JUDGMENT Gurusharan Sharma, J. 1. V. Mishra, a Taxi Driver approached Bank of India, Ranchi Branch, for giving him loan for purchasing a new Ambassador Car for plying as taxi. The Bank agreed to advance loan on certain terms and conditions, which were accepted by him. V. Mishra, thereafter executed a promissory note for Rs. 16,000/- on 9.6.1972 promising to repay the loan with interest @ 4% per annum over Reserve Bank of India rate, subject to minimum of 9% per annum. 2. Two persons, namely Raj Kishore Lal and Baikunth Mishra executed letters of guarantee simultaneously on 9.6.1972 itself. On 1.6.1976, V. Mishra, the Principal Debtor acknowledged in writing to pay the total dues outstanding against him, but failed to liquidate the dues. Hence, Bank of India, filed, Money Suit No. 105 of 1978 for a decree of Rs. 20,461.91 paise with interest pendente lite on future @ 11% per annum. V. Mishra, the Principal Debtor was impleaded as defendant No. 1 and Raj Kishore Lal and Baikunth Mishra, the two guarantors were respectively made defendant Nos. 2 and 3 in suit. 3. Defendants 1 and 3 in spite of valid service of summons, failed to appear and contest the suit. Defendant No. 2 appeared, filed written statement and contested the suit. He admitted himself to be one of sureties for defendant No. 1 in respect of original agreement entered on 9.6.1972. He pleaded about aforesaid acknowledgement dated 1.6.1976 and prayed to dismiss the suit as against him. 4. Trial Court decreed the suit ex pane against defendant No. land dismissed ex pane as against defendant No. 3 and on contest against defendant No. 2. Defendant No. 1 alone was, therefore, directed to pay the decretal dues to the plaintiff-Bank. Plaintiff-Bank has, therefore, filed the present appeal. 5. Mr. A. Allam, Counsel for plaintiff-Bank challenged the observation/finding of the Trial Court that since defendant No. 2 had not signed any acknowledgement of debt nor had written any letter acknowledging the debt at any point of time and he was one of the sureties in respect of original agreement dated 9.6.1972 the suit was hopelessly barred by time as against him and was fit to be dismissed. In this regard, reference was made to the letter of guarantee (Exhibit-2) executed by aforesaid two guarantors on 9.6.1972, which provided, "We respectively waive in your favour all or any of our rights against you or the Principal so far as may be necessary to give effect to any of the provisions of this guarantee. And we and each of us agree that we shall not be entitled to claim the benefit of any legal consequences of any variation of any contract entered into by the Principal with you the liability in respect of which is guaranteed by us as aforesaid." 6. On the other hand, Mr. N.K. Prasad, Senior Counsel for respondent No. 2 submitted that any acknowledgement by the Principal Debtor could not save limitation against the surety, unless it was shown that the said surety himself was to be represented by the person, who made the payment. Hence the guarantor is not bound by any acknowledgement by the Principal Debtor and as such the Trial Court rightly held that the suit as against guarantor-defendant No. 2 was barred by time. 7. In this regard, reference is made to provisions of Section 128 of the Contract Act, which provides that liability of the surety is co-extensive with that of the Principal Debtor before unless it is otherwise provided in the contract. It is, therefore, necessary to refer to the contents of Exhibit-2, which runs as follows: "Whenever the amount due from the Principal either alone or jointly shall exceed the limit for which we are liable under this guarantee you may if you think fit elect which particular accounts or items shall be considered as exclusively secured by this guarantee. And you shall be at liberty at any time in case of the payment by us or by any of us of any of the moneys hereby guaranteed to place the same to a suspense account for any period that you may think fit and such money shall not be considered as paid on account of the moneys due to you from the Principal or any such other person. Should be guarantee cease from any cause to be binding as a continuing security on me you may open a fresh account or accounts and continue any existing account with the principal and no money paid into such account and subsequently drawn out by the Principal shall on settlement of any claim under this guarantee be appropriated towards or have the effect of payment of any part of the moneys due from the Principal at the time of this guarantee ceasing to be so binding as aforesaid in the absence of a direction in writing to appropriate given to you by the person paying in such money. If we or any of us now have or shall hereafter take any security from the Principal in respect of our liability under this guarantee we will not prove in the bankruptcy or insolvency of the Principal in respect thereof to you prejudice and such security shall stand as a security for you and shall forthwith be deposited with you." 8. It is, therefore, apparent from the above recitals that an authority is established by the condition referred to above and the guarantor is also bound by the aforesaid acknowledgement of the principal debtor and, therefore, the suit was not barred. 9. In the result, this Appeal is allowed and impugned judgment and decree are modified to the extent that suit is also decreed on contest as against defendant No. 2 and ex parte as against defendant No. 3. No cost. Lower Court records may be sent down.