1986 Supreme(AP) 308
Andhra Pradesh High Court
Judges : K.RAMASWAMY
P.ANJAIAH - Appellant
Versus
State Bank of India, NEW BOIGUDA, SECNNDERABAD - Respondent
C.R.P.Nos.644/84 etc.
Decided On : 08-06-86
Advocates Appeared :
Mr. P.V. Sastry,Mr. K. Santharam
Headnote:CONTRACT ACT, Secs129 and 140 - Failure of creditor to sue principal debtor in time does not discharge liability of surety
EVIDENCE ACT, Sec 34 and Bankers Books Evidence Act, 1891, Sec 4 - Running account and debt entries entered in regular course of business by Bank - Entries are prima facie proof of transaction
Held : By mere failure or for bearance to sue the principal debtor, the surety is not discharged from the liability unless there is an express covenant in that regard or a relea5e by the principal debtor by novation or otherwise The bar of limitation against the principal debtor does not extinguish the debt except extinction of title to immoveable property by prescription under Sec27 of the Limitation Act 1963 The omission to sue the principal debtor by the creditor within the period of limitation does not discharge the surety, for the surety can himself set the law in motion against the debtor
In a transaction maintaining books of account in the regular course by a Bank the entries therein are prima facie proof of the transaction entered into and when the necessary certified copy thereof is produced, it is prima facie evidence of the transaction, under Sec34 of the Evidence Act and Sec4 of the Bankers, Books Evidence Act
CRPs Dismissed
( 1 ) THE question of law for consideration is common in all the revisions and they are disposed of by a common judgment.
( 2 ) THE petitioner in all the above 21 civil revision petitions is the second defendant. The respondent-Bank lent money to the first defendant in the suit on a guarantee given by the petitioner. The respondent pleaded that under 20-Point Programme to ameliorate the economic conditions of the weaker sections, the respondent granted loans under clear cash credit facility subject to a maximum of Rs. 500/- on the guarantee furnished by the petitioner and a current account was opened by the respondent in the name of the principal debtor. The principal debtor and the petitioner jointly and severally made liable to pay the amount to the respondent under the clean cash credit facility. Demand was made when the principal debtor committed default in payment of the amount due under the account and suit was laid for recovery of the suit amount. The petitioner in his written statement admitted that he was a surety to the principal debtor for the amount advanced by the respondent. He claimed that the amount has to be recovered within a period of 100 days from the date of grant of the loan made in the months of October, November and December, 1976. Since the respondent failed to collect the same within that period, he cannot be made liable for the default. It is also farther pleaded that the suit be filed within three years from the date of ths loan or three years from the date on which the amounts were due as per para 6 of the plaint and the suits were not filed within the same period. Therefore, the suits are barred by limitation. In para 6 in cause of action portion, it is stated that the cause of action arose on Decembsr 6, 1976 when the loan was granted on clean cash credit facility and on March 16, 1979 when the defenddants were called upon to repay the amounts. Thj trial Court negatived the defence and held that the suits are filed within the time and decreed them. Hence these revisions.
( 3 ) SRI P. Venkatadri Sastry, learned counsel for the petitioner contends that Ex. A-3 account has not been properly proved. The account is not mutual and current account and the account has not been proved as required under Section 34 of the Indian Evidence Act. Therefore, the suit claim has not been properly established. It is next contended that the suit is barred by limitation From ths date of transaction entered into viz. , the date of promissory note Ex. A-1 there is no acknowledgment made by the petitioner. Therefore, the suit is filed beyond three years against the principal debtor. The petitioner being the surety the suit is barred as against him. The contentions have been resisted by Mr. Santhanam, learned counsel for the respondent stating that the liability of the petitioner is co-extensive with that of the principal debtor. The debt is based on mutual and current running account and the suit was filed within the limitation The Officer connected with the maintenance of the account has been examined though not the officer who initially written the account and under the Bankers evidence ACT, 1872 the accounts are prima facie proved when P. W. 1 was examined. There is no dispute with regard to authenticity of the entries made in the account. Therefore, the amount and the liability thereunder have been properly proved.
( 4 ) THE question at issue is whether the suit claim has been properly proved. It is an admitted case that under the 20-point Programme, to ameliorate the economic conditions of the weaker sections of the society clean cash credit account was opened with the respondent by the principal debtor the first defendant in the suit. The petitioner admitted that he stood as surety for the amounts due thereunder to a maximum of Rs 500/ -. In the plaint it is expressly pleaded that the loan is granted upto a maximum of Rs. 500/-, on clean cash credit account. P. W. I has been examined in this case.