SAROJ RAO Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) THIS is an appeal by the guarantors against the judgment and decree in favour of respondent No. 1 Central Bank of India, in a sum of Rs. 35,210, with 17 1/2 per cent interest, per annum, held payable jointly and severally, by the principal borrowers, respondents No. 2 and 3 and the present appellants.

(2.) THE respondent bank brought a suit for recovery of the above amount on pleadings inter alia that it had sanctioned open cash credit limit of Rs. 30,000 to defendant No. 2 (respondent No. 3) Naveen Chandra Khanna, in the name and style 'M/s. Khannaji Garments'. The defendants No. 3 and 4 (appellants) were said to have stood as guarantors and were alleged to have executed a document of guarantee Ex. P. 7. Since the borrowers did not operate the account satisfactorily, there resulted an accumulation of debit balance of Rs. 35,210 against them, necessitating filing of the suit by the bank for recovery of the said amount. The present appellants filed two separate written statements, but took a common plea that signatures on the letters of guarantee were obtained from them by the principal borrower by misrepresenting that the guarantee was required in respect of the loan advanced in the sum of Rs. 3,000 only and not Rs. 30,000 as appears in the letter of guarantee. The suggestion made was that the figure 'Rs. 3,000' mentioned in the letter of guarantee Ex. P. 7 appears to have been increased to Rs. 30,000 at some subsequent stage with the conspiracy of the borrower and the bank authorities.

(3.) AT the outset, I may state that the amendment application in the appeal cannot be allowed for the simple reason that the application is highly belated and since it raises both questions of law and fact, the plea would necessitate retrial by remanding the case. That apart I find that the plea based on Sections 139 and 141 of the Contract Act is not available to the guarantors in view of the clear terms contained in the letter of guarantee in Clause 8 thereof, wherein it has been clearly stipulated that the liabilities of guarantors under the guarantee bond would not be discharged irrespective of their rights, if any under Sections 139/141 of the Contract Act. The applications for amendment of written statements are, therefore, rejected.