JUDGMENT
Prabir Kumar Majumdar, J.
1. These two appeals are against the judgment and order dated 11th Sept. 1975 passed by a learned single Judge of this court. The plaintiff is the appellant before us. The plaintiff has taken out a Master’s Summons claiming, inter alia, that the death of respondent Nos. 2, 4, 6 and 9 and the dissolution of the defendant No. 1 be recorded, and the heir and/or legal representative of the defendant No. 6 be substituted and made a party to the suit and setting aside of the abatement of the suit, if any. The learned Judge rejected the said application for substitution and also dismissed the suit on a preliminary point taken by the defendants that as the suit could not be proceeded against the defendants Nos. 1, 2, 4, 6 and 9 the plaintiff cannot proceed against the remaining guarantors.
2. The plaintiff United Bank of India Ltd. as the successor of Comilla Banking Corporation instituted a suit against the company Modern Stores (India) Ltd., a company incorporated under the Companies Act, 1913, the defendant No. 1 in the suit and the other defendants. The defendant company had a current account with one Comilla Banking Corporation. At the request of the defendant No. 1 the said Comilla Banking Corporation agreed to allow the overdraft on the terms and conditions contained in an agreement entered into by and between the company the defendant No. 1 in the suit and the predecessor-in-interest of the plaintiff, the Comilla Banking Corporation Ltd. The other defendants, namely, defendants Nos. 2 to 9 in consideration of the Comilla Banking Corporation agreeing to lend and advance to the defendant company’s moneys on the overdraft account guaranteed the repayment by the defendant No. 1 of the amounts of the overdraft up to limit allowed by the Bank.
3. The plaintiff appellant came to know that sometime after the institution of the above suit the defendant company went into voluntary liquidation and one Mr. N. Sanyal, a Chartered Accountant was appointed liquidator. The plaintiff appellant further ascertained by an enquiry that the defendant company was dissolved on 1st March, 1961.
4. It was also ascertained by the plaintiff that the defendants Nos. 2, 4, 6 and 9 died during the pendency of the above suit. The plaintiff appellant, however could not discover the dates of death of the defendants Nos. 2, 4 and 9 and the names and identity of their I respective heirs. About the defendant No. 6, Pritinath Chatterjee the appellant had come to know that the said defendant died on 30th Oct., 1968. After ascertaining that one Prabuddha Chatterjee was the only heir and legal representative of the defendant No. 6 Pritinath Chatterjee, the appellant took out the Masters Summons for recording the dates of defendants Nos. 2, 4 and 9 and also dissolution of the defendant company and substitution of the said Prabuddha Chatterjee in place and stead of the defendant No. 6.
5. The appellant affirmed the affidavit in support of the Master Summons on 30th Jan., 1969. The time for making application for substitution of the defendant No. 6 was due to expire on Jan. 30, 1969. The appellant affirmed the petition being the grounds in support of the Master’s Summons dated 30th Jan, 1969. The appellant Bank’s Advocate on record, however, took out the Master’s Summons on 4th Feb, 1969. According to the appellant, there has been a delay of 3/4 days in taking out the Master’s Summons as the Master’s Summons due to inadvertence could not be taken out before the expiry of the prescribed period and the abatement of the suit took place at a slender margin of 4/5 days. The appellant in the said Master’s Summons made prayer for setting aside the abatement
6. As indicated above the learned judge rejected the said application for substitution and by the same judgment and order also dismissed the suit on the ground that after leaving out the principal debtor and also some of the guarantors the plaintiff appellant could not proceed with the suit against the remaining guarantors.
7. Regarding rejection of the application for substitution the learned Judge held that there was no explanation for 4 days delay and considering the said delay the learned Judge refused to allow the application for substitution. Regarding the suit the learned judge rejected the submission for the appellant plaintiff that even if the application for substitution of the heir of the defendant No. 6 failed, the appellant plaintiff could proceed against the surviving guarantors who were the defendants in the suit The learned Judge as indicated above rejected such submission of the plaintiff appellant by holding, inter alia, that if the suit against the one of the co-guarantors is allowed to be dismissed then the suit against other co-guarantors should also be dismissed. The learned Judge also held that if the plaintiff had allowed the principal debtor the defendant No. 1 to escape from this case and by doing this the plaintiff has released the co-guarantors from their liability and as such the suit could not proceed against the other defendants being the guarantors.
8. Two contentions were raised by the defendants before the trial court, namely, (i) that once a suit against the principal debtor was allowed to be dismissed then Section 134 of the Contract Act came into play because the plaintiff had discharged the principal debtor and the guarantors were, therefore, completely released and (2) that the suit against some of the co-guarantors being dismissed then the right of contribution under the Contract Act against some of the sureties was lost and the other sureties, therefore, could not have any liability. The learned trial Judge accepted both the contentions raised by and on behalf of the defendants in the suit. The learned trial Judge found that the plaintiff had allowed the principal debtor, defendant No. 1 to escape from this case and by doing this the plaintiff had released the co-guarantors from their liabilities. With regard to the second contention of the defendants before the trial Court, the learned trial Judge held that the plaintiff had destroyed the right of co-guarantors or co-sureties from their right of contributions against those discharged sureties.
