Mishra,
a Taxi Driver approached Bank of India. Ranchi Branch, for giving him loan for
purchasing a new ambassador Car for plying as taxi. The Bank agreed to advance
loan on certain terms and conditions, which were accepted by him. Mishra, thereafter executed a promissory note
for Rs. 16,000/-on 9/6/1972 promising to repay the loan with interest @ 4% per
annum over Reserve Bank of India rate, subject to minimum of 9% per annum.
Raj Kishore Lal and Baikunth Mishra executed
letters of guarantee simultaneously on 9.6.1972 itself. On 1.6.1976, Mishra,
the principal-debtor acknowledged in writing to pay the total dues outstanding
against him, but failed to liquidate the dues. Hence, Bank of India, filed
Money Suit No. 105 of 1978 for a decree of Rs. 20,461.91 paise with interest
pendente lite on future @ 11% per annum, Mishra, the principal-debtor was
impleaded as Mishra and Raj Kishore Lal and Baikunth Mishra the two guarantors
were made in suit.
Mishra and Raj Kishor Lal inspite of valid set i.e. of summons, failed
to appear and contest the suit. Baikunth Mishra appeared, filed written
statement and contested the suit. He admitted himself to be one of sureties for
Mishra in respect of original agreement entered on 9.6.1972. He pleaded about
aforesaid acknowledgment dated 1.6.1976 and prayed to dismiss the suit as
against him. Plaintiff-bank has, therefore, filed the present appeal.
In the result, this appeal is allowed and impugned judgment and decree
are modified to the extent that suit is also decreed oh contest as against Raj
Kishor Lal and ex parts as against Baikunth Mishra no cost. An authority is established by the condition referred
to above and the guarantor is also bound by the aforesaid acknowledgment of the
principal debtor and, therefore, the suit was not barred.
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