1,33,65,682.55 including interest upto 9.3.1993 vide legal notice No. HPSIDC/PAC 37/1471-84 dated 20th April, 1993 within one month from the receipt of this notice. Although the same period has expired, but the defendants have not cared to pay the same." 31. A bare reading of the above pleadings shows that the whole amount of Rs. 69,61,988 received by the plaintiff from the sale proceeds of the unit of defendant No. 1 appears to have been adjusted against the consolidated amounts of all the six loans and the suit amount of Rs. 1,33,65,682.55 paise has been calculated on its basis. 32. Section 61, Contract Act, 1872 provides that payment of the amount is to be applied in discharge of the debts in order of time, whether they are or are not barred by the law in force for the time as to the limitation of suits. If the debts are of equal standing, the payment shall be applied in discharge of each proportionately. 33. If the debts are of equal standing, the payment shall be applied in discharge of each proportionately. 33. In Sha Manmall Misrimall v. K. Radhakrishnan, AIR 1972 Madras 108, and in A Ramavel v. M/s. Pandyan Automobiles Pvt Ltd., AIR 1973 Madras 359, it has been held that in the absence of anything to show that a repayment was towards any particular debt the court is entitled to appropriate it towards the earliest outstanding debt, irrespective of its being in time or not. 34. Following the said principle, the amount of Rs. 69,61,988 received by the plaintiff was required to be appropriated by it towards the amount due under the first loan being the earliest in point of time. As per the plaintiffs own case a sum of Rs. 45,03,438 was due from defendant No. 1 under the first loan as under: (a) Principal amount Rs. 27,45,000 (b) Interest Rs. 17,58,438 35. Appropriating the amount available to the plaintiff towards such outstanding amount, under the first loan, the entire amount would be deemed to have been paid and the first loan stood discharged. As stated above, the plaintiff appropriated the amount available to it only towards the principal amount, which act on its part was wrong. 36. Once it is held that the first loan stood discharged, the defendants No. 1 to 7 are not liable in respect of the first loan granted vide agreement Ex. PW I/A. 37. The second loan of Rs. 42,17,000 was granted to defendant No. 1 vide Ex. PW 1/Bon 16.11.1985. As per the statement of account Ex. PW 2/B a sum of Rs. 76,18,245 towards principal and interest was outstanding under this loan from the defendant No. 1. Defendants No. 2 to 5 had furnished their personal guarantee Ex. PW 1/N in respect of this loan. 38. After adjusting the outstanding amount under the first loan, a sum of Rs. 24,58,550 was still available to it, out of the amount of Rs. 69,61,988 received by it from the sale proceeds of the unit of defendant No. 1, for adjustment towards the outstanding amount under the second loan. So adjusting, a sum of Rs. 51,59,695 would remain outstanding under the second loan, which the defendant No. 1 as principal debtor and defendants No. 2 to 5 as guarantors are liable to pay 39. 69,61,988 received by it from the sale proceeds of the unit of defendant No. 1, for adjustment towards the outstanding amount under the second loan. So adjusting, a sum of Rs. 51,59,695 would remain outstanding under the second loan, which the defendant No. 1 as principal debtor and defendants No. 2 to 5 as guarantors are liable to pay 39. Evidence has come on the record to show that defendants No. 2 to 5 had also furnished their personal guarantees in respect of the third, fifth and sixth loan vide Ex. PW I/O, PW 1/P, PW 1/ Q, PW 1/R and PW 1/S. 40. The third loan of Rs. 3,00,000 was granted to the defendant No. 1 vide agreement Ex. PW 1/C on the personal guarantee of defendants No. 2 to 5. Such loan carried interest at the rate of 12.5.% per annum with half yearly rests. 41. Though the plaintiff has placed on record the loan agreement Ex. PW I/A and the guarantee deed Ex. PW I/O, no evidence is available to show as to when such amount was disbursed to the defendant No. 1. So much so that even the statement of account in respect of such loan has not been proved/placed on the record. PW 1 Shri Pawan Kumar Bali, Manager (Projects) of the plaintiff Corporation, has stated in respect of this loan only to the following effect : "Agreement dated 15.2.1986 in respect of soft loan of Rs. 3,00,000 was executed by defendants No. 2 to 4 in favour of the plaintiff corporation in my presence. Copy thereof is Ex. PW 1/C." 42. He has not stated whether the amount of this loan was actually disbursed to the defendant No. 1 and, if so, when or that as to what amount was due from the defendants No. 1 to 5 as on the date of suit. In the absence of relevant evidence, the plaintiff is not entitled to recover any amount under the loan agreement Ex. PW 1/C. 43- The fifth loan of Rs. 13,38,000 was given to the defendant No. 1 vide agreement Ex. PW 1/D against the personal guarantees Ex. PW 1/P and PW 1/Q of the defendants No. 2 to 5. The sixth loan of Rs. 2,00,000 vide Ex. PW 1/E was granted to defendant No. 1 for which defendants No, 2 to 5 had furnished their personal guarantees Ex. 13,38,000 was given to the defendant No. 1 vide agreement Ex. PW 1/D against the personal guarantees Ex. PW 1/P and PW 1/Q of the defendants No. 2 to 5. The sixth loan of Rs. 2,00,000 vide Ex. PW 1/E was granted to defendant No. 1 for which defendants No, 2 to 5 had furnished their personal guarantees Ex. PW 1/R and PW 1/S. 43. A joint statement of account in respect of these two loans (Ex. PW 2/B) has been placed on record. A perusal of the same shows that a sum of Rs. 31,55,875 (Rs. 20,38,000 as principal and Rs. 11,17,875 as interest) was due to the plaintiff towards these two loans. It is not the case of defendants No. 1 to 5 that such amount stands paid. Therefore, the plaintiff is entitled to recover a sum of Rs. 31,55,875 from defendants No. 1 to 5 jointly and severally. 44. The plaintiff is thus entitled to Rs. 51,59,695 plus Rs. 31,55,875 that is, Rs. 83,15,570 in respect of the second, fifth and sixth loan from the defendants No. 1 to 5. The liability of the defendants No. 1 to 5 being joint and several. The issue is decided partly in favour of the plaintiff and partly in favour of the defendants. Issue No. 4A. 45. During the course of hearing the present issue was not pressed by the learned Counsel for defendants No. 6 and 7. The same is as such decided against them. Issue No. 1. 46. In view of the findings recorded under issue No. 4 above, there is no cause of action against defendants No. 6 and 7. The issue is accordingly decided in favour of defendants No. 6 and 7. Relief. 47. As a result of the above findings a decree for a sum of Rs. 83,15,570 with proportionate costs is passed in favour of the plaintiff and against the defendants No. 1 to 5 jointly and severally. The plaintiffs shall be further entitled to interest on the decretal amount at the rate of 12% per annum from the date of suit that is, 17.8.1993 till the date of payment/realisation of the amount The suit of the plaintiff as against defendants No. 6 and 7 shall stand dismissed. Suit partly allowed.