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TMI Blog1967 (11) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... terest, on the amount overdrawn by them. On taking accounts from the date of the opening, that is to say from 6-2-1945 to 31-12-1948 it was found that a sum of ₹ 61,883-10 O. S. was due. The 1st defendant and his brother while drawing the mount of ₹ 1615-6-2 on 9-9-1947 confirmed the balance which was due to the Bank from them. The 1st defendant's brother died in June 1948. Defendants 2 to 4 are his legal representatives, being his wife and two sons. Dependent No. 3 on 4-1-1949 also admitted the debt and promised to repay the same. It was further stated that though the last day of payment 3-1-1947, yet in view of the acknowledgments made on 9-9-1947 and 4-1-1949 the suit was within time. It was, therefore, prayed that a decree for a sum of ₹ 61,883-3-10 be passed in favour of the plaintiff against the 1st defendant and against the assets of his brother in the hands of defendants 2 to 4. 3. The 1st defendant in his written statement denied to have opened any joint current account with the plaintiff-Bank and contended that he had no connection whatsoever with the transactions of his brother. He however, admitted that on 9-9-1947 his brother had obtained ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 3rd defendant was not personally liable to pay the amount. Issue 3 therefore, was found against the plaintiff. In regard to issue 4, it was found that Exhibit P. 2 was not forged. The 1st defendant failed to prove that the words alleged by him were added subsequent to the signature of the 1st defendant and his brother. The fourth issue, therefore, was found against the defendants. It was also found that the suit was not time barred in view of Exhibit P-2. The learned Judge consequently decreed the plaintiff's suit for ₹ 54, 956-15-8- O. S. that is to say e.g. ₹ 47, 105 -15-9, with costs and interest at 6 per cent per annum on the amount from 9-9-1947 until final payment. The suit was decreed against the property of Iftikhar Ali Khan in the hands of defendants 2 to 4. The rest of the claim of the plaintiff was dismissed. 7. The plaintiff did not file any appeal in so far as the part of his claim which was dismissed. It is the 1st defendant who has preferred this appeal. 8. The first problem to which we will address ourselves is as to whether the 1st defendant and his brother Iftikhar Ali Khan jointly opened the current and overdraft account with the bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sory notes which were admittedly collateral securities were marked during the course of evidence. Not only these promissory notes were produced, but there was considerable reference made to them during the examination of the witnesses produced by the parties. It is pertinent in this connection to note that once this suit was decreed ex-parte on 30-2-1953 (sic) in the lower Court. In that judgment also, reliance was placed upon these promissory notes, exhibits P-4 and P-5. It is only after the ex parte decree was set aside that 1st defendant's evidence was recorded. During the course of the 1st defendant's evidence also, these promissory notes were put to him. The lower Court has elaborately dealt with these collateral securities in its judgment. There can be thus no ground for the suggestion that the 1st defendant was not fully informed that this question of collateral security executed also by the 1st defendant would be raised and that both the promissory notes executed also by the 1st defendant would be raised and that both the promissory notes executed as collateral securities would be relied upon to prove the fact that the 1st defendant executed them and that he had hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken by surprise in circumstances where no injustice can possibly result to the 1st defendant. It may not be proper to drive the plaintiff to a separate unit. In the instant case, the 1st defendant admitted the execution of the promissory notes. No dispute was raised before us that they were not executed as collateral securities regarding the current and overdraft account opened by the 1st defendant and his brother. The 1st defendant in fact led evidencing regard to his contention that he put his signature on the promissory notes at the request of his brother and Prof. Kishen Chand. It could not therefore, be validly taken by surprise when the plaintiff's suit was decreed by the Court below on the alternative claim. Nor he would be taken by surprise if we uphold the decree of the Court below on this alternative claim. The learned Advocate for the 1st defendant could not point out as to in what respect the 1st defendant, in the presence of his version relating to the promissory notes, would have further said any thing or adduced any further evidence. We do not therefore, think that any injustice would be caused to the 1st defendant if we uphold the decree passed against him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in respect of whose default the guarantee is given is called the `principal debtor' and the person to whom the guarantee is given is called the `creditor'. A guarantee may be either oral or written. Section 127: Any thing done, or any promise made, for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee. 28. A careful reading of these two provisions would clearly indicate that the primary idea of suretyship is an undertaking to indemnify the debtor in case he does not fulfil his promise, the contract of guarantee being thus a contract to indemnify. The central point in such a case is to determine what was the contingency which the parties had in their minds when the contract of guarantee was entered into. In order to decide that question, it must be remembered that the law does not require a contract of guarantee to be necessarily in writing. It may be either oral or in writing . It might the even inferred from the course of conduct of the parties concerned. It is, however, to be borne in mind that whatever may be the form of the contract, it must be satisfactorily proved and that it must have consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-4. There was thus no past consideration at all. Although it is not in evidence as to what (was) responsible for getting the first promissory note executed. But in the absence of any evidence to the contrary, it would not be unreasonable to presume that the Bank was not willing to allow the 1st defendant and his brother overdraw the amount unless they executed a promissory note. That such a presumption can be drawn is clear from the decision in Srinivasa Raghava Ayyangar v. Ranganatha Ayyangar, 36 Mad LJ 618 = (AIR 1919 Mad 528) at page 621 (of Mad LJ); (at p. 529 of AIR). Even in the absence of evidence it was open to the lower Courts to have presumed from the circumstances of the case that the security bond would not have been given unless the creditor had expressed his dissatisfaction with the promissory not payable on demand. It has to be noted that on the day when the promissory note was executed if it was executed on 11-4-1945, the 1st defendant and his brother were allowed to draw ₹ 2210. No question, therefore, of past consideration for this security could arise. It was either a case of simultaneous consideration or a case where the Bank refused to advance ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... going back upon his admission made in reference to his document in his written statement. His contention that the last words `confirm the balance of S. S. 53341-9-6 as on 1-7-1947' were added subsequent to his signature or that they were forgery is not proved. They were there when the 1st defendant and his brother signed as is clear from the evidence of P. W. 1. On a perusal of that document we are satisfied that they are not written in different inks. They were in fact written by the same person. P. W. 1 says that the whole endorsement is in his handwriting. When once it is found, and we so hold, that Exhibit P-2 is true valid and genuine, no question of limitation can arise in this case. 33. For another reason also we do not think that the suit is barred by limitation. The nature of the account attracts, in our view, Art. 85 of the Indian Limitation Act. We were taken through the accounts. These accounts show that the 1st defendant and his brother were depositing money with the plaintiff-Bank from time to time and the Bank was allowing them to draw money in excess of the deposits with the result that the balance was frequently shifting in favour of one or the other. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Judge observed that the account book resembles exactly a bank Pass book where deposits of monies are made and withdrawal of monies take place from time to time, the balance being in favour of either of the customer or of the bank as the case may be at any given moment. In spite of this observation, the learned Judged agreed with the District Judge that there did not appear to the independent obligations on both sides and that a mere shifting of the account from one side to the other was not enough to constitute mutual obligations. With respect we find ourselves unable to subscribe to this view. While shifting of balances by itself may not be enough to bring the case within the purview of Article 85 of the Limitation Act, but if the account is current and overdraft where there has been reciprocity of obligations and shifting of balances from one side to the other, it would be a case which would squarely fall within the ambit of Art. 85. It is difficult to agree with the learned Judges that such a transaction resembles exactly to a bank pass book where deposits of monies are made and withdrawals of monies take place from time to time. In pure current accounts, that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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