NASIB SINGH Vs. BANK OF INDIA

JUDGEMENT

(1.) BRIJ Nandan, respondent No, 3 herein, took an advance of Rs. 8000/ - from respondent No 1, the Bank, and agreed to repay the same with interest @l% with minimum of 10% per annum. Appellant herein stood as guarantor for respondent No.3 and executed guarantee deed to that effect. The Bank thereafter brought a suit against respondent 2&3 herein and appellant for recovery of Rs. 8064.24 P, the amount which remained due against them at the time of institution of the suit Respondents 2&3, the principal borrower did not choose to contest the case and the appellant, however, disputed his liability on the ground that principal borrower had pledged his tools, implements as security to the Bank under the deed of hypothecation dated 21 -4 -1978 and the Bank by its action allowed the said security lost as it did not exercise any supervision in protecting the security. According to him under the abovesaid circumstances his surety stood discharged.

(2.) THE learned Sub -Judge Jammu, who tried the suit, farmed the following issue for consideration: -

(3.) I have heard the learned counsel for the parties and "perused the record before me. Mr Vinod Kumar appearing for Mr. Kotwal has argued that principal borrower had hypothecated the material; including implements of the factory ect. with the plaintiff -Bank but the Bank did not take any step to preserve the same and this action of the Bank amounted to discharge of appellant guarantor. In support of his contention he has referred to AIR 1965 My sore 209 and AIR 1967 SC 1105. Mr. Chopra learned counsel for the respondent Bank has, however, contended that there is no evidence on record to show that the Bank in any manner was negligent in protecting the hypothecated goods and in fact the principal borrower removed all the goods in order to defraud the bank and also did not pay the suit amount and, according to him, under such circumstances the liability of the appellant as guarantor is not discharged at all.