Judgement

SHAH, Actg. C. J.: The High Land Bank Kottayam of which the appellant M. C. Chacko was the Manager, had an overdraft account with the Kottayam Bank. K. C. Chacko, father of the appellant, had executed from time to time letters of guarantee in favour of the Kottayam Bank agreeing to pay the amounts due by the High Land Bank under the overdraft arrangement. By the last letter of guarantee dated 22nd January, 1953 K. C. Chacko agreed to hold himself liable for the amounts due by the High Land Bank to the Kottayam Bank on the overdraft arrangement subject to a limit of Rupees 20,000.

2. the Kottayam Bank Ltd. filed a suit in the court of the Subordinate Judge of Kottayam against the High Land Bank for a decree for the amount due in the account. To this suit were also impleaded K. C. Chacko, the guarantor, M. C. Chacko Manager of the High Land Bank, and M. C. Joseph, Kuriakose Annamma and Chinnamma, the last three being the son, daughter and wife respectively of K. C. Chacko. Again the High Land Bank the claim was made on the footing of the overdraft account; against K. C. Chacko on the letter of guarantee and against M. C. Chacko, his brother, his sister and his mother as universal donees of the property of K. C. Chacko under a deed dated June 21, 1961 under which, it was claimed a charge was created on the properties to which the deed related and against M. C. Chacko, also on the claim that he had personally agreed to pay the amount due by the High Land Bank. During the pendency of the suit, K. C. Chacko died and the suit was prosecuted against his widow, daughter and sons who were described also as his legal representatives.

3. The trial court decreed the suit against the High Land Bank and also against M. C. Chacko limited to the property received by him from his father under the deed dated June 21, 1951. The claim of the Kottayam Bank to enforce the liability under the letter of guarantee personally against K. C. Chacko was held barred by the law of limitation and on that account not enforceable against his heirs and legal representatives. The Court also rejected the claim that M. C. Chacko had personally agreed to pay the amount due under the overdraft arrangement.

4. In appeal to the High Court by M. C. Chacko the decree passed by the trial court was confirmed and the cross objections filed by the State Bank of Travancore with which the Kottayam Bank was merged claiming that M. C. Chacko was personally liable were dismissed. This appeal with special leave is preferred by M. C. Chacko against the decree of the High Court.

5. Two questions arise in this appeal:

(1) whether under Ex. D-1 a charge is created in favour of the Kottayam Bank to satisfy the debt arising under the letter of guarantee and (2) whether the charge assuming that a charge arises is enforceable by the Bank when it was not a party to the deed Ex. D-1.

6. Ex. D-1 is called a deed of partition; in truth it is deed whereby K. C. Chacko gave the properties described in the Schedule A to M. C. Chacko and other properties described in Schs. B to F to M. C. Chacko; M. C. Joseph, Annamma and Chinnamma. In paragraph 17 it is recited:

"I have no debts whatsoever. If in pursuance of the letter given by me to the Kottayam Bank at the request of my eldest son, Chacko, for the purpose of the High Land Bank Ltd., Kottayam, of which he is the Managing Director, any amount is due and payable to the Kottayam Bank, that amount is to be paid from the High Land Bank by my son, Chacko. If the same is not so done and any amount becomes payable (by me) as per my letter, for that my eldest son, Chacko and the properties in Schedule A alone will be answerable for that amount".

The other paragraphs which deal with the properties in Schedule A may also be referred to. Paragraph 10 of the deed recited:

"The donees of the properties included in A, B and C schedules are, as from this date, to be in possession of their respective properties and to get mutation of registry, in their names,