UNITED COMMERCIAL BANK Vs. LALITABEN JIVARAMBHAI

JUDGEMENT

(1.) This appeal is preferred by the original defendant No. 1 in Special Civil Suit No. 40 of 1978 and has challenged the judgment and decree dated 31.3.1979 passed by the learned Civil Judge, Senior Division, Rajkot whereby the learned Judge was pleased to decree the suit filed by the respondents No. 1 and 2 for Rs. 21,287.69 with interest at the rate of 6% p.a. from the date of the suit till the date of payment on the principal amount of Rs. 15,000/-. The plaintiffs suit against the defendant No. 2 is ordered to be dismissed.

(2.) The facts of the plaintiffs case, briefly stated are as under : The plaintiffs invested Rs. 8,000/- and Rs. 7,000/-, in all Rs. 15,000/- for earning interest in the bank at Rajkot, appellant- defendant No. 1 and the defendant No. 1 issued two F.D.R.s in favour of the plaintiffs Bearing No. 230624 dated 15.3.1970 and 30683 dated.4.3.1968 respectively. The defendant No. 2 Shivkumar Jivram Vyas, a sole proprietor of Rasshala Aushadhashram, Gondal had requested bank-defendant No. 1 advance loan against hypothecation of Viking station wagon of defendant No. 2. On accepting the request of defendant No. 2, the defendant No. 1 advanced a loan of Rs. 21,8817- to the defendant No.

(3.) In the said transaction, the defendant No. 2 executed demand pronote dated 11.4.1970 in favour of defendant No. 1-bank. In the said transaction, the present respondents No. 1 and 2 (original plaintiffs) and one Ghanshyam Vaidya stood surety and guarantor for defendant No. 2 and in security of their guarantee, the plaintiffs delivered to defendant No. 1 bank, two suit F.D.R.s on 11.4.1970. It is further the case of the plaintiffs that the defendant No. 1 bank had got fresh document dated 7.4.1973 executed by defendant No. 2 in respect of the loan advanced by the defendant No. 1 bank to defendant No. 2 behind the back and without the knowledge or concurrence of plaintiffs guarantors and defendant No. 1 bank thereby got the period of limitation extended in respect of the loan transaction between the defendants No. 1 and 2. It is the case of the plaintiffs that they did not execute any fresh document or letter of guarantee in favour of the defendant No. 1 on 7.4.1973. In the circumstances, as defendants No. 1 and 2 had entered into fresh and/or renewed agreement on 7.4.1973, it superseded previous guarantor agreement executed by the plaintiffs guarantors on 11.4.1970 and thereby the present plaintiffs had stood discharged as guarantors from 7.4.1973 onwards. The plaintiffs, by letter dated 6.8.1973 to the defendant No. 1 bank requested to renew F.D.R. of Rs. 8,000/- in the name of the plaintiff No. 2 alone, it appears that thereafter the plaintiffs No. 1 and 2 and Ghanshyam J. Vyas, all the three guarantors received notice from the defendant No. 1 bank dated 15.7.1974 calling upon them to pay the amount of loan with interest advanced by defendant No. 1 bank to the defendant No. 2. In reply to the said notice on 19.7.1974, they contended and informed the defendant No. 1 that the guarantee of plaintiffs and Ghanshyam Vyas had come to an end and that the claim against the plaintiffs and Ghanshyam as guarantors was barred by the period of limitation in respect of the loan advanced by defendant No. 1 to defendant No. 2. The plaintiffs in fact called upon defendant No. 1 bank to return back the fixed deposit receipts. The plaintiffs again by notice dated 2.11.1974 addressed to the defendant No. 1 bank requested to return the amount of two F.D.R.s. Thereafter, the defendant No. 1 bank filed a suit being Special Civil Suit No. 34 of 1975 in the Court of Civil Judge, Senior Division, Rajkot for recovery of Rs. 21,278.41 against the original debtor-defendant No. 2 and the present plaintiffs as guarantors. The third guarantor Ghanshyam Vyas was not sued or joined as defendant in the said suit. The present plaintiffs, in the said suit, in their Written Statement Ex. 12 repeated their contention that their guarantee had come to an end and that the claim against them was barred by the period of limitation. In the said suit, on 19.7.1977, the defendant No. 1 bank submitted pursis by declaring that it did not wish to proceed further against plaintiffs guarantors i.e., defendants No. 2 and 3 in the said Civil Suit No. 34 of 1975. In the said pursis, the advocate for the present plaintiffs (original defendants No. 2 and 3 of Civil Suit No. 34 of 1975) endorsed that: