JUDGMENT M.R. Verma, J.—This is a suit for recovery of Rs. 1,01,18,544/- with pendente lite and future interest @ 12.5% per annum. 2. Case of the plaintiff, as made out in the plaint, is that it is a registered company, dealing in providing financial assistance in term loan and soft loans. M.K. Chandhary, being the Principal Officer of the plaintiff, is competent to institute the suit on behalf of the plaintiff. Defendant No. 1, through its director defendant No. 2, applied to the plaintiff for grant of term loan of Rs. 91,77,000/- for purchase of land, plant, machinery and construction of factory building. The plaintiffs sanctioned the loan and as a consequence, a sum of Rs. 90,00,000/- was lent to defendant No. 1, which agreed to pay interest thereon @ 6.5% per annum over and above the refinance rate, as might be modified by the Industrial Development Bank of India, from time to time with a rebate of 3% per annum for prompt payment of principal and interest, but subject to the minimum rate of 12.5 % per annum. The loan agreements dated 16.6.1981, 29.6.1982, 12.3.1985, 27.3.1981 and hypothecation agreements dated 16.6.1981,29,6.1982,12.7.1985 and 27.3.1981 were executed by the defendants in favour of the plaintiff for repayment of the loan besides creating equitable mortgage vide agreements dated 16.6.1981, 29.6.1982, 12.3.1985 and 27.3.1991 to secure a total sum of Rs. 91.77 lakhs by hypothecating the land, building, plant and machinery and other miscellaneous assets of defendant No. 1. Defendants 2 to 4 executed deeds of guarantee, defendant No. 2 executed guarantee deeds dated 16.6.1981, 26.6.1982,12.3.1985 and 27.3.1991. Defendant No. 2 executed guarantee deeds dated 16.6.1981, 26.6.1982 and 12.3.1985 and Defendant No. 4 executed guarantee deeds dated 16.1.1981, 26.6.1982 and 12.3.1985. The loan amount was repayable in half yearly installments commencing from 10.4.1991 and the last instalment was payable on or before 10.12.1998. The defendants, however, failed to comply with the terms and conditions of the loan, therefore, plaintiff issued Recall cum Take Over Notice on 29.12.1992 and took over the assets of defendant No. 1 on 20.1.1993 under Section 29 of the State Financial Corporation Act, 1951. The assets so taken over were sold for Rs. 82 lakhs and out of the sale proceeds, a sum of Rs. 55,46,074/- was shared by proforma defendant No. 5 and the remaining amount was adjusted by the plaintiff against the amount due from the defendants. The assets so taken over were sold for Rs. 82 lakhs and out of the sale proceeds, a sum of Rs. 55,46,074/- was shared by proforma defendant No. 5 and the remaining amount was adjusted by the plaintiff against the amount due from the defendants. After adjustment as aforesaid, a sum of Rs. 1,01,18,544/- was payable on 31.1.1995 by the defendants and the defendants were called upon to pay the said amount vide legal notices dated 21.2.1995. The defendants, however, failed to make any payment. Hence this suit. 3. Defendants, other than defendant No. 4 are ex parte. Defendant No. 4 contested the claim of the plaintiff and filed written statement. He raised preliminary objections that this court has no jurisdiction to try the suit; that the suit is time barred; that plaintiff cannot recover the loss for which plaintiff itself is responsible; that replying defendant was ordinary Director and had no control over the day to day functioning of defendant No. 1, hence cannot be held liable for repayment of the loan; that the signatures of the replying defendant were taken in one go on blank papers and he has not executed any valid agreement/guarantee for repayment of the loan and has not hypothecated any of his property with the plaintiff. On merits the defendant No: 4 has denied his liability to pay any amount to the plaintiff and claimed that his signatures on various documents, as specifically detailed in the written statement, clearly show that the documents, were not consciously executed by him and do not bind him. 4. Plaintiff filed replication wherein grounds of defence as taken in the written statement were denied and the claim as made out in the plaint has been affirmed. 