ANANTA KUMAR NANDI Vs. BANK OF BARODA

JUDGEMENT

(1.) The plaintiffs No. 1, Bank brought a suit for realisation a sum of Rs.85,862.48p. The defendant No. 1 is a firm and the defendant No.2 is the proprietor of the firm. The defendant No. 2 took a loan of Rs. 10,000/- being a cash credit for development of his business. The defendant No. 3, the present appellant stood as guarantor and executed a deed of guarantee. Subsequently the defendant No. 2 look additional advance of Rs.20,000/- with some overdrafts facilities were also enjoyed by defendant No. 1 and 2. The defendant No. 2 acknowledged the liability. As the defendants failed to pay the amount, th suit was filed for realisation of the money. A written statement was filed on behalf of the defendant No. 3, the guarantor. As many as 5 issues were framed in the suit. None of the defendants contested the suit, (save and except defendant No. 3 who filed only written statement). The suit was decreed cxparte. The judgment though it is an exparte decree, the learned Judge heard argument of both sides. The suit was decreed against defendant No. 3, present appellant only for an amount of Rs. 10,000/- being the amount mentioned in the deed of guarantee. Hence, this appeal.

(2.) I have heard Mr G.P. Bhowmik, learned advocate for the appellant and Mr S.P. Deka, learned advocate for the respondents.

(3.) After hearing the learned counsel for the parties, I do not find any merit in this appeal and the same shall stand dismissed. The admitted position is that the defendant No. 3, the present appellant was a guarantor for the amount for which the suit was decreed and the suit was also filed within time. Mr Bhowmik wanted to make point that because of the subsequent enhancement of the limit and overdraft facility granted to the defendants No. 1 and 2, there was a novation of contract and his liability stands discharged by virtue of Section 133 of the Contract Act. This submission of Mr Bhowmik has no force inasmuch as a person is discharged by variation or modification in issue of the contract only when the said modification, variation causes prejudice to the person. That is not the case in hand. Mr Bhowmik relies on AIR 1990 Madras 115 (The Indian Bank-Vs-S. Krishnaswamy and ors.). What happened in that case was that the Bank earlier gave loan to a mill and the mill was later on taken over by the Government and the Bank made contract with the Government, but that was not made known to the guarantor and it was on this facts of that case a Division Bench of Madras High Court pointed out as follows: