S CHATTANATHA KARAYALAR Vs. CENTRAL BANK OF INDIA LIMITED

JUDGEMENT

(1.) This appeal by certificate is brought on behalf of the 3rd defendant against the judgment and decree of the High Court of Kerala dated July 18, 1962 in A. S. No. 561 of 1961 which affirmed the judgment and decree of the Court of the Subordinate Judge of Alleppey in O. S. No. 114 of 1957.

(2.) By a resolution Ex. BD dated November 25, 1946 the Board of Directors of the 1st defendant Company authorised the 2nd defendant to obtain financial accommodation from the plaintiff-bank to the extent of Rs. 15 lakhs under different kinds of loans. Pursuant to this resolution the Company by its letter Ex. DE dated November 26, 1946 asked for accommodation for Rs. 1 lakh under clean overdraft, for Rs. 4 lakhs under open loan and for S. 10 lakhs under out agency and key loans. On November 26, 1946 all the three defendants executed a promissory note Ex. B in favour of the plaintiff-bank for a sum of Rs. 4 lakhs. The promissory note was sent to the plaintiff-bank along with a letter Ex. A styled letter of continuity dated November 26, 1946. Ex. A reads as follows :

(3.) The first question presented for determination in this case is whether the status of the 3rd defendant in regard to the transaction of overdraft account is that of a surety or of a co-obligant. It was argued by Mr. Desai on behalf of the appellant that the High Court has misconstrued the contents of Exs. A and B in holding that the 3rd defendant has undertaken the liability as a co-obligant. It was submitted that there was an integrated transaction constituted by the various documents-Ext. A, B and G executed between the parties on the same day and the legal effect of the documents was to confer on the 3rd defendant the status of a surety and not of a co-obligant. In our opinion, the argument put forward on behalf of the appellant is well founded and must be accepted as correct. It is true that in the promissory note-Ex. B all the three defendants have "jointly and severally promised to pay the Central Bank of India Ltd. or order a sum of Rs. 4 lakhs only together with interest on such sum from this date", but the transaction between the parties is contained not merely in the promissory note-Ex. B. - but also in the the letter of continuity dated November 26, 1946-Ex. A which was sent by the defendants to the plaintiff-bank along with promissory note- Ex. B on the same date. There is another document executed by defendant No. 1 on November 26, 1946-Ex. G-Hypothecation agreement. The principle is well established that if the transaction is contained in more than one document between the same parties they must be read and interpreted together and they have the same legal effect for all purposes as if they are one document. In Manks v. Whiteley, 1912-1 Ch 735 at p. 754, Moulton, L. J. stated :