9. Dr. Tapas Banerjee appearing with Mr. Karuna Sankar Roy has attacked both the conclusions arrived at by the learned trial Judge. With regard to the maintainability of the suit, Dr. Banerjee has submitted that Section 154 of the Contract Act has no application at all to the facts of the present case. Dr. Banerjee contends that Section 134 of the Contract Act consists of two parts (1) that if by any contract between the creditor and the principal debtor by which the principal debtor is released then the surety is also discharged and (2) that the surety is also discharged by any act or omission of the creditor the legal consequences of which is the discharge of principal debtor. Dr. Banerjee submits that there is no contract entered into between the plaintiff being the creditor and the defendant No. 1 being the principal debtor whereby the principal debtor was released. Therefore, there was no question of surety being discharged by any contract entered into by the plaintiff and the defendant No. 1 releasing the principal debtor. It is also submitted by Dr. Banerjee that there has been no act or any omission on the part of the plaintiff the legal consequence of which is the discharge of principal debtor. In the instant case the principal debtor stood dissolved by operation of law and it is well settled that the discharge of a principal debtor by operation of law does not operate as a discharge of the sureties. In the instant case, according to Dr. Banerjee, it is also not the case that the plaintiff had allowed the suit to be dismissed against the defendant No. 1. Dr. Banerjee contends that as the defendant company stood dissolved the principal debtor got released by operation of law, and such release was not due to any act or omission on the part of the appellant. Dr. Banerjee further contends that even if it is assumed that the plaintiff had allowed the suit to be dismissed against the defendant company, the principal debtor, even then the plaintiff would be at liberty to proceed against the guarantors or the sureties. It is his contention that mere omission even if it is so in a suit by the creditor against the principal debtor, a surety is not discharged as the debt is not released, only the remedy against the principal debtor is barred. Dr. Banerjee contends that under Section 128 of the Contract Act the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. Dr. Banerjee in this connection has also referred to Clause 11 of the agreement entered into by and between the plaintiff and each of the guarantors which provides that nothing done or omitted by the plaintiff in pursuance of any of the powers, provisions, authorities or permissions contained in this guarantee shall in any way affect or discharge surety’s liability under the agreement. Therefore, it is the submission by Dr. Banerjee that Section 134 has no application at all to the facts of the present case, as there was neither a contract releasing the principal debtor, nor was there any act or omission by the plaintiff, legal consequence of which was the discharge of the principal debtor. Me submits that the principal debtor i. e., the defendant company was discharged by operation of law, and not by any act or omission by the plaintiff, the creditor.
10. Dr. Banerjee the learned Counsel appearing for the appellant next refers to Section 137 of the Contract Act. It says that mere forbearance on the part of creditors to sue the principal debtor or to enforce any other remedy against the principal debtor does not, in the absence of any provision in the guarantee to the contrary, discharge the surety. According to Dr. Banerjee even if there is any forbearance to sue the principal debtor, assuming it is so, then by such forbearance the surety is not discharged and the plaintiff can very well proceed against the surety.
11. Dr. Banerjee next refers to Section 138 of the Contract Act whereby it is provided that where there are co-sureties, a release by the creditor any one of them does not discharge the others neither does it free the surety so released from his responsibility to the other sureties. Dr. Banerjee referring to Section 138 of the Contract Act has submitted that if the plaintiff releases one of the co-sureties that itself would not discharge the other sureties. It is the submission of Dr. Banerjee that option is with the plaintiff and if the plaintiff does not choose to proceed against all the sureties but only against one or a few of them then the surety or sureties so proceeded against cannot contend that by the plaintiffs releasing one co-surety or some of the sureties, the other sureties are also discharged. The learned Counsel appearing for the appellant further submits that it is also provided by Section 138 that release of one of the co-sureties does not release the surety so released from his responsibility to the other sureties nor does it affect the right of one surety against the others. Therefore, according to Dr. Banerjee, the learned Judge was entirely wrong in observing that having allowed the suit against some of the guarantors to be dismissed the plaintiff has destroyed the right of co-guarantors or co-sureties from their rights of contributions against those discharged. According to Dr. Banerjee the right of contribution as contemplated under Section 146 of the Contract Act is an independent right and it is not affected in any way by the creditors releasing the principal debtor or some of the sureties or guarantors.
12. Referring to Section 145 of the Contract Act Dr. Banerjee submits that the implied promise by the principal debtor to indemnify the surety being an independent right cannot by any event affect the right of surety not proceeded against.
