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Suit No. 55 of 1981, decided on 17th November; 1985.

‑‑S. 6‑‑Civil Procedure Code (V of 1908), O.XXXVII, Rr. 2 & 3‑Creditor and debtor‑‑Recovery of loan‑‑Extension of time to debtor to repay loan‑‑Effect of extension of time to liability of guarantor By granting extension of time to debtor for repayment of loan, guarantor, held, would not stand discharged in view of specific agreement between such guarantor and' bank whereby guarantor had agreed that despite extension of time granted to debtor, guarantor would not stand discharged.

Sadruddin Huda for Plaintiff.

Mansoor Saeed for Defendant No. 3 (absent).

Esa Jaffer through Habibullah Samo for Defendant No. 2.

Date of hearing: 17th November 1985.

The present suit has been filed by the plaintiff‑Bank for recovery of Rs. 80,712 against the defendants. According to the plaintiff's plaint, a loan of Rs. 50,000 was granted to the defendant No.1 firm against hypothecation of goods and machinery on behalf of defendant No.1 and against the personal guarantees of defendants No. 2 and 3. Defendants Nos.1 and 3 were served but they did not make any appearance and by order, dated 9‑3‑1983, the suit was directed to proceed ex parte against them. On behalf of defendant No.2, Mr. HabibuIlah Samo appears. Certain issues were framed by order, dated 10‑3‑1985 but today Mr. Habibullah Samo states that he is admitting the execution of the guarantee by defendant No.2 and he is only taking up a legal plea on behalf of defendant No.2 based on section 135 of the Contract Act. Learned counsel has referred to para. 2 of the plaint and has submitted that according to the case of the plaintiff‑Bank, defendant No.1 was liable to adjust their loan account by 6‑6‑1977 in accordance with their agreement with defendant No.1 but defendant No.1 did not adjust the account and the suit was filed in 1980. According to .t,hg learned counsel by not taking action against defendant No.1 earlier and by, granting time to, defendant No.1, the plaintiff‑Bank has made a composition with .defendant No.1 and as such the guarantor, namely defendant No.2, stands discharged.

2. On the other hand Mr. Sadruddin Huda has referred to the terms of the guarantee, , which. is admittedly executed by defendant No. 2. Learned counsel relies upon various clauses of the guarantee including clauses 1, 4 and 5. Clause 5(iii) reads as follows:‑

"(iii) Any time given or extended to the Customer and/or any other person or persons including myself any of ourselves and the parties to any negotiable or other security, instrument, guarantee or contract or any other indulgence granted to or compromise, composition or agreement made with the Customer and/or any other person or person whether with or without my/our consent or notice to me/us."

In my view, these clauses amount to a specific agreement betwee the guarantor and the Bank whereby the guarantor had agreed that in spite of further time being given to defendant No.1, the guarantor will not stand discharged. In the circumstances no help can be taken by defendant No.2 from section 135 of the Contract Act.

3. The plaint is verified on solemn affirmation. Defendants Nos.l and 3 are already ex parte. Defendant No.2 has not denied the guarantee (Annexure "E" to the plaint) and the only. plea raised on behalf of the defendant No.2, on the basis of section 135 of the Contract Act, has not been accepted. In my view, the plaintiffs are entitled to a decree as prayed.

4. Suit No. 55/81 is decreed in favour of the plaintiff‑Bank and as against the defendants, jointly and severally, in the sum of Rs. 80,712 with interest at the rate of 13% per annum with quarterly rests from the date of the filing of this suit till realization. The plaintiff shall also be entitled to costs.

H.B.T. Suit decreed.

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