The liability of the surety is coextensive with that of the principal debtor unless otherwise provided by the contract, and the plaintiff could file the suit against the guarantor alone as per the terms of the guarantee agreement.

ORDER

M. Karpagavinayagam, J.

Pradip D. Kothari, the applicant/defendant has filed this application in A.No. 1634 of 2000 seeking to raise the order of furnishing security dated 8-12-1999 passed ex-parte in the application filed by the respondent/plaintiff in A. No. 4236 of 1999 pending disposal of the suit in C.S. No. 594 of 1999.

2. The plaintiff/respondent filed the above suit for recovery of a sum of Rs. 5,45,08,179/together with interest and for consequential orders against the defendant/applicant herein. Pending disposal of the suit, the plaintiff filed A.No. 4236 of 1999 requesting for furnishing security to the suit claim and in default, to order attachment of the petition mentioned property before judgment.

3. On hearing the counsel, this Court passed an ex-parte order on the basis of the materials available on record directing the defendant to furnish security for suit claim within four weeks and ordered notice returnable by then. On service of the notice, the applicant/defendant has filed this application in A.No. 1634 of 2000 on 11-4-2000 requesting to raise the ex-parte order directing furnishing security in the above matter.

4. The case of the plaintiff is as follows :-

"Ceat Financial Services Limited, the plaintiff herein entered into a lease agreement on 4-1-1995 with D.C. Kothari Textiles Limited under which the plaintiff leased out plant and machinery valued at Rs. 3.96 crores. The above lease agreement was converted into a Hire Purchase Agreement on 4-7-1995. In consideration of the plaintiff entering into a lease agreement with D.C. Kothari Textiles Limited, Pradip D. Kothari, the defendant executed a Deed of Guarantee on 18-10-1994 in favour of the plaintiff. After the Hire Purchase Agreement, the defendant executed another Deed of Guarantee in favour of the plaintiff on 1-7-1997. Since D.C. Kothari Textiles Limited were irregular in the payment of the hire charges from November 1996 onwards, the plaintiff sent a notice dated 25-2-1998 calling upon D.C. Kothari Textiles Limited to pay the amounts due. Despite receipt of the notice, there was no payment. Therefore, the plaintiff by invoking the personal guarantee of the defendant sent a notice to the defendant calling upon him to pay the amounts due. In spite of receipt of the notice, there was no reply. The plaintiff sent a reminder.on 23-3-1999, but there was no response. The company was found to be in heavy debts and has not settled the dues of the bonded warehouse and even as per its own balance sheet, the outstanding of the Company is around Rs. 35 crores. The plaintiff instituted winding up proceedings against D.C. Kothari Textiles Limited before this Court and the same is pending. Since the defendant executed a guarantee in favour of the plaintiff in respect of the above Hire Purchase Agreement, the plaintiff has instituted this suit for recovery of the above said sum with interest."

5. The case of the defendant challenging the ex-parte order directing to furnish security for the suit claim, as projected in the counter-affidavit filed in A.No. 4236 of 1999 and the affidavit filed in A. No. 1634 of 2000 is as follows :

"The above suit filed against the defendant as surety is not maintainable due to the fact that the plaintiff/respondent has not instituted any action against the principal debtor within the limitation period of three years. As the plaintiff has allowed the claim against the principal debtor to get barred by limitation, no claim could lie against the defendant as surety, as the suretyship gets discharged on that account under S. 135 of the Contract Act. The guarantee agreement dated 18-10-1994 and 1-7-1997 executed by the defendant would state that the guarantor shall forthwith pay the plaintiff all the amounts payable by the company only in the event of default on the part of the company in making such payments. The plaintiff had neither substantiated its plea with tangible evidence that the principal debtor has defaulted in its payment n