A.K. Shrivastava, J.@mdashThe guarantor/defendant No. 4 has filed this first appeal u/s 96 of the CPC against the judgment and decree passed by learned 3rd Additional District Judge, Indore, in C.O.S. No. 59-B/93, dated 30-10-1996 decreeing the suit of the plaintiff. The facts necessary for the disposal of this appeal are that plaintiff-Bank is having its banking branch at 9, Pipli Bazaar, Indore whose Manager is Shri Anil Goudbole and who is authorised to file the suit. The defendant No. 1 is a partnership firm and its Proprietor is Shri Vijay Kumar Bang. Defendant Nos. 2 to 4 are the guarantors of defendant No. 1. A sum of Rs. 2.10 lac towards cash credit loan (hypothecation) was allowed by the Bank to defendant No. 1 on 13-1-1992. Eventually, the promissory note of Rs. 2.10 lac towards cash credit hypothecation loan agreement was executed. Defendant Nos. 2 to 4 executed and submitted guarantee in favour of Bank for indemnifying the loan and accordingly executed the documents.
2. It is the further case of the plaintiff that defendants agreed to pay Rs. 23.75 paise per annum interest. The account of defendant No. 1 is maintained by the Bank indicating the details when the amount of loan was utilized by defendant No. 1 and in how and which manner the same was repaid. A sum of Rs. 2,90,002.40 paise is to be realized from the plaintiff till date of filing of the suit, which was filed on 19-4-1993. The defendants had made default in depositing the installments and did not deposit the monthly installments regularly, hence the suit was filed after sending the notice to them on 29-1-1993. The plaintiff sought relief against all the defendants jointly and severally as prayed in the relief clause of the plaint.
3. The defendant Nos. 1 to 3 filed a joint written statement while defendant No. 4-appellant filed separate written statement. According to appellant, he submitted the guarantee to defendant No. 1 upto the limit of Rs. 2.10 lac. But the Bank without obtaining consent of this defendant (appellant) extended the limit of loan to the extent of Rs. 5 lac resulting into his discharge on account of variance in terms of the contract. The other averments of the plaint were also denied.
4. Learned Trial Court after recording the evidence of the parties, decree the suit.
5. In this manner, this first appeal has been filed by the defendant No. 4.
6. The contention of Ms. Vandana Kashrekar, learned Counsel for appellant is that since without obtaining any consent from the appellant, the limit of loan was extended upto the extent of Rs. 5 lac, therefore, this arrangement would come under the provision of Section 133 of the Indian Contract Act, 1872 (in short "Contract Act") and if that would be the position since variance has been made without the consent of defendant No. 4 (surety) in terms of the contract between the principal debtor and creditor, the appellant has been discharged as a surety to the subsequent transaction on account of variance. Learned Counsel has also invited my attention to the testimony of Anil Goudbole who at the relevant time was Branch Manager of the plaintiff and has submitted that he has categorically admitted in his testimony that consent to extend the limit was never obtained from defendant No. 4-appellant and hence learned Trial Court has fastened the liability against the appellant contrary to Section 133 of the Contract Act.
7. Combating the aforesaid submission, it has been put-forth by learned Counsel for respondents that appellant is wrongly applying Section 133 of the Contract Act because the said provision is not applicable and the provisions of Sections 128 and 129 of the Contract Act are applicable in the present case because guarantee in the continued form was submitted by the appellant. Therefore, learned Trial Court did not err in passing the judgment and decree against present appellant alongwith other defendants and hence this appeal be dismissed.
8. Having heard learned Counsel for parties, I am of the view that this appeal deserves to be dismissed.
9. The only point for consideration to decide this appeal is that whether the provision of Section 133 of the Contract Act is attracted or not. True, under this provision if any variance is made without obtaining surety''s consent in terms of the contract between the principal debtor and the creditor the said action took between the creditor and principal debtor discharges the surety as to the subsequent transactions on account of variance of the contract. However, if this provision is read conjointly with the document (Exh. P-16) exhibited by defendant No. 4-appellant, this Court finds that he has given the guarantee in the nature of continuing security. Since this fact has been embodied in the general form of guarantee (Exh. P-16) exhibited between the Bank and appellant and if that would be the position, I am of the view that learned Counsel for appellant is incorrectly applying this provision. On bare perusal of the guarantee form (Exh. P-16) executed between the Bank and appellant this Court finds that a continuing guarantee has been given by the appellant and if that would be the position, according to me, Section 129 of the Contract Act would be applicable.
10. The continuing guarantee is one which extends to series of transactions and is not exhausted by or confined to single credit of transaction. Some other transaction may be unknown at the time of giving the guarantee (see : Halsbury''s Laws of England Fourth Edition Para 101).
11. According to Section 128 of the Contract Act, the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. On bare perusal of the document of guarantee (Exh. P-16) this Court finds that a continuing guarantee was executed by the appellant and, therefore, under Sections 128 and 129 of the Contract Act, the liability of the surety becomes co-extensive with that of principal debtor. In the instant case, the impugned transaction of extending the limit of the loan amount was unknown when the guarantee was given by the appellant and therefore, according to me, since there is a continuing guarantee in favour of Bank executed by the appellant, his liability endures until the credit or transaction contemplated by the parties and covered by the guarantee is exhausted or until the guarantee itself has been revoked. Hence, the submission put-forth by learned Counsel for appellant cannot be accepted.
12. The contract of not giving the continuing guarantee has neither been pleaded nor proved by the guarantor-appellant and, therefore, according to me, these two provisions of the Contract Act are applicable in the present case.
13. No other point has been pressed in this appeal by the appellant. Resultantly, this appeal fails and is hereby dismissed with no order as to costs.
