Viscount Haldane:-

The Luxmi Company, Limited, which was defendant in the suit of which this appeal arises, but which is no party to the appeal, was a company trading at Ambala and elsewhere as bankers, cotton merchants and general commission agents. It obtained certain advances from the respondents, the Marwar Bank. These advances were made under various circumstances, but at the material date with which their Lordships are concerned it was necessary to obtain some security for the assurance of the bank, and accordingly on the 28th December, 1908, the appellants, Lala Panna Lal and Lala Basheshar Nath, and one Lala Ganga Ram executed a security bond, dated the 28th December 1908, in favour of the manager of the Marwar Bank. Lala Ganga Ram and the appellant Lala Panna Lal were directors of the Luxmi Company; other appellant, Lala Basheshar Nath, was manager of one of the branches of the Luxmi Company, and was an alternative director, that is to say, on certain occasions he acted as a director.

The surety bond which the two appellants executed was in these terms It was addressed to the manager of the Marwar Bank, Limited, of Ambala City :

"Dear Sir, - In consideration of your allowing