5. On the pleadings of the parties, the following issues were framed: 1. To what amount the plaintiff is entitled to recover and from whom? OPR 2. Whether the agreement on the basis of which the suit has been filed are validly executed to have binding force of law? OPP. 3. Whether there is a valid, properly stamped personal guarantee executed by defendant No. 4? OPP. 4. Whether defendant No. 4 who remained as an ordinary director w.e.f. 1980 to 27.7.1987 is not liable for the payment as prayed for especially for the period he was not the director? OPD. 5. OPP. 3. Whether there is a valid, properly stamped personal guarantee executed by defendant No. 4? OPP. 4. Whether defendant No. 4 who remained as an ordinary director w.e.f. 1980 to 27.7.1987 is not liable for the payment as prayed for especially for the period he was not the director? OPD. 5. Whether clause 8 pertaining to personal guarantee stood deleted and what is its effect? OPD. 6. Whether plaintiff can be allowed to recover the loss as prayed for from defendant No. 4, for which plaintiff is himself responsible? OPD. 7. Whether the suit is time barred? OPD. 8. Whether this Court has jurisdiction to try this suit? OPP. 9. Relief. 6. The contesting parties led evidence. 7. Arguments were heard. - 8. My issuewise findings are as follows: Issue No. 8 : 9. The contesting defendant had taken objection regarding want of jurisdiction to try the present case by this Court on the premises that the entire loan money advanced to defendant No. 1 belongs to Industrial Development Bank of India, therefore, the jurisdiction for recovery of such loan vests with the Debt Recovery Tribunal and not in this Court. The objection had been denied by the plaintiff on the ground that Industrial Development Bank of India is only a Financing Agency of the plaintiff and that the money advanced to defendant No. 1 is of the plaintiff and not of the Industrial Development Bank of India. 10. There is nothing on the record to prove that the plaintiff is the agent of Industrial Development Bank of India and advances loans on its behalf. On the contrary PW-2 has specifically stated that Industrial Development Bank of India is only a source of funds which the plaintiff gets from the Bank and that the plaintiff does not act as an agent of the Industrial Development Bank of India. This statement remains uncontroverted. Case of the plaintiff clearly is that on the request of the defendants it advanced the loan and thus lender is the plaintiff and not Industrial Development Bank of India. The money is not sought to be recovered by the said bank or on behalf of the said bank but by the plaintiff in its own right as a financing corporation. The money is not sought to be recovered by the said bank or on behalf of the said bank but by the plaintiff in its own right as a financing corporation. There is no dispute that the plaintiff is not a bank nor a company notified as a financial institute under Section 4(a) of the Companies Act or Clause (h)(ii) of Section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, therefore, the Debt Recovery Tribunal constituted under the said Act has no jurisdiction to try the present suit. It is, therefore, held that this Court has jurisdiction to try this suit. This issue is accordingly held in favour of the plaintiff. Issue No. 3 : 11. According to the plaintiff, defendant No. 4 inter-alia executed the deeds of guarantee in favour of the plaintiff for repayment of the principal amount interest thereon and other dues on account of the loan. According to the contents of the plaint such guarantees were executed on 16.8.1981, 26.6.1982 and 12.3.1985 for term loans of Rs. 29.78 lacs, Rs. 16.22. lacs and Rs. 32 lacs respectively. PW-2 has stated that defendants No. 2 to 4 executed guarantee deeds Ext. PW-2/N. Ext. PW-2/O and Ext. PW-2/P. It is an admitted fact that defendant No. 4 has not been mentioned as guarantor in the deed Ext. PW-2/O which is otherwise duly signed by him. It has not been put to PW-2 in his cross-examination that defendant No. 4 did not execute all or any of the aforesaid guarantee deeds as a guarantor. Defendant No. 4 (DW-1) while appearing as his own witness did not specifically deny the execution of the said deeds but on the contrary admitted his signatures on guarantee deeds Ext. PW-2/O and Ext. PW-2/N. It is, thus, clearly established that defendant No. 4 is admittedly the signatory to all the aforesaid guarantee deeds and all the deeds are on stamp papers, therefore, unless the contrary is shown defendants No. 2 to 4 are bound by the terms and conditions of the guarantee deeds. 12. The contesting defendant in the written statement claimed to be an ordinary Director of defendant No. 1 at the relevant time. This is, however, not a disqualification for him to be a guarantor for defendant No. 1. 13. 12. The contesting defendant in the written statement claimed to be an ordinary Director of defendant No. 1 at the relevant time. This is, however, not a disqualification for him to be a guarantor for defendant No. 1. 