9911796707
TMI Blog2008 (3) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 12th of November, 1984 passed by the Additional District and Sessions Judge dismissing the suit filed against the appellant who was a guarantor in respect of loans advanced by the Punjab National Bank [in short 'the Bank'] - respondent No. 1 to M/s Rangaa Trades and Exports Pvt. Ltd. - respondent No. 2 in this appeal. By the impugned judgment, the High Court affirmed the decision of the Additional District and Sessions Judge and held that the suit filed by the Bank be decreed against the original defendant Nos. 1 to 4 for a sum of ₹ 42,874/- including interest at the rate of 19.5 per cent per annum with quarterly rests from the date of filing of the suit till realization. At this stage, we may note that the said decree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges and expenses and in the case of legal costs, costs as between attorney and client occasioned to the Bank by reason of omission, failure or default temporary or otherwise in such payment by the Borrower or by the Guarantors or any of them including costs (as aforesaid) of enforcement or attempted enforcement of payment by suit or otherwise or by a sale or realization or attempted sale or realization of any security for the said indebtedness or otherwise howsoever or any costs (which costs to be as aforesaid) charges or expenses which the Bank may incur by being joined in any proceeding to which the Bank may be made or may make itself party either with or without others in connection with any such securities or any proceeds thereof. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant as well as the other defendant Nos. 1 to 4 and 6. 5. The learned Counsel appearing for the appellant, relying on Section 130 of the Act, sought to argue that in view of the fact that Section 130 clearly provides for revocation of a continuing guarantee as to future transactions by notice to the creditor and as in the present case, the guarantee was revoked long before the loan was given and the suit filed, the appellant was not liable to pay the decretal amount to the Bank. Accordingly, he submitted that the High Court was not justified in reversing the judgment of the trial court and in decreeing the suit against the appellant. This submission of the learned Counsel for the appellant was seriously contested by Mr. Dhruv Mehta, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 130 of the Act shall override the agreement of guarantee. In our view, the agreement cannot be said to be unlawful nor the parties have alleged that it was unlawful either before the Trial Court or before the High Court. Let us, therefore, keep in mind that the agreement of guarantee entered into by the appellant with the Bank was lawful. 7. The question is whether the appellant, having entered into such an agreement of guarantee with the Bank, had waived his right under the Act. In our view, the High Court has rightly, held and we too are of the view that the appellant cannot claim the benefit under Section 130 of the Act because he had waived the benefit by entering into the agreement of guarantee with the Bank. In Shri Lachoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here cannot be any dispute that the appellant had clearly agreed that the guarantee that he had entered into with the Bank was a continuing guarantee and the same was to continue and remain in operation for all subsequent transactions. Having entered into the agreement in the manner indicated above, in our view, it was, therefore, not open to the appellant to turn around and say that in view of Section 130 of the Act, since the guarantee was revoked before the loan was advanced to defendant Nos. 1 to 4 and 6 fee was mot liable to pay the decretal amount as a guarantor to the Bank as his guarantee had already stood revoked In this view of the matter, we are not in a position to accept the submissions of the learned Counsel for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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