K.R.Vyas, J. - (1.) This appeal is preferred by the original defendant No. 1 in Special Civil Suit No. 40 of 1978 and has challenged the judgment and decree dated 31.3.1979 passed by the learned Civil Judge, Senior Division, Rajkot whereby the learned Judge was pleased to decree the suit filed by the respondents No. 1 and 2 for Rs. 21,287.69 with interest at the rate of 6% p.a. from the date of the suit till the date of payment on the principal amount of Rs. 15,000/-. The plaintiffs suit against the defendant No. 2 is ordered to be dismissed.
(2.) The facts of the plaintiffs case, briefly stated are as under : The plaintiffs invested Rs. 8,000/- and Rs. 7,000/-, in all Rs. 15,000/- for earning interest in the bank at Rajkot, appellant- defendant No. 1 and the defendant No. 1 issued two F.D.R.s in favour of the plaintiffs Bearing No. 230624 dated 15.3.1970 and 30683 dated.4.3.1968 respectively. The defendant No. 2 Shivkumar Jivram Vyas, a sole proprietor of Rasshala Aushadhashram, Gondal had requested bank-defendant No. 1 advance loan against hypothecation of Viking station wagon of defendant No. 2. On accepting the request of defendant No. 2, the defendant No. 1 advanced a loan of Rs. 21,8817- to the defendant No.
(3.) In the said transaction, the defendant No. 2 executed demand pronote dated 11.4.1970 in favour of defendant No. 1-bank. In the said transaction, the present respondents No. 1 and 2 (original plaintiffs) and one Ghanshyam Vaidya stood surety and guarantor for defendant No. 2 and in security of their guarantee, the plaintiffs delivered to defendant No. 1 bank, two suit F.D.R.s on 11.4.1970. It is further the case of the plaintiffs that the defendant No. 1 bank had got fresh document dated 7.4.1973 executed by defendant No. 2 in respect of the loan advanced by the defendant No. 1 bank to defendant No. 2 behind the back and without the knowledge or concurrence of plaintiffs guarantors and defendant No. 1 bank thereby got the period of limitation extended in respect of the loan transaction between the defendants No. 1 and 2. It is the case of the plaintiffs that they did not execute any fresh document or letter of guarantee in favour of the defendant No. 1 on 7.4.1973. In the circumstances, as defendants No. 1 and 2 had entered into fresh and/or renewed agreement on 7.4.1973, it superseded previous guarantor agreement executed by the plaintiffs guarantors on 11.4.1970 and thereby the present plaintiffs had stood discharged as guarantors from 7.4.1973 onwards. The plaintiffs, by letter dated 6.8.1973 to the defendant No. 1 bank requested to renew F.D.R. of Rs. 8,000/- in the name of the plaintiff No. 2 alone, it appears that thereafter the plaintiffs No. 1 and 2 and Ghanshyam J. Vyas, all the three guarantors received notice from the defendant No. 1 bank dated 15.7.1974 calling upon them to pay the amount of loan with interest advanced by defendant No. 1 bank to the defendant No. 2. In reply to the said notice on 19.7.1974, they contended and informed the defendant No. 1 that the guarantee of plaintiffs and Ghanshyam Vyas had come to an end and that the claim against the plaintiffs and Ghanshyam as guarantors was barred by the period of limitation in respect of the loan advanced by defendant No. 1 to defendant No. 2. The plaintiffs in fact called upon defendant No. 1 bank to return back the fixed deposit receipts. The plaintiffs again by notice dated 2.11.1974 addressed to the defendant No. 1 bank requested to return the amount of two F.D.R.s. Thereafter, the defendant No. 1 bank filed a suit being Special Civil Suit No. 34 of 1975 in the Court of Civil Judge, Senior Division, Rajkot for recovery of Rs. 21,278.41 against the original debtor-defendant No. 2 and the present plaintiffs as guarantors. The third guarantor Ghanshyam Vyas was not sued or joined as defendant in the said suit. The present plaintiffs, in the said suit, in their Written Statement Ex. 12 repeated their contention that their guarantee had come to an end and that the claim against them was barred by the period of limitation. In the said suit, on 19.7.1977, the defendant No. 1 bank submitted pursis by declaring that it did not wish to proceed further against plaintiffs guarantors i.e., defendants No. 2 and 3 in the said Civil Suit No. 34 of 1975. In the said pursis, the advocate for the present plaintiffs (original defendants No. 2 and 3 of Civil Suit No. 34 of 1975) endorsed that: "There is no objection to withdrawal of the suit subject to costs and subject to the right to recover F.D.R. amount with interest from plaintiff." The learned Judge also passed an order below pursis to the effect that: "Heard the parties' advocates. Defendants No. 2 and 3 are deleted as prayed for. No order as to costs." The defendant No. 1 bank compromised the said Civil Suit No. 34 of 1975 with original debtor, the present defendant No. 2 and submitted compromise in the suit granting time for payment of original loan amount. Even in the said compromise, the advocate for the present plaintiffs, advocate for the defendants No. 2 and 3 of previous Civil Suit No. 34 of 1975, made an endorsement as under : "I object to this compromise as the plaintiffs have no right to adjust F.D.R. amount." It is, therefore, contended by the plaintiffs in the present suit that the plaintiffs were not the consenting parties to the compromise made by defendants No. 1 and 2 in previous suit and, therefore, by virtue of Sec. 135 of the Indian Contract Act, guarantee of the present plaintiffs has come to an end and plaintiffs were discharged as guarantors by virtue of the provisions of law. It is further the contention of the plaintiffs that as the previous suit against the plaintiffs as guarantors having been withdrawn and plaintiffs having been deleted as defendants in the previous suit and as no decree is passed against the present plaintiffs in the previous suit, it amounts to dismissal of previous suit against the plaintiffs. The plaintiffs, in the circumstances, are entitled to return of F.D.R. amount of Rs. 15,000/- along with interest up to the date of the suit from the defendant No. 1 bank as guarantee executed by plaintiffs was not submitted at all. Therefore, the bank has no right to appropriate or to adjust two F.D.R.s towards the dues payable by the defendant No. 2 to defendant No. 1 of the original loan transaction between them. The plaintiffs, therefore, filed the present suit to recover the amount of two F.DR.s along with interest of Rs. 21,287.69 against the defendant No. 1 without prejudice to the claim preferred against the defendant No. 1 bank. The plaintiffs, in the alternative, claimed that in case the Court comes to the conclusion that the plaintiffs are not entitled to any amount from defendant No. 1 bank, the plaintiffs prayed for a decree of Rs. 21,287.69 against the original debtor, the defendant No. 2 as he is under legal obligation to indemnify the present plaintiffs who stood guarantors for him.;