OFFICIAL RECEIVER COIMBATORE Vs. A RAMALINGAM

JUDGEMENT

(1.) THE Official Receiver representing the estate of the debtors in I. A. No. 19 of 1977, pending before the Sub Court, Coimbatore is the revision petitioner.

(2.) MESSRS. United Finance, 299, Raja Street , Coimbatore, was conducting a chit fund in which the first defendant in the suit was one of the subscribers. He bid the chit and executed a promissory note as collateral security, for payment of the future instalments. Ex. A-1, dated 7. 4. 1972 is the said promissory note. Defendants 2 and 3 in the suit executed a deed of guarantee on the same date assuring the chit fund that in case the first defendants commits default in paying the amount, they would pay the amount. The relevant clauses in the deed of guarantee which are material for deciding this case read thus: 'further I/we hereby agree that you be at liberty to give the said A. Ramalingam such extension of credit or time for payment and take renewals as you may think proper, and to take such documents for the said sums from the said A. Ramalingam either in the style of the firm or in the individual name of the partners viz. , severally or jointly with others and that a release of any one or more of several sureties shall not discharge the firm, or other surety or sureties from its or his or their liability. I/we further agree that this does not affect your right to give him/them any additional loan on his/ their personal security or of others in dependent of this. Further I/we agree that undertaking responsibility of payments I/we dispense with notice or dishonour presentment for payment, etc. And I/we further agree that I/we or my/our survivors or heirs or legal representatives shall equally be liable to you for your advances to the said a. Ramalingam for all moneys due by him/ them and that this guarantee shall continue in force until it is terminated by a registered notice served on you at Coimbatore and that no other manner of service of notice shall be adopted or binding. If for any reason whatever you desire to close the transaction, I/we undertake to pay you on demand the balance standing to his/their debit at the time together with interest upto the date of payment.'

(3.) THE trial court, by judgment dated 31. 7. 1984, passed a decree against all the defendants and held that the acknowledgment of liability by the first defendant will enure to the benefit of the petitioner and hence the suit is not barred by limitation. It binds all the defendants. In this connection, it is also to be noted that the notice of demand was issued only on 29. 11. 1982, for it has also a bearing in deciding the question of limitation. It is Ex. A-3.