ROYAL FINANCE CORPORATION GUNTUR Vs. VENKATA SESHAYYA

JUDGEMENT

(1.) The unsuccessful plaintiff/petitioner, in his relentless pursuit is assailing the concurrent decrees on the anvil of error of jurisdiction. The facts leading thereto are : On March 31, 1975. the Finance Corporation lent a sum of Rs. 800/ to one Somisetty Venkateswarulu on his executing a promissory note, Ex. A-1. Contemporaneously it had also taken a bond Ex. A-2 from the respondent, styling it to be a letter of guarantee. The said Venkateswarlu made part-payment. For the unpaid balance amount, the the petitioner laid the suit. In defence, the plea of the principal promisor is that he is a small farmer; under Section 4 of the Andhra Fradesh Agricultural Indebtedness (Relief) Act (7 of 1977), hereinafter referred to as "the Act", the debt stands extinguished and as a consequence he is discharged of the liability and the same prevailed with the trial court. Therefore, it held that the debt stands discharged and the suit entitled with dismissal. On appeal against the respondant/surety alone, in A.S.No. 19 of 1979, the Appellate Court confirmed the same. Thus the present revision came to be filed.

(2.) Sri Challa Sitaramaiah, representing Sri A. Gopal Rao, learned counsel for the petitioner contended that the Lower Appellate Court did not consider the real point in issue viz., thougt the original promisor is a small farmer and the debt as against him stands discharged, since the respondant being an indemnifier non-agriculturist and non-small farmer, in view of the priviso to sub-section (2) (a) of Section 4 of the Act, the Appellate Court ought to have held that the suit is maintainable as against the respondent and should have ordered to proceed as against him. Though this point was raised and argued it was not considered by the lower Appellate Court and thereby it committed material irregularity or error of jurisdiction warranting interference in this revision. He futher contended that the bond Ex. A-2 executed by the respondent is only an indemnity but not a surety bond. Though the original promisor is absolved of the liability by statutory operation of Section 4 of the Act, still the respondent is liable under Ex.A-2 as he has undertaken joint ana several liability both personally as Well as against his property. Therefore, the suit is to be decreed as against the respondent. In support of his contention he relied upon Gajanan Moreshwar vs. Moreshwar Madan Guild & Co. vs. Conrad and E.K.K. Nambiar Vs.M.K. Raman.

(3.) Though the respondent has betn served with the notice, be is not appearing either in person or through any counsel. Since the point involved is of considerable importance, I requested Sri M.S.R. Subrahmanyam, learned counsel of this Bar to assist the Court as amicus curiae to which he graviously agreed.