Judgment

SHAH, J. - Ranjit Singh was a director of Ranjit Singh and Sons Ltd. - which acted as a Managing Agent of Shri Vikram Cotton Mills Ltd. - Shri Vikram Cotton Mills Ltd. - hereinafter called the Company, - opened a cash-credit account with the Punjab National Bank, and to secure repayment of the balance due at the foot of the account on June 27, 1953 four documents were executed - three by the Managing Agents on behalf of the Company and one by Ranjit Singh. The three documents executed by the Managing Agents were (i) promissory not for Rupees 13,00,000 payable with interest at the rate of 2 1/2 per cent over the Reserve Bank of India rate with a minimum rate of 6 per cent per annum until payment; (ii) a deed of hypothecation of goods described in the Schedule annexed to the document; (iii) a letter to the Bank agreeing that during the continuance of the agreement evidenced by the letter of hypothecation, the Company will remain solely responsible for all loss, damage or deterioration of the securities delivered to the Bank caused by theft, fire, rain, robbery, dacoity or by any other cause whatsoever. Ranjit Singh executed a deed called an "agreement of guarantee" agreeing t