UNION BANK OF INDIA Vs. T J STEPHEN

JUDGEMENT

(1.) This is an appeal by the plaintiff. Plaintiff is a Bank. The suit was for recovery of an amount of Rs. 71,986.50. Plaintiff claimed that defendants are liable to pay the said amount.

(2.) There are three defendants in this case First defendant is the principal debtor. Defendants 2 and 3 are guarantors. They have executed a continuing guarantee taking up the responsibility that they will also be liable to pay the. amount to the Bank. It seems that the amount was advanced for the purchase of a fishing boat and the boat was also hypothecated by the first defendant to the Bank, by the hypothecation goods agreement dated 21-8-1970. The defendants did not repay the amount due to the Bank. The Bank instituted the suit against the defendants for recovery of the amount found due as per the accounts. There is no serious contention about the quantum of liability. The first defendant did not hold out any serious contentions. After considering the contentions raised by the first defendant the court below found that the plaintiff is entitled to a decree for the amounts claimed. Thus the court below decreed the suit as against the first defendant.

(3.) Defendants 2 and 3 took up the contention that they are not liable to pay the amount even though they have executed a continuing guarantee. The continuing guarantee was executed on 21-8-1970. According to the Bank, the debt was kept alive on account of the acknowledgement of the liability of the debt by the first defendant. The plea of defendants 2 and 3 was that the acknowledgement made by the first defendant is not binding on defendants 2 and 3 and so as regards defendants 2 and 3, there is no cause of action for the Bank since the same has been barred by limitation.