' National Bank of Pakistan, Gujjar Basti, Faisalabad was approached by M/s. Maan Crockery, through its sole proprietor, Mohammad Nazir, for a loan in the amount of Rs,15,000 and the same was sanctioned. Dilawar Hussain stood surety. The defendants, namely M/s. Maan Crockery, Muhammad Nazir and Dilawar Hussain, defendants No,1 to 3 in the suit, executed all the requisite documents on 17-7-65, and the amount of loan was received by the debtor, in instalments from 17th to 31st July, 1965, through three cheques, in the amount of Rs,12,500, Rs,2,000 and Rs,400. The defendants did not repay the amount of loan, in spite of demands claimed to have been made by the creditor. Alongwith interest, accumulated on the principal amount, the liability of the defendants was calculated as Rs,17,980.92, for recovery of which amount the National Bank of Pakistan filed a suit on 16-7-68 against M/s Maan Crockery Store, Muhammad Nazir and Dilawar Hussain Maan. The suit was contested by the defendants, and in the light of the pleadings of the parties the learned trial Court fixed the following issues for final determination:-
(1) Whether the defendant No, 2 obtained a loan of Rs,15,000 from the plaintiff and executed documents in this connection in favour of the plaintiff? OPP
(2) Whether defendant No, 3 signed the documents, not as a guarantor, but as a witness? OPD. No,3 (Objected to).
(3) Whether the plaintiff is entitled to recover an amount of Rs, 17,980.92 from the defendants? OPP
(4) Whether the plaintiff is entitled to charge interest at the rate of 9 per cent. per annum? OPP
(5) Whether the suit has been filed by a duly-authorised person ? OPP
(6) Relief.
2. Defendant No,3 was allowed to amend the written statement, giving rise to an additional issue, as under:-- 5-A. If the defendant No,3 is proved to be a guarantor, whether he has been absolved of his liability under sections 134/135 of the Contract Act?
2. Defendant No,2, appearing as D.W.1, had denied having availed of any loan facility, adding that he had been engaged by Maan Crockery Store, Jhang Bazar, Faisalabad, as a servant, and he had worked for 2-3 months only. His witness, D.W.2 had however, deposed that period of his service in the store was about one year. According to them, one Dr. Niaz Maan was the actual owner of the concern. D.Ws. 1 and 2 were contradicted by defendant No,3, appearing as D.W.5, as according to him, defendant No,2 had been doing business in the name and style M/s. Maan Crockery Store, and he (defendant No,3) was having his shop adjacent to the seat of business in question. Even in his written statement defendant No,3 had averred that defendant No,2 had applied for loan and executed the documents needed for the purpose. Defendant No,2, of course, had been introduced by Dr. Niaz Muhammad Khan, a customer of the Bank . Execution of different documents has rightly been taken to have been proved by the plaintiff bank on the strength of the evidence led in the trial Court. I would wholly endorse the observation and finding recorded by the learned trial judge to the effect that mere verbal denial of his liability made by defendant No,2, would not prove his plea, especially when he has been found to have executed different documents, at the time of obtaining the loan, following making of his application for the loan (Ex.P1). All these documents carried defendant No,2's signatures and he did not adduce any evidence to establish his assertion to the contrary.
4. Defendant No,3 denied that he had stood surety and had signed any document in that regard, adding that he was only a witness. The learned trial judge has remarked that he is a literate person, being a matriculate, and could not be taken to have signed the documents without reading and understanding the contents thereof, or without at least having been made to know the object and import of the entire exercise. Burden of proving that he had affixed his signatures on the documents as a witness and not as surety lay heavily upon defendant No,3, which he absolutely failed to discharge.
5. Statement of accounts, Exh.P14, prepared and tendered by the bank indicated unmistakably that an amount of Rs,17,980.92 was outstanding against the defendants at the time of institution of the suit. It can also not be disputed that the loanee had to pay interest at certain rate, the same being two per cent above the bank rate. The trial Court rightly held the defendants liable to be charged with interest at the rate of nine per cent per annum.
