A contract of guarantee can be entered into between the plaintiff and defendant No. 1 and the Bank, defendant No. 5, even if the Bank was not an express party to the contract.

1. In the suit which is the subject-matter of this appeal the plaintiff claimed that he was induced by defendants 1 to 3 jointly to open accounts in the Jehanabad branch of the Modern Bank of India, Ltd., having its registered Head Office at Dacca. The plaintiff also alleged that defendants 1 to 3 gave personal undertaking that they would be personally liable for any loss that the plaintiff might sustain. On the 9th of September, 1946, the plaintiff made a fixed deposit with the Bank of a sum of Rs. 1,000/-for a term of three months.

The due date of withdrawal was the 9th of December, 1946, but the Bank did not make Payment, though the plaintiff made demand on several occasions. On the 20th of May, 1947, the Bank ultimately refused to make any payment. Defendant No. 1 was the manager of the Gaya branch, defendant No. 2 was the Organizer and Inspector and defendant No. 3 was the local Director of the Jehanabad Branch. The plaintiff hence brought the suit for recovering a sum of Rs. 1,000.00 which was placed in fixed deposit, together with Rs. 38/- claimed as interest. The plaintiff also claimed a sum of Rs. 23/- which amount was deposited in the Savings Bank, and a sum of Re. 1/- as interest for the amount. The total claim of the plaintiff was, therefore, for the grant of a money decree for a sum of Rs. 1,062/-. The Plaintiff also alleged that there was fraud and conspiracy between defendants 1 to 3 as a result of which the plaintiff sustained loss. Defendant No. 1 alone contested the suit. The other defendants did not appear or contest the suit though notices were served on them. Defendant No. 1 denied that there was any contract of guarantee between him and the plaintiff and there was no undertaking on his behalf to reimburse the plaintiff in case he suffered loss.

It was alleged that the plaintiff opened the accounts of his own free will and there was no fraud practised by any of the defendants. The learned Munsif held that the branch of the Modern Bank of India Ltd. at Jehanabad was a bogus branch and the defendants 1 fro 3 had given a personal undertaking to the plaintiff for reimbursing him in case he suffered loss. The Munsif also found that the plaintiff had suffered loss of the amount claimed, and, therefore granted a decree in favour of the plaintiff for the recovery of the money from all defendants.

Defendant No. 1 preferred an appeal to the learned Subordinate Judge of Gaya, but his appeal was dismissed and the learned Subordinate Judge affirmed the findings of the Munsif.

2. On behalf of the appellant Mr. Tarkeshwar Nath argued. In the first Place, that there was no privity of contract between the Bank, defendant No. 5 and the plaintiff and hence there could be no contract of guarantee within the meaning of Sec.126 of the Indian Contract Act. In the present case there is no allegation in the plaint that the Bank was expressly a party to the contract of guarantee. But it was stated on behalf of the respondents that defendant No. 1 had the power of attorney from defendant No. 5. It is not necessary, in our opinion, that the principal debtor should as a matter of law be an express party to the contract of guarantee; it is sufficient that the principal debtor is a party by implication to the contract.

It has been held by the Madras High Court in Muthu Raman Chetty V/s. Chinna Vellayan Chetty, ILR 1939 Mad 965 : (AIR 1917 Mad 83) (A), that a, person may become a surety without the knowledge and consent of the principal debtor, but the only rights which he acquires in that case are those given by Sections 140 and 141 of the Indian Contract Act and those given by Sec.145. There is also a decision in Jagannath Baksh Singh V/s. Chandra Bhukhan Singh, ILR 12 Luck 484 : (AIR 1937 Oudh 19) (B), in which it was held that for a contract of suretyship there should be concurrence of the principal debtor, the creditor and the surety but that does not mean that there must be evidence showing that the surety undertook his obl