(LAL) BEHARI LAL Vs. ALLAHABAD BANK, LTD

JUDGEMENT

(1.) This is an appeal by one of the defendants, L. Behari Lal, against the decree passed by the learned Subordinate Judge of Cawnpore, awarding to the plaintiff- respondent, the Allahabad. Bank, Ltd., the balance due on a (promissory note. It is admitted that this promissory note for Rs. 25,000, dated 5 February 1923, was executed both by the defendant-appellant, L Behari Lal, and by the other defendant Jagan Nath. Subsequently to the execution of this promissory note, Jagan Nath paid a sum of Rs. 5,000 to the Bank on 2 August, 1923, and after that date he disappeared; and on the application of the appellant insolvency proceedings were taken against Jagan Nath. The appellant has made a number of payments to the Bank subsequently, and the present suit was instituted after these payments had been made by the appellant.

(2.) The chief point argued before us on behalf of the appellant is that his liability was only that of a surety and not of a principal. If this proposition were conceded, it was argued for the appellant that the Bank had given time to Jagan Nath without the consent of the appellant and that, therefore, the appellant would be discharged from liability. The learned Counsel relied on the fact that the appellant had signed the promissory note and the receipt for Rs. 25,000 on 24 January 1923, and that it was not until 5 February 1923, that a period was fixed for the repayment of the loan in a letter (Ex. E) which was written by Jagan Nath alone to the Bank. That letter states that Rs. 5,000 would be repaid in six months, and the balance within one year from date. The case for the appellant now put forward is that the appellant was not aware of the period fixed in this letter, and, therefore, that the appellant intended that the loan should be payable on demand. We find, however, that this point has not been supported by any statement to that effect by the appellant in the evidence which he gave before the lower Court. Nor is there any evidence to that effect on the record. In fact, the appellant admits that on a date subsequent to 16 February 1925, he initialled the alteration of the date of the promissory note from 5 January, to 5 February, that is, 11 days subsequent to the letter of 5 February, and the natural presumption is that the appellant was fully aware of the period fixed for repayment in that letter. We may also refer to the fact that the promissory note states that interest is to be at 9 per cent per annum on the half-yearly rests. Accordingly it is clear that the promissory note contemplated that the loan would be for a period of more than one half year, and, therefore, the argument that the appellant was under the impression that the promissory note was only intended to be on demand is an unsound argument. We may also allude to the fact that in a letter, dated 23 January 1923, Ex. G, the Allahabad Bank in Cawnpore wrote to the head office stating that the period for which the loan was required was 18 months. Subsequently the head office decided that the period of loan should not be more than one year. We consider that these facts could not have been hidden from the knowledge of the appellant; and the appellant has not given evidence that he was unaware of these facts.

(3.) We may also note that the case, as put forward in the written statement, is that the plaintiffs Bank gave time to defendant 2, the principal debtor, without obtaining answering defendant's assent to it: para. 19 of the written statement.