6. The main controversy between the parties, at the present stage, is the one condensed in the form of issue No, 5-A. It is to be pointed out that the suit had on 16-12-76 been decreed by Ch. Salamat Ali, Civil Judge Ist Class, Lyallpur (now Faisalabad); but Dilawar Hussain defendant No,3 had successfully impugned the decree dated 16-12-76, his appeal having been accepted on 18-6- 80 by Ch. Manzoor Hussain Basra, Additional District Judge, Faisalabad. National Bank of Pakistan, had preferred the present revision petition, assailing the soundness of the verdict given by the learned Additional District Judge, and had arrayed the defendants in the suit as respondents in the revision. Defendants Nos. 1 and 2 had not challenged the trial Court's decree dated 16-12-76, and must thus be treated to have acknowledged their liability. In so far as the plea of Dilawar Hussain, defendant No,3, who had stood surety in the matter, is concerned, the learned Additional District Judge has dealt with it and has accepted it. I must say that he ha done so in an absolutely perfunctory and laconic way. He has referred to and reproduced sections 134 and 139 of the Contract Act, and jumped to the conclusion that due to the conduct of the Bank, in having not sued the principal debtor for recovery of the loan amount within a year and having failed to check the hypothecated goods, remedy available to the surety had been impaired and he had been absolved of his liability. In this regard, the discussion made under issue No, 5-A by the learned trial Judge would be of immense advantage, having ably and exhaustively been undertaken. Suit was brought undeniably within the period of limitation, three years, provided by the statute. Loan facility had to be availed of for a year; but that did not mean that, if after availing of the facility, the loanee had not cared to discharge his liability and return the amount, the same stood liquidated. It was on failure or denial on the part of the debtor to pay back the amount that the creditor would have thought in terms of bringing a civil action against him. The bank was at liberty to have sued the debtor within a period of three years. There was no fresh agreement executed between the creditor and the debtor. How could, then, it be urged, as has been done by defendant No,3, petitioner before me, that the terms and conditions of the contract had been altered by the bank people without his knowledge and to his detriment? The learned trial Court has dilated upon the point in controversy and observed that the acts or omissions contemplated by section 134, Contract Act, are those envisaged by sections 39, 53, 54, 55, 63 and 67. The plaintiff-Bank had not held out any assurance to the debtors, defendants Nos. 1 and 2, that the latter would not be sued; and the agreement of guarantee, Exh.7, executed by defendant No, 3 clearly provided that the bank would be at liberty to take other securities, including collateral securities, and provisions of sections 134, 135 and 139, Contract Act therefore could not be invoked in aid of his plea by the petitioner. The plaintiff-Bank has not conducted itself in the matter in any way entitling the guarantor to get release from his liability. Section 137 contemplates that mere forbearance or avoidance or failure on the part of the creditor to sue the principal debtor or to avail of any other remedy against him does not, in absence of any provision in the guarantee, to the contrary, discharge the surety. That would indeed clinch the issue, and assumption of the surety that his liability stands discharged must be treated to be only a fallacy, an effort to evade an express liability. The learned trial Judge has rightly come to the conclusion that defendant No,3 continues to remain liable for payment of the amount of loan, severally and jointly with the principal debtor. Issue No, 5-A has correctly been decided; and there is not a speck of doubt about defendant No,3 having taken upon himself the obligation in question, as a guarantor, in actual practice.
7. Finding recorded by the learned appellate Court below, under issue No,5-A, is illusory and the same cannot be endorsed. On the contrary, the reasoning of the learned trial Judge is wholly relevant and the finding given is absolutely unexceptionable. I would approve of the same and would resultantly accept the revision petition with costs, restoring the decree awarded by the learned trial Court against the defendants, jointly and serverally. The plaintiff would be entitled to realize the principal amount, alongwith monthly rests and interest, till the date of recovery of the money.