Banerjee, J. - (1.) This is an appeal against an order of Ray, J., disposing of an application for final judgment, under Chap. XIIIA of the Original Side Rules, with an order upon the Defendant to furnish security for Rs. 34,000 within six weeks.
(2.) Facts in so far as material are hereinafter stated in brief. The Plaintiff -Respondent company carry on the business of marketing and distribution of petroleum products and of selling such products through dealers and distributors. One of their distributors was Banwarilal & Brothers at Rourkela in the State of Orissa. The said Banwarilal & Brothers became indebted to the Plaintiff -Respondent for a sum of Rs. 77,562 -74 P. on account of price of petroleum products delivered by the Plaintiff company. The Defendant Appellant is the uncle of Banwarilal, the proprietor of Banwarilal & Brothers. On the Plaintiff -Respondent having had decided to take steps against the Banwarilal & Brothers, the Defendant -Appellant approached the Plaintiff -Respondent company and induced them to desist from taking such steps, by offer of the following guarantee, which was accepted by the Plaintiff -Appellant: In consideration of your having, at my request, agreed (?) not to take any steps against Messrs. Banwarilal and Brothers, Rourkela, in connection with a sum of Rs. 77,562 -74 (Rupees Seventy -seven Thousand Five Hundred and Sixty Two and Seventy Four Paise only) due from them to you on account of Petroleum products sold and delivered to them I, Hari Shankar Banka, son of Late Mr. Juthalal Banka of Ambagan, Rourkela, hereby undertake and guarantee to make payment to you of the said sum of Rs. 77,562 -74 P. payable by the said Messrs. Banwarilal and Brothers, Rourkela, in the manner following: (i) A sum of Rs. 25.000 (Rupees Twenty Five Thousand only) will be paid by me on or before the 9th December, 1964. (ii) A further sum of Rs. 18,000 (Rupees Eighteen Thousand only will be paid by me on or before 28th December, 1964. (iii) The balance then remaining due shall be paid by me in 2 (Two) monthly instalments of Rs. 17,000 (Rupees Seventeen Thousand only) and Rs. 17,562 -74 (Rupees Seventeen Thousand Five Hundred and Sixty Two and Seventy Four Paise only) the first of such monthly instalments to be paid on or before January 25, 1965 and the last instalment to be paid on or before February 25, 1965. (iv) In default of payment of any amount of instalments in the manner as aforesaid, the entire amount then remaining unpaid shall become payable by me to you at once and you will be at liberty to stand upon your legal rights. A contract of guarantee to the above effect was executed on December 7, 1964. The Defendant -Appellant made the first two payments of Rs. 25,000 and Rs. 18,000 as agreed upon but failed to pay the remaining two instalments of Rs. 17,000 and Rs. 17,562 -74 P. Thereupon, the Plaintiff -Respondent filed suit No. 489 of 1965, against the Defendant -Appellant for recovery of Rs. 34,562 -74 P. being the amount of the balance due under the contract of guarantee, with interest and costs.
(3.) The Defendant -Appellant filed a written statement and therein alleged, inter alia, as hereinafter stated: Para 4. (a) In or about November 1964 the Plaintiff arbitrarily, wrongfully and in breach of the said agreement dated 27th June, 1958, stopped the supply of its products to the Banwarilal & Brothers. (b) With a view to ascertain the reason for such illegal act and to obtain restoration of supply of the said goods the Defendant, for and on behalf of his nephew the said Banwarilal Agarwalla, called at the office of the Plaintiff in Calcutta on or about 7th December 1964. At the said office the Plaintiff through the servants or agents represented to the Defendant that unless the Defendant signed the said document being annexure 'A' to the plaint, and agreed to make payment in terms thereof the Plaintiff, would institute criminal proceedings and/or civil actions against the said Banwarilal Agarwalla and would also implicate the Defendant in such proceedings or actions. (c) Out of concern for the safety and welfare of his said nephew and out of fear and anxiety for his own personal safety and reputation, the Defendant affixed his signature to the said document. The Defendant denies that the stamp paper on which the letter is set out was sold to or purchased by the Defendant or that the Defendant has anything to do with premises No. 7, Canning Street, Calcutta. The said document was prepared by the Plaintiff, its servants, or agents and the Defendant merely affixed his signature thereto in the manner and in the circumstances aforesaid. (d) At or before the execution of the said document it was orally agreed by and between the Defendant and the Plaintiff, its servants or agents that not only would the Plaintiff not commence criminal proceedings or any civil action against the Defendant or his said nephew Banwarilal Agarwalla but that the Plaintiff would commence and continue the supply of its products to the said Banwarilal & Brothers at Rourkela. (d) Thereafter on or about 9th December, 1964, under similar duress, coercion, intimidation, fear and threat of criminal prosecution and civil action the Defendant paid to the Plaintiff a sum of Rs. 25,000 on the clear understanding and/or arrangement or agreement that the Plaintiff would supply its products to the said Banwarilal & Brothers and would not cause any trouble or harassment to the Defendant or to his said nephew by way of criminal proceedings or civil action or otherwise or at all. Para 5. With further reference to paragraph 3 of the plaint the Defendant states that upon the taking of true and faithful accounts between the Plaintiff and the said Banwarilal & Brothers in respect of their dealings and transactions under the said agreement dated the 27th July, 1958, and in view of the payment made by the later to the former nothing whatever is due or payable by the said Banwarilal & Brothers to the Plaintiff. The Defendant states that at the time of institution of this suit and/or even prior thereto the said Banwarilal & Brothers was not a debtor vis -a -vis the Plaintiff and by reason thereof the guarantee, if any, given by the Defendant to the Plaintiff under the said document dated the 7th December, 1964, has become non -existent, null and void and the Defendant has been discharged from any liability or obligation to the Plaintiff in respect of the said document. Para 6. With reference to paragraph 4 of the plaint the Defendant denies that the Plaintiff did not take any steps against Banwarilal & Brothers as falsely alleged therein. The Defendant states that the Plaintiff, its servants or agents maliciously and illegally failed and neglected to commence the supply of Petrol and Petroleum products to the said Banwarilal & Brothers and thereby caused serious loss and damage to the said business. Thereupon, on November 24, 1965, the Plaintiff -Respondent took out a Master's summons, under Chap. XIIIA of the Original Side Rules, for an order of refusal of leave to the Defendant -Appellant to defend the suit and for a final judgment for the amount claimed, on the ground that there was no defence to the claim. The Defendant -Respondent showed cause thereto alleging that there was a good and complete defence to the claim. The nature of the defence as emphasised upon was the same as in written statement but with the following two additions, namely, (i) that far from anything remaining due and owing by Banwarilal & Brothers to the Plaintiff, the Plaintiff was indebted to Banwarilal & Brothers for Rs. 39,364 -27 P. under an agreement dated June 27, 1958, and (ii) that Sales Manager and Depot Operator of the Plaintiff at Rourkela were prosecuted under Sec. 420 read with Sec. 34 of the Indian Penal Code and the latter was convicted and sentenced to a term of imprisonment as well as to fine, on the evidence, inter alia, of accounts submitted by Banwarilal & Brothers.;