( 1 ) THE respondent herein stood as a guarantor for the loans which had been advanced by the appellant herein to M/s Mohanlal Proprietor, M/s mohanlal Ramdhandas and to Shri Pawan Kumar Kulwant Rai. The goods of these two firms were hypothecated. The respondent herein had accounts with the appellant Bank and it stood surety and guaranteed the repayment of the loans taken by the principal debtors.

( 2 ) IT appears that there was a default in the repayment of the loans. The appellant herein raised a demand and wrote a letter dated 7-10-1986 to the respondent informing him that his account with the appellant Bank had been debited with a sum of Rs 14,23,000 on account of appropriation towards the accounts of M/s Mohanlal Ramdhandas and to Pawan Kumar Kulwant Rai, for which the respondent stood as their guarantor.

( 3 ) ON 17-8-1987, the respondent filed a writ petition being miscellaneous Petition No. 2465 of 1987 before the Madhya Pradesh High court at Jabalpur. The challenge in this writ petition was to the said letter dated 7-10-1986. Before the petition came up for hearing for final disposal, the appellant Bank on 30-9-1987 filed a civil suit before the District Judge, bhopal for