THOMCOS BANK LTD. Vs. ANIRUDHAN

JUDGEMENT

(1.) This appeal arise out of a suit for money due under an overdraft account. The appellant is the plaintiff, the Thomcos Bank Ltd., Trivandrum, which has its registered office at Alleppey. Defendant 1 is a merchant and contractor belonging to Vallakadavu in Trivandrum, who was dealing in tapioca starch. In 1945 the plaintiff-bank gave an overdraft accommodation to defendant 1 for Rs. 5000/-, and for this accommodation defendants 1 and 2 gave the bank a letter of guarantee Ext. A on 25-9-1945, signed by both of them. According to P. W. 2 who was in charge of the Trivandrum branch of the plaintiff bank, in 1947, defendant 1 wanted to raise the overdraft accommodation to Rs. 20,000/- and the bank accordingly allowed him an overdraft account for Rs. 20,000/-. Ext. B dated 24-2-1947 is a promissory-note executed by defendant 1 in favour of the plaintiff bank for Rs. 20,000/- and the plaintiffs case is that defendant 1 had executed Ext. B as security for the said overdraft account and that over and above Ext. B executed by defendant 1, defendants 1 and 2 had also given to the bank a letter of guarantee Ext. C dated 24-5-1947 signed by both of them, undertaking to repay to the plaintiff whatever amount might be found due to the bank under defendant 1s overdraft account up to a maximum of Rs. 20,000/- and interest thereon at 9% per annum. Alleging that a sum of Rs. 26377, as. 11, pies 2 was due to the plaintiff bank on 31-3-1950 under the overdraft account, plaintiff brought the suit which has given rise to this appeal for recovery of the said amount and interest thereon from defendants 1 and 2.

(2.) Defendants 1 and 2 contested the suit. Defendant 1 contended that Ext. B was not supported by consideration, that under the records of the account only a sum of Rs. 14,000/- was due from him, that he was for some time dealing in tapioca starch and had agreed at the plaintiffs request to open a key-loan account in the plaintiff bank in his name for some tapioca starch standing in the name of Messrs. Fazil and Lean DCruz, that the plaintiff bank subsequently transferred to the plaint overdraft account an amount of Rs. 12,000/- under the aforesaid key-loan account, that this transfer was made improperly and without authority and defendant was not responsible for the amount transferred and that he was not therefore liable for the whole plaint amount.

(3.) Defendant 2 contended that the letter of guarantee executed by him was only for Rs. 5000/-, that without his consent and knowledge the figure 5000 in the letter of guarantee was altered to Rs. 20,000/-, that on account of this material alteration in Ext. C, he could not be made liable for the plaint claim and that the suit was also barred by limitation. According to the averments in the written statement, defendant 2 had agreed to stand surety for defendant 1 to the extent of Rs. 5000/- and when he signed Ext. C the amount entered therein was only Rs. 5000/-, the figure 5000/- was subsequently corrected to Rs. 20,000/- and on account of this material alteration the suit is not maintainable. It was further contended by defendant 2 that even on the allegations in the plaint the plaintiff is seen to have advanced to defendant 1 more amounts than that covered by the letter of guarantee and so the obligation of defendant 2 as surety must be deemed to have been discharged in law. Lastly, there was a prayer in the written statement that, if defendant 2 was found liable for any amount, his liability for the same might be made secondary to that of defendant 1.