13. It was contended by the learned counsel for defendant No. 4 that it is not proved that these deeds were signed by defendant No. 4 after having been made aware of the contents thereof as is evident from the fact that one of the deed does not include his name as guarantor at the appropriate place and most of the other papers/deeds in the suit relied upon by the plaintiff do not contain his signatures at the space meant for signatures. It is further contended that in fact the papers were put up before defendant No.4 in the form of a bunch and he signed them in a routine manner as a witness without being aware of the contents and implications thereof. 14. DW-1 has no doubt stated that he had signed the documents in question without reading them and that he signed Ext. PW-2/F as a witness. However, this defence has not been suggested to the material witnesses of the plaintiff particularly PW-2. DW-1 admits that he is in the trade since 1973 and during the period 1973 to 1980 he was dealing in cement and steel and is a post graduate. He has further stated that during the period he had been in the trade he had not signed any document. Evidently, this witness well qualified educationally and having long experience in the trade can by no stretch of imagination be believed to have signed important documents like hypothecation deed, guarantee deeds and schedule of payment of loan without caring to go through the contents of such documents. He is, thus, not making true statement about having signed the guarantee deeds without reading the contents thereof or that he signed the documents merely as a witness. Being admittedly a Director of defendant No. 1, the borrower, he could not be a witness to loan documents executed between the parties. 15. He is, thus, not making true statement about having signed the guarantee deeds without reading the contents thereof or that he signed the documents merely as a witness. Being admittedly a Director of defendant No. 1, the borrower, he could not be a witness to loan documents executed between the parties. 15. It may be pointed out that PW-2, who has supported the case of the plaintiff about due execution of guarantee deeds by defendant No. 4, has no personal interest in the case of the plaintiff nor he is shown to have any bias against the contesting defendant, therefore, there is no reason to disbelieve his statement regarding due and proper execution of a guarantee deeds Ext. PW-2/N, Ext. PW-2/O and Ext. PW-2/P inter-alia by defendant No. 4. 16. In view of the above discussion, it is held that defendant No. 4 executed valid guarantees Ext. PW-2/N, Ext. PW-2/O and Ext. PW-2/P undertaking to repay the loan in suit. This issue is accordingly held in favour of the plaintiff. Issue No. 4 : 17. It was contended by the learned counsel for the contesting defendant that defendant No. 4 by virtue of a judgment rendered by the Punjab & Haryana High Court ceased to be the Director of defendant No. 1 and on 27.7.1987, therefore, he is not liable to pay anything for the period when he was not a Director. It was also contended that since the guarantee deeds furnished by defendant No. 4 were ot enforced within the period when the liability of defendant No. 4 subsisted as a guarantor before 27.7.1987 and thereafter he had neither paid anything nor acknowledged his liability as a Guarantor/Ex-Director, therefore, he cannot be held liable jointly or severally alongwith other defendants to pay the loan in suit. To substantiate the contention, the learned Counsel relied on M/s. Brahamayya and Co. Official Liquidators v. K. Srinivasan Thangirayar and others (AIR 1959 Mad 122), Chittaranjan Banerjee and another v. Deputy Commissioner of Lakhimpur, Dibrugarh and others, AIR 1980 Gauhati 62, Hariprashad Narayanjee ]aiswal v. Chandrojirao Sambhajeerao Angre, AIR 1962 Madhya Pradesh 69 and State of Maharashtra v. Dr. M.N. Kaul (dead) through his LRs and another, AIR 1967 SC 1634. 18. In M/s. Brahmayyas case (supra) Madras High Court held that the liability of a surety is as per the surety bonds executed by the Surety. M.N. Kaul (dead) through his LRs and another, AIR 1967 SC 1634. 18. In M/s. Brahmayyas case (supra) Madras High Court held that the liability of a surety is as per the surety bonds executed by the Surety. Since creditors in the case had entered into a composition with the principal debtor without reference to the surety, therefore, surety stood discharged from its liability under the surety bond. 19. Evidently the above proposition will apply to a case where the dispute between the creditor and the principal debtor is amicably settled/ compromised without involving the surety/guarantor as a party to the said compromise for the reason that the cause of action, if any, to the creditor or the principal debtor will be governed by the settlement/compromise arrived at between them to which the surety is not a party, hence, under no obligation to abide by the terms and conditions of the surety bond executed by it before such settlement/compromise. 