TRAVANCORE CENTRAL COTTAGE INDUSTRIES CO OPERATIVE SOCIETY LIMITED Vs. UNITED BANK OF TRAVANCORE LIMITED

JUDGEMENT

(1.) The Travancore Central Cottage Industries Marketing Society No. 2502, a Society registered under the Travancore Cooperative Societies Act (V of 1112) is the appellant. The Society was the 2nd defendant in the court below. The plaintiff sued for recovery of a sum of Rs. 3041-8-0 from the defendants and by sale of certain movables entrusted by the 1st defendant to the 2nd defendant for sale. The plaintiffs case is that the 1st defendant borrowed a sum of Rs. 2000 from the plaintiff on the security of ivory articles entrusted by him to the 2nd defendant. The third defendant who was the Secretary of the 2nd defendants Society undertook to repay the sum from the sale proceeds of the articles, after deducting commission for sales. The 2nd defendant contested and the main contentions were that by its constitution the Society could not give a guarantee of this kind, that the alleged letter of guarantee did not cast any liability on the 2nd defendant, and that the 3rd defendant was incompetent to bind the Society. The Trial Court overruled these contentions and decreed the suit against the 2nd defendant also; hence this appeal.

(2.) Ext. B dated 4-12-1946 is the alleged letter of guarantee given by the 3rd defendant to the plaintiff. The circumstances under which Ext. B was given may be briefly stated. The 1st defendant requested the plaintiff for a loan on the security of certain ivory articles which he had entrusted to the 2nd defendant for sale. As the articles intended to be pledged were then in the possession of the 2nd defendant, the plaintiff sent a letter Ext. III dated 29-11-46 to the 2nd defendant. Ext. III reads as follows:-

(3.) The 3rd defendant who was Secretary of the 2nd defendants Society sent a reply to the same on the same date and Ext. IV is the office copy of the reply. Ext. IV stated