guarantor agreeing to give up his rights us 133.

M. KARPAGAVINAYAGAM, J.

The appellant, the State Bank of India, Ambattur Industrial Estate, Madras, being the plaintiff, on being aggrieved over the judgment and decree passed by the lower appellate court setting aside the judgment and decree of the trial court in its favour, has presented this second appeal.

The plaintiff filed a suit for recovery of a sum of Rs. 15, 981.82 with interest at the rate of 12 per cent. per annum against the defendants.

The case of the plaintiff is as follows :

The plaintiff in the course of its business under the scheme of financial assistance to small business units, granted a loan of Rs. 8, 000 to the first defendant on his request for carrying on business in rewinding of motors. As security for repayment of the loan, the first defendant executed a general agreement and an ancillary agreement dated August 17, 1978, hypothecating all the movable assets and agreeing for the prompt payment of the loan. The second defendant executed an agreement of guarantee dated August 17, 1978, for the due repayment of the loan granted to the first defendant. Since both the defendants failed to repay the loan in time in spite of the repeated demands and receipt of legal notice, the plaintiff-bank, the appellant herein filed the above suit.

The second defendant, the guarantor of the first respondent herein, filed a written statement, in which the averments are as follows : On August 17, 1978, when he was in his office, the first defendant came and brought certain printed forms and a typed agreement and N. J. stamp and requested him to sign as a guarantor, since he applied for a loan from the bank up to a limit of Rs. 8, 000. Believing the words of the first defendant, the second defendant signed the blank forms to stand as a guarantor to the limit of Rs. 8, 000. Since as per the suit, the suit sum exceeded the limit of Rs. 8, 000, it is not binding on him and as such, there is a violation of the agreement. The confirmation of the balance was not intimated to him. Hence, the suit shall be dismissed with costs.On framing necessary issues, the trial court examined PWs. 1 and 2 on behalf of the plaintiff and marked exhibits A-1 to A-11 and on the side of the defendants, the second defendant examined himself as DW-1.

On an elaborate consideration of the materials placed before it, the trial court decreed the suit as prayed for with costs.

Challenging the said decree, the second defendant alone filed an appeal before the learned District judge, Chengalpattu. On hearing both the parties in the said appeal, the lower appellate court would hold that the second defendant is not liable to pay any amount except Rs. 8, 000, since there is a variation between exhibit A-4 agreement and exhibit A-7 statement of account and thus, the second defendant is not liable to pay any amount exceeding the limit of Rs. 8, 000 as mentioned in exhibit A-4 agreement. With this observation, the appeal was allowed modifying the decree and judgment of the trial court, to the effect that the liability of the second defendant is restricted to the extent of Rs. 8, 000 only with pro-costs thereon. Hence, the present second appeal by the plaintiff, the appellant herein.

While this second appeal was admitted, the substantial question of law was formulated by this court in the following words :

Whether, in view of clause 6 of the agreement of guarantee permitting the bank to enlarge or vary the credit to the borrower without the consent of the guarantor, section 133 of the Contract Act will be a bar to the plaintiff-bank to claim any amount with interest over and above the amount mentioned in the agreement of guarantee and is not the guarantor estopped from contending that section 133 is a bar in view of clause 6 of the agreement entered into by him ?

While elaborating the above substantial question of law, Mr. Sukumar, counsel for the appellant, would vigorously contend that section 133 of the Contract Act is not a bar in view of the agreement betwee