20. In Chittaranjan Banerjees case (supra), the surety for the Mouzadar for his revenue collections was proceeded against to enforce discharging of the liability of the Maozadar for the previous year for which period he was not a surety. Against the above background, Gauhati High Court held that the surety could not be held liable to discharge the liability of the Maozadar for the past period for which he was not a surety. It is apparently so for the reason that the surety bond has to be strictly construed and if the surety bond relates to a particular liability or for a particular period it can be enforced only to discharge such particular liability within the period for which the surety/guarantee has been given. 21. In Dr. M.N. Kauls case (supra), the guarantee furnished by the guarantor was to remain in force for one calendar month after the pronouncement of the judgment/order (2) a period of 12 months from the date of execution of the guarantee whichever was later and/or (b) the drawing and sealing of the order of the Supreme Court finally disposing of the petition. The guarantee was not enforced within the stipulated period but was sought to be enforced thereafter. The Apex Court held that it would not be possible to ignore the time limit which was integral part of the guarantee to enforce the guarantee and that the guarantee could not be enforced after the specified period. The guarantee was not enforced within the stipulated period but was sought to be enforced thereafter. The Apex Court held that it would not be possible to ignore the time limit which was integral part of the guarantee to enforce the guarantee and that the guarantee could not be enforced after the specified period. 22. There cannot be any dispute about the principle that a surety/ guarantor like any other contracting party cannot be held bound to do 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 agreed to the new terms of the contract or had given liberty to the principal debtor to agree to the new terms of the contract he cannot be held liable for repayment of the loan or to discharge the liability under the surety bond. However, for applicability of this principle it has to be shown that (1) there has been novation of the contract between the creditor and the principal debtor without the surety being a party to such novation leading to discharging of the surety and (2) that the surety/guarantor has not authorized the principal debtor to arrive at fresh settlement/contract about the loan payment whereof is guaranteed by the surety because the guarantor/surety can authorise the principal debtor to agree for change in the terms and conditions of the loan in future and any action of the principal debtor under such authorisation will be binding on the surety and the guarantee furnished by him will be enforceable. 23. In so far as defendant No. 1 to 3 are concerned, the position that defendant No. 1 is the Company and defendants No. 2 and 3 are its Directors and acted as such for defendant No. 1 at different stages of the loan transaction and executed the agreements Ext. PW-2/E to Ext. PW-2/H, hypothecation agreements Ext. PW-2/J to Ext. PW-2/N and guarantee deeds Ext. PW-2/ N to Ext. PW-2/P jointly with defendant No. 4 and guarantee deed Ext. PW-2/Q was executed by defendant No. 2. All these documents were executed at the time of subsisting liability of defendants No. 1 to 4 to pay the loan in suit. However, as is evident from the contents of Ext. PW-2/N and guarantee deeds Ext. PW-2/ N to Ext. PW-2/P jointly with defendant No. 4 and guarantee deed Ext. PW-2/Q was executed by defendant No. 2. All these documents were executed at the time of subsisting liability of defendants No. 1 to 4 to pay the loan in suit. However, as is evident from the contents of Ext. PW-l/A which are not disputed by the plaintiff defendant No. 4 ceased to be the Director of defendant No. 1 with effect from 27.7.1987 by virtue of the order of even date passed by the Punjab and Haryana High Court, therefore, in the ordinary course defendants No. 1 to 3 could not as a company and Directors thereof incur any fresh liability or change the terms and conditions of the loan to bind defendant No. 4 as a Director. Any acknowledgment of debt by them after the aforesaid date, therefore, would not be binding on defendant No. 4. However, as already held hereinabove, guarantee deeds Ext. PW-2/N, Ext. PW-2/O and Ext. PW-2/P were executed by defendant No. 4 jointly with defendants No. 2 and 3 thereby undertaking to repay the loan in suit alongwith interest etc. As per the terms and conditions of the said guarantee each of them is a continuing guarantee and irrevocable till the full discharge of the liability of