N. C. SHARMA, J. - (1.) HEARD the learned counsel for the parties.
(2.) FOUR fold arguments were advanced by the learned counsel for the defendant No. 2 - appellant. The first argument advanced was that the guarantee given by the appellant by Ex. 3 was not a continuing guarantee within the meaning assigned to that term by section 129 of the Contract Act. The second argument advanced was that the suit of the plaintiff as against the appellant was barred by limitation. The third argument was that the plaintiff based his cause of action on the novation of contract entered into between him and defendant No. I on October 26, 1976 to which the appellant was not a party. Last contention advanced was that the appellant was discharged from his liability as surety under section 141 of the Contract Act. Much emphasis was laid on the language of section 129 of the Contract Act which provides that a guarantee which extends to a series of transaction is called a continuing guarantee. It was urged that in the instant case there was only single transaction of advancing an amount of Rs. 22,150/- as loan by the plaintiff Bank to the defendant No. 1 for the purpose of a Fiat car, and there were no series of transaction between the plaintiff Bank and the defendant No. 1. On account of this reason, it was urged that the guarantee furnished by the appellant was not a continuing guarantee. The language of section 129 of the Contract Act cannot be interpreted to indicate that in order that a guarantee may be a continuing guarantee, there should be independent and new transactions having no relations with the previous transaction. What is only necessary is that the guarantee should extend to a series of transactions. Thus a continuing guarantee covers all the transactions including those arising in the future which are within the description or contemplation of the agreement, until the expiry or termination of the guarantee. Whether a guarantee is specific and extends to a single transaction or it extends to a series of transactions turns upon the construction of the language of each particular transaction. A bare perusal of the guarantee under Ex. P. 3 goes to show that not only it mentions that the guarantee shall be continuing guarantee but it expressly provides that the Bank shall have full discretionary power without an assent or knowledge of the guarantor and without discharging or in any way affecting his liability under the guarantee from time to time and at any time to negotiate with the debtor and settle or alter the terms and conditions or to renew the terms of contract between the creditor and the debtor. On a proper construction of the guarantee-deed and specially its clause (iv it is abundantly clear that the guarantee extends to a series of transactions which may arise in future between the plaintiff Bank and the defendant No. 1 and novation of contract between them was within the contemplation of the guarantee agreement. The guarantee in question, therefore, was rightly held by the trial court to be a continuing guarantee. So far as the question of limitation is concerned, since the guarantee was a continuing guarantee, it will start from October 26, 1976. The suit was filed on October 15, 1979 and it was well within limitation. As to the third contention, suffice it to state that the plain that to be read as a whole and we cannot confine ourselves to what has been pleaded in para 13 of the plaint. In paras 3 and 4 of the plaint, the original transaction was mentioned and in para 5 of the plaint it was clearly pleaded that the appellant gave a continuing guarantee for defendant No. 1. On a reading of the plaint as a whole it discloses a cause of action against the appellant on the basis of continuing guarantee. As to the last contention, the learned counsel for the appellant relied upon the decision in State Bank of Saurashtra Vs. Chitranjan Rangnath (1 ). In that case it was concurrently found that the Bank was highly negligent with regard to the safe keeping and handling of pledged goods and the security of the pledged gods was lost on account of the negligence of the Bank. In the instant case, the hypothecation of the Fiat Car continued even under the novated contract entered into on October 26, 1976. It cannot, therefore, be said that the plaintiff Bank lost the security or parted with it. The appellant does not stand discharged under section 141 of the Contract Act.
(3.) THUS all the four contentions advanced by the learned counsel for the appellant before me have no merit in them. This first appeal filed by the guarantor has no force in it and it is dismissed with costs. .;