SITA RAM GUPTA Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) Leave granted.

(2.) This appeal arises out of the final judgment and decree dated 11th of May, 2006 passed by the High Court of Delhi at New Delhi in RFA No.71 of 1985 whereby the High Court had set aside the judgment and decree dated 12th of November, 1984 passed by the Additional District and Sessions Judge dismissing the suit filed against the appellant who was a guarantor in respect of loans advanced by the Punjab National Bank [ in short 'the Bank'] - respondent no.1 to M/s Rangaa Trades and Exports Pvt. Ltd. - respondent no.2 in this appeal. By the impugned judgment, the High Court affirmed the decision of the Additional District and Sessions Judge and held that the suit filed by the Bank be decreed against the original defendant Nos.1 to 4 for a sum of Rs.42,874/- including interest at the rate of 19.5 per cent per annum with quarterly rests from the date of filing of the suit till realization. At this stage, we may note that the said decree against the defendant nos.1 to 4 has now become final as no appeal was preferred by the said defendant nos. 1 to 4 against the said decree. Feeling aggrieved by the aforesaid judgment of the High Court, this special leave petition has been filed by the guarantor appellant in respect of which leave has already been granted.

(3.) The only question that was raised on behalf of the appellant was that in view of the statutory provision under section 130 of the Indian Contract Act, 1872 (in short "the Act"), whether the High Court was justified in holding that the appellant who was a guarantor of the loan advanced to the defendant nos. 1 to 4 was liable to pay the decretal amount on the ground that the appellant had revoked the guarantee before such loan was actually paid to the defendant Nos. 1 to 4 and long before the suit was filed by the bank against the defendants for recovery of such loan.