defendant No. 1 and are made enforceable against the guarantor irrespective of change in the constitution of the plaintiff or defendant No. 1 or the guarantor ceasing to be the Director of defendant No. 1 It is also provided therein that any settlement of accounts between the plaintiff and defendant No. 1 and any liability admitted by defendant No. 1 shall be conclusive evidence against the guarantor and shall not be called in question by him. Thus, as per the terms and conditions of the aforesaid guarantee deeds defendant No. 4 will not be discharged from his liability as a guarantor merely because he has ceased to be a Director of defendant No. 1 and any acknowledgment/settlement of account or admission of any liability by defendant No. 1 shall be binding on defendant No. 4 as a guarantor and his liability as a guarantor will continue to subsist till the liability of defendant No. 1 ceases. 24. 24. In view of the above, it is held that defendant No. 4 has failed to prove that he is not liable to pay the amount as claimed in the suit especially for the period when he was not the Director of Issue No. 5 : 25. The case of defendant No. 4, as pleaded in the written statement, is that the plaintiff remained an ordinary Director and had no control over day to day functioning of the company and assets thereof stood hypothecated with the plaintiff, therefore, Clauses 7 and 8 pertaining to personal guarantees stood deleted and are not binding on defendant No. 4. He has not led any evidence to prove these averments nor he has substantiated it in his own statement. There is, thus, no material on record to prove that Clauses 7 and 8 of the guarantee deeds stood deleted for any reason whatsoever. This issue is accordingly held against defendant No. 4. Issue No. 6 : 26. The contesting defendant has not led any evidence to prove that loss, if any, sought to be recovered by the plaintiff was occasioned because of any act, omissions or conduct on the part of the plaintiff and plaintiff itself is responsible for such loss, the contesting defendant has, therefore, failed to prove this issue which is accordingly decided against him. Issue No. 7 : 27. The loan in suit was sanctioned on 29.8.1980 and on different dates thereafter and the loan documents were executed on 16.6.1981, 29.6.1982, 12.3.1985 and 27.3.1991. The defendants committed default in the payment of the installments on 10.4.1991 and the recall notice was served on the defendants on 29.12.1992 whereby the entire amount became recoverable at once. These averments, as made in the plaint, are duly supported by PW-2 who has stated that loan in suit was recalled vide recall-cum-takeover notice Ext. PW-2/T and the version of PW-2 is fully supported by the contents of Ext. PW-2/T and is not controverted. Thus, the cause of action arose to the plaintiff and period of limitation started running from the date of recall notice Ext. PW-2/T i.e. 29.12.1992. The suit has admittedly been instituted on 15.5.1995. Hence, well within the period of limitation. 28. PW-2/T and the version of PW-2 is fully supported by the contents of Ext. PW-2/T and is not controverted. Thus, the cause of action arose to the plaintiff and period of limitation started running from the date of recall notice Ext. PW-2/T i.e. 29.12.1992. The suit has admittedly been instituted on 15.5.1995. Hence, well within the period of limitation. 28. The contention for the contesting defendant, however, is that he had ceased to be the Director of defendant No. 1 on 27.7.1987 and thereafter he did not make any payment nor acknowledged any liability during the period when his liability subsisted and having ceased to be a Director anything done by defendants No. 1 to 3 on the basis of which the period of limitation might have been extended does not bind him and the suit against him is barred by time. 29. The first default in the payment of the loan was committed by the defendants on 10.4.1991 and the recall notice was served on defendants on 29.12.1992. It is not in dispute that at the time of default and the recall notice defendant No. 1 had subsisted liability to pay the loan in suit. The revised payment schedule Ext. PW-2/R dated 31.3.1986 whereby the payment of instalments was to commence from 10.6.1987 is duly executed by defendant No. 4. The revised repayment schedule Ext.PW-2/S was executed on 15.8.1989 by defendant no. 2 as Director of defendant No. 1. These payment schedules have been revised for and on behalf of defendant No.l within the period of limitation admitting the liability qf the defendants to pay the suit amount. By virtue of the conditions of the continuing guarantee deeds furnished by defendant No. 4 whereby it has specifically been provided that any settlement of accounts or admission of liability made by or on behalf of defendant no.l will not be called in question by guarantors, defendant No. 4 has authorized the principal debtor to admit the liabilities under the loan transaction and in view of the conditions of the guarantees anything done by the principal debtor which may have the effect of extending the period of limitation is binding on the contesting defendant, therefore, as a guarantor the limitation against defendant No. 4 will also start from the date of recall notice from which date the suit is within the period of limitation. 