IMPORTANT POINT
A suit against a guarantor can proceed independently of the principal debtor's suit dismissal if the liability remains intact, but the plaintiff must substantiate claims with adequate evidence.

JUDGMENT :

This appeal is at the instance of the 2^nd defendant in O.S.No.42/2009 on the files of the Sub Court, Muvattupuzha, challenging decree and judgment dated 11.01.2013 therein. The 1^st respondent herein is the plaintiff and the 2^nd respondent is the 1^st defendant before the trial court, whose suit was dismissed for default.

2. Heard the learned counsel for the appellant/ 2^nd defendant and the learned counsel appearing for the 1^st respondent/plaintiff in detail. Perused the verdict under challenge.

3. The parties in this regular first appeal will be referred hereinafter with their status before the trial court.

4. The suit has been instituted by the plaintiff, alleging that the 1^st defendant joined for three chitties with the plaintiff vide ticket Nos.J21/0134/JMM/12, J2J/0134/JMM/13 and JSJ/0134/JMM/14, having sala of Rs.10,00,000/- each, commenced on 10.09.2005 and terminated on 10.04.2007 and the chitties were auctioned on 26.11.2005 for Rs.7,50,000/- each and the 1^st defendant received the amount on 26.11.2005. The further case of the plaintiff is that the 2^nd defendant stood as a guarantor for the above said transaction and executed necessary documents in favour of the plaintiff company, agreeing to repay the same. But the 1^st defendant repaid only Rs.11,70,750/- and he kept Rs.24,05,464/- as arrears. Thus the said amount sought to be realised.

5. Before the trial court, the plaintiff failed to take steps against the 1^st defendant and the suit against him was dismissed for default on 16.12.2009.

6. The 2^nd defendant filed written statement denying the allegations and raising specific contention in paragraph Nos.17 and 18 of the written statement as under:

“17. The document produced by the plaintiff as per the list shown in the plaint are forged and falsely created by the defendant and the same are not admissible in evidence. The document shown in the list is alleged agreement produced by the plaintiff dated 31/05/06 is false and fabricated and forged one. It does not bear the signature of this defendant. The defendant denies the signature alleged to be put by the defendant in the alleged pro note alleged to be executed on 31/5/06.

18. It is submitted that this defendant joined a chit with the plaintiff in 2002. Though this defendant defaulted payment the chit was closed and there arose a dispute with regard to the interest payable by this defendant towards the chit amount. Though the chit was closed, the plaintiff failed to return the documents obtained from this defendant which includes blank signed papers and blank cheque leaves. The plaintiff has already filed a complaint before the JFCM, Thodupuzha against the defendant as ST No.23/08 for an alleged offence u/s 138 of NI Act. The evidence has been over in the case and the case is posted for hearing. The present suit is an after thought and is filed experimentally towards this defendant to extract money from this defendant illegally by hook or crook.”

7. The trial court on the basis of pleadings, raised necessary issues and tried the case. PW1 was examined and Exts.A1 to A5 were marked on the side of the plaintiff. DW1 was examined and Exts.B1 to B5 were marked on the side of the 2^nd defendant. Finally, the trial court decreed the suit, holding that the evidence of PW1, supported by Exts.A1 and A2, are convincing to prove the case of the plaintiff.

8. The learned counsel for the 2^nd defendant initially argued that the suit against the 2^nd defendant/guarantor alone would not lie after dismissal of the suit against the 1^st defendant/principal debtor. That apart, it is argued that in the instant case, the specific case against the 2^nd defendant is that the 2^nd defendant joined for a chitty with the plaintiff during the year 2002 and thereafter, the chitty transaction was closed. But there arose a dispute with regard to the interest payable by the 2^nd defendant and in consequence thereof, the plaintiff did not return the documents obtained from the 2^nd defendant in connection