PRINCESS USHADEVI MALHOTRA Vs. BHAGWANDAS TIWARI

JUDGEMENT

(1.) THIS is an appeal by the plaintiffs from the judgment and decree of the additional District Judge. Indore. dismissing their suit as against the surety defendant No. 2 and decreeing it only against the principal debtor defendant No. 1. The questions for decision are whether in the special circumstances fee dealings equivalent Citation: between the principal debtor and the plaintiffs between February and July, 1955, can be described as the grant of time or composition coming under Section 135 or the acceptance of additional security which by implication discharging the original surety, or amount to acts calculated to prejudice the interests of the surety in the manner set out in Section 139 of the Contract Act.

(2.) THE following facts of the case are practically common ground and though there are one or two obscurities in matters of detail they have not been raised in the pleadings of either party as justifying its respective case.

(3.) THE plaintiffs are the trustees in charge of certain properties for the benefit of princess Usha Devi who has since the filing of the suit become the Ruler of Indore. The trustees own a stretch of grass land in two villages outside Indore about the identity of which there is no controversy Jhatalomal Ahuja a businessman at indore took lease of the grass of that land for a total consideration of Rs. 19,500 in the season of 1955 This was to be paid in three instalments of Rs 6,500 each, on the 15th of the three months February, March and April. In one or two papers 15th January has been mentioned as the due date for the first instalment: but this is incorrect according to both the parties. On the agreement being signed (p. 51 on 18-9-1954 by Ahuja there was a demand for security and accordingly the defendant No. J Rai Sahib Bhagwandas to which he became the surety and agreed to pay the instalments in case the principal debtor Ahuja failed. He also made himself expressly liable personally for any amount outstanding against Ahujs on account of this lease. It may be noted even here, that the suit was against Ahuja as the principal debtor and Tiwari as the surety, though it is stated by the plaintiffs and in a measure admitted by both the defendants that Tiwari was a partner in this venture, according to the latter with certain reservations. Besides his liability as a partner he made himself liable as a surety and has been sued in that capacity. The plaintiffs have therefore not been allowed to raise as an additional ground Tiwari's liability as a partner irrespective of whether or not he has been discharged as a surety.