30. 30. In view of the above, the contesting defendant has failed to prove that the suit is barred by limitation. This issue is accordingly held against defendant No. 4. Issue No. 2 : 31. PW-2 has stated that after the sanction of the loan in favour of the defendant No. 1 loan agreements Ext. PW-2/E to Ext. PW-2/H were executed by defendants No. 2 and 3 for and on behalf of defendant No. 1 and they also executed hypothecation agreements Ext. PW-2/J to Ext. PW-2/M. The defendants No. 2 to 4 also executed guarantee deeds Ext. PW-2/N, Ext. PW-2/O and PW-2/P and Ext.PW-2/Q was executed by defendant No. 2. There is nothing in the cross-examination of this witness which may create any doubt about the validity of these documents. Defendant No. 1 has not led any cogent and reliable evidence to show that the agreements Ext. PW-2/E to Ext. PW-2/H are not validly executed. Thus, there is nothing on the record to controvert this statement of PW-2. The defendant himself has not disputed taking of the loan from the plaintiff but has admitted that the loan in question was obtained by the defendants for the purpose of purchase of land, machinery, plant etc. It follows that the agreements in question regarding the loan were executed because such a loan could not be advanced by the plaintiff to the defendants without execution of the aforesaid agreements. Thus, in view of the unrebutted statement of PW-2 valid execution of the agreements basis of the suit is duly proved. 32. In view of the above discussion, it is held that the agreements on the basis of which the suit has been filed are validly executed agreements having binding force in law. The issue is accordingly held in favour of the plaintiff. Issue No. 1 : 33. The plaintiff has instituted this suit for recovery of Rs. 1,01,18,554 with costs of the suit and future interest at the contractual rate of 12.5% per annum. To prove the liability of defendants to pay the suit amount plaintiff examined Ratnesh Kumar Varshney (PW-3), who has stated that the accounts of the plaintiff are maintained under his supervision and the statement of accounts Ext. PW-3/A is regarding the accounts of the defendants and is certified by him under the Bankers Book Evidence Act and is correct. To prove the liability of defendants to pay the suit amount plaintiff examined Ratnesh Kumar Varshney (PW-3), who has stated that the accounts of the plaintiff are maintained under his supervision and the statement of accounts Ext. PW-3/A is regarding the accounts of the defendants and is certified by him under the Bankers Book Evidence Act and is correct. There is nothing in the cross-examination of the witness which may create any doubt about the correctness of the statement of accounts Ext. PW-3/A. The contesting defendant (DW-1) himself has not stated that the said statement of accounts is incorrect or unreliable for any reason whatsoever. As per the contents of Ext. PW-3/B the defendants were liable to pay a sum of Rs. 1,01,18,544 inclusive of the interest to the plaintiff as on 31.1.1995 and this is the amount which is claimed in the suit. 34. Since the transaction between the parties was a commercial transaction and the agreed rate of interest was 12.5%. Therefore, the plaintiff is entitled to recover interest at the aforesaid rate. 35. In view of the unrebutted evidence of the plaintiff consisting of statements of PW-1, PW-2, PW-3 and the documentary evidence referred to hereinabove particularly the loan agreements and the guarantee deeds Ext. PW-2/N, Ext. PW-2/O and Ext. PW-2/P the suit amount is payable by defendants No. 1 to 4 jointly and severally. 36. In view of the above, it is held that the plaintiff is entitled to recover Rs. 1,01,18,544 with pendentelite and future interest from defendants No.l to 4 jointly and severally. This issue is accordingly held in favour of the plaintiff. Relief 37. In view of the findings given hereinabove, suit of the plaintiff is decreed for Rs. 1,01,18,544 with costs of the suit alongwith pendentelite and future interest 12.5% per annum against defendants No. 1 to 4 jointly and severally. The decree against defendants No. 1 to 3 is ex-parte. Suit decreed.