( 1 ) BEING aggrieved by the judgment and decree passed by the Civil Judge (S. D.), Gandhidham, in Special Civil Suit No. 341 of 1995 dated 29-10-1996, this first appeal has been filed by original defendant no. 2.

( 2 ) THE facts giving rise to the present appeal, in a nutshell, are as under :

( 3 ) RESPONDENT No. 1 is Central Bank of India. It had lent a sum of Rs. 1,52,000. 00 to respondent No. 2 for the purpose of purchase of a truck. The present appellant was a surety and had executed a deed of guarantee. As respondent no. 2 did not make payment of the amount due and payable by him to respondent no. 1 Bank, respondent No. 1 Bank filed Special Civil Suit No. 341 of 1995 decree passed by the Civil Judge (S. D.), Gandhidham in Special Civil Suit No. 341 of 1995 dated 29-10-1996. for the purpose of recovery of the amount, which was due and payable by the principal debtor, namely, Babulal M. Mehta, who is respondent No. 2 herein. The present appellant was a surety, and therefore, he was joined in the said suit as defendant No. 2. The said suit was decreed and being aggrieved by the judgment and decree, the surety, that is, original defendant No. 2, has approached this Court by way of this Civil Appeal.

( 4 ) LEARNED Advocate Shri Brahmbhatt appearing for the appellant-surety has submitted that the judgment delivered by the trial Court is improper for the reason that though the appellant-surety was discharged from his liability, the surety was also saddled with the liability, which the principal debtor, namely, defendant No. 2, had to discharge. It has been submitted by the learned Advocate that the creditor Bank had lent money for the purpose of purchase of the truck. The truck had been hypothecated in favour of the creditor Bank. The creditor bank, namely, respondent No. 1, had permitted the principal debtor to dispose of the truck, but before disposal of the said truck, the surety had not been informed by the creditor Bank, and therefore, the surety had been discharged from his liability. He has relied upon judgments delivered in the case of Gopal chandra Bagaria v. State Bank of India and Anr. , AIR 1994 Ori. 329, P. Janakiram Chetty v. Punjab National Bank Ltd. and Anr, AIR 1968 Mys 56 and S. Perumal Reddiar v. Bank of Baroda and Ors. , AIR 1981 Mad 180, to substantiate his submission that as the surety had not been informed before disposal of the truck, the surety had been absolved from his liability.

( 5 ) ON the other hand, learned Advocate Shri G. K. Patel appearing for respondent No. 1 Bank has submitted that it was not necessary for the creditor bank to inform the surety before disposal of the truck for the reason that the sale proceeds of the truck were credited in the account of the principal debtor. No prejudice had been caused to the debtor or the surety when the truck which had been hypothecated was permitted to be sold by the creditor Bank. It has been submitted by him that had the truck been not permitted to be sold, the value of the truck would have diminished by efflux of time and the amount of interest payable by the debtor would have gone up. So as to see that the liability of the debtor is substantially reduced, at the request of the principal debtor, the truck had been permitted to be sold and the entire sale proceeds had been credited in the account of the principal debtor. He has therefore, submitted that no prejudice had been caused to the surety by virtue of the sale of the truck, which had been hypothecated in favour of the Bank.

( 6 ) WE have heard the learned Advocates and have also perused the record and proceedings pertaining to the case. We have gone through the Deed of guarantee, the statement of accounts and depositions of the witnesses. We have gone through the depositions of Rajendra S. Pandya (Ex. 55), an employee of the creditor Bank, Shri Babulal M. Mehta (Ex. 56), respondent No. 2, who was the principal debtor and Shri Bimalsingh Duggal (Ex. 57) the surety, who is the presen