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Original Civil Suit No. 12 of 1950, decided on 12th April, 1950, decided on 12th April, 1950.
Civil Procedure Code (V of 1908), O. 37 r. 2‑Suit ova basis of letter of guarantee‑Pot suit upon bill of exchange, hundi or promissory note.
A. I. R. 1925 Sind 9 and A. I. R. 1928 Sind 86 held not applicable.
I do not think A. I. R. (1925) Sind 9 or A. I. R. (1928) Sind 86 which Mr. Faruqi has cited are of much assistance.
Here the plaintiff Bank is the payee of a promissary note executed by (1) Asian Laboratories, Ltd., which is now in liquidation and (2) defendant 1. Defendant 2 has executed separate a letter of guarantee in favour of the plaintiff in a comprehensive form, guaranteeing to the plaintiff Bank the ultimate balance or balances which may be due to it by Asian Laboratories, Ltd., to the extent of Rs. 10,500.
It seems to me that the plaintiff Bank has a cause of action against defendant 2 only upon this letter of guarantee. This is not a case of an "aval", i.e., that of a third person putting his signature upon a bill or note otherwise than as an executant, in order to guarantee payment, a case to which section 56 of the Bills of Exchange Act, 1884 might apply. Had that been the case here, there might have been some foundation for saying that the suit was upon the promissory note which the guarantor had endorsed.
Order 37 rule 2 applies to "suits upon bills of exchange, hundis or promissory notes," I do not see that the plaintiff's suit against defendant 2 is upon the promissory note in suit and I therefore, hold that the suit against him cannot proceed under order 37 Civil Procedure Code. Summons to defendant 2 will therefore issue in the ordinary form.
K.M.A Order accordingly.
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