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Madhya Pradesh High Court · body

2005 DIGILAW 121 (MP)

Punjab and Sindh Bank v. Laxman Singh

2005-01-24

A.K.GOHIL, S.S.JHA

body2005
JUDGMENT This appeal is filed by the plaintiff Bank challenging the judgment of the trial Court where by the trial Court has held that the suit against the guarantor is barred by limitation. Trial Court has decreed the suit against the borrower respondent No.1 and dismissed the suit against the guarantor as well as legal representatives against another guarantor. Counsel for the appellant submitted that the trial Court has recorded a finding that original agreement was executed on 24.6.1981 and thereafter Laxmansingh (borrower) has acknowledged the debt on 13.3.1984. Subsequent revival note was executed on 2.3.1987. Suit was filed within three years from 2.3.1987. Counsel for the appellant submitted that the trial Court has committed an error in holding that since the revival letter was signed by the borrower Laxmansingh only, therefore, limitation will not be extended to the guarantors. He submitted that try is finding is contrary to law and contrary to the provisions of section 128 of the Indian Contract Act. Counsel for the appellant has placed reliance on the judgment of the Apex Court in the case of Kailash Nath Agrawal v. Pradeshiya Industries and Investment Corporation of U.P. reported in AIR 2003 SC 1886. Counsel for the respondents submitted that since other respondents are not served, therefore, it is necessary to hear other respondents. Other respondents have been served except respondents No.4 (B) and 4 (C) are the legal representatives of Jagatsingh. They were impleaded as party in the trial Court but they did not appear in the Court and submit their registered addresses in the Court of first instance as provided under Order VI Rule 14A CPC. Therefore, service of notice upon these respondents has been dispensed with under Order XLI Rule 14 Sub-rule (4) CPC. As regards liability of the guarantors is concerned, we have perused the document Ex. P-9 and we find that this document has been signed by guarantors Sardar Jagat Singh S/o Atma Singh and Sardar Inder Singh, S/o Hazara Singh. In this document, it is specifically agreed by them that their liability is joint and several with the borrower. In the case of Kailash Nath Agrawal (supra) it is held in para 9 that under section 128 of the Indian Contract liability of surety is coextensive with that of principal debtor unless it is otherwise provided by the contract. In this document, it is specifically agreed by them that their liability is joint and several with the borrower. In the case of Kailash Nath Agrawal (supra) it is held in para 9 that under section 128 of the Indian Contract liability of surety is coextensive with that of principal debtor unless it is otherwise provided by the contract. Since the guarantors have entered into an agreement and acknowledged their liability and have also signed the agreement that their liability will be joint and several with the borrower, suit against the guarantors is also within limitation from the date of revival deed dated 2.3.1987. Even from perusal of the agreement, it is clear that wherever liability is accepted by the debtor, it will be extended to the guarantors who have executed a bond and accepted their liability jointly and severally with the original borrower. In the facts of the case, finding recorded by the trial Court in para 17 of the judgment is set aside and it is held that the suit against the guarantors is within limitation. Suit is decreed against all the defendants. The defendants are jointly and severally liable to pay the dues of the appellant Bank. Appeal succeeds and is allowed. There shall be no order as to costs.