13. Finally, it is the submission of the learned counsel appearing for the appellant that the conclusion arrived at by the learned trial Judge that the plaintiff having allowed the principal debtor, the defendant No. 1 to escape from this case released the co-guarantors from their liabilities is directly contrary to the provisions contained in Sections 137 and 138 of the Contract Act, Similarly, the learned Judge’s conclusion that if the suit against one of the co-guarantors is allowed to be dismissed then the suit against the other co-guarantors should also be dismissed is again contrary to this specific provision contained in Section 138 of the Contract Act that the release of one co-surety does not discharge others.
14. Dr. Banerjee, learned counsel appearing for the appellant has submitted that the learned Judge has wrongly applied the ratio of the decision of the Supreme Court in the case of Sri Chand v. Jagdish Prasad, reported in AIR 1966 SC 1427 ignoring the context in which such decision was rendered. Dr. Banerjee submits that Supreme Court in the said decision has recognised the law that liability of the sureties is under the law joint and several and if a creditor seeks to enforce the surety bond against some only of the joint sureties the other sureties will not on that account be discharged nor will release by the creditor of one of them discharge the other. According to Dr. Banerjee the Supreme Court in this case held that it may be open to the creditor to release one or more of the joint sureties but that will not alter the true character of an adjudication before the court when the proceedings are commenced to enforce the covenants of the bond against all the sureties. The Supreme Court specifically observed that it was concerned in that appeal not with the privilege that the creditor may exercise but with the effect of an adjudication which the court has made in a proceeding to enforce the covenant of the bond. Dr. Banerjee submits that in that case a decree was sought to be executed against the sureties and the sureties objected to the execution of the decree on the ground, inter alia, that the remedies of the sureties against the principal debtor had been impaired, and thereby the sureties stood discharged. That contention was rejected both by the trial court as well as the lower Appellate Court. Three of the sureties appealed from the order of the lower Appellate Court and in that appeal one of the appellants died and the Supreme Court held that the appeal had abated because the representation of the second appellant has not been brought on record. It is the contention of Dr. Banerjee, learned counsel appearing for the appellant that the appeal had abated not because that release of sureties could be taken as discharge of the others but that the appeal would have affected jointly the rights of the appellants who were three of the sureties.
15. The learned trial Judge has dismissed the suit on the ground that once the suit against the principal debtor was allowed to be dismissed then Section 134 comes into play because thereby the plaintiff had discharged the principal debtor and therefore, the guarantors were completely released. Therefore, the question involved in this appeal is if the principal debtor is allowed to be discharged then whether that would release the guarantors as well In this case, as has already been indicated that the defendant No. 1 in the suit being the principal debtor during the pendency of the suit went into voluntary liquidation and Mr. Sanyal was appointed as liquidator. Necessary amendment of the plaint was made impleading the said liquidator as a party in the suit It is also not in dispute that the defendant No. 1 principal-debtor was dissolved on 1st March, 1961 and also during the pendency of the suit the defendants Nos. 2, 4 and 9 died. The appellant after ascertaining these facts took out Master’s Summons for an order, the death of defendants Nos. 2, 4, 6, and 9 and the dissolution of the defendant company, the defendant No. 1 be recorded, the abatement, if there is any be set aside and substitution of Prabuddha Chatterjee as heir and legal representative of the defendant No. 6 and impleading him in the suit. According to the appellant, as the principal debtor stood discharged by operation of law the appellants chose to proceed against the other defendants, the guarantors in the suit. Now the question that arises for consideration is whether under Section 134 of the Contract Act, the guarantors are discharged by reason of appellant’s not proceeding against the principal debtor or allowing the suit to be dismissed against the I principal debtor.
16. Section 134 of the Contract Act reads as follows : —
“The surety is discharged by any contract between the creditor and the principal debtor, by which the principal debtor is released, or by any act or omission of the creditor, the legal consequence of which is the discharge of the principal debtor.”
17. Section 137 of the Contract Act reads as follows:
“Mere forbearance on the part of the creditor to sue the principal debtor or to enforce any other remedy against him does not, in the absence of any provision under the guarantee to the contrary, discharge the surety.”
18. Section 134 consists of two parts. The first part of the section speaks that the sureties are discharged by any contract between the creditor and the principal-debtor, by which the principal debtor is released. This part has no application to the present case as in this case there has not been any contract between the plaintiff being the creditor and the defendant No. 1 being the principal-debtor whereby the principal debtor was released.
19. The second part of Section 134 is to this effect. The sureties are discharged by any act or omissions of the creditor, legal consequence of which is the discharge of the principal-debtor. In this appeal we are to consider whether there has been any act or omission on the part of the appellant being the creditor and the consequence of such act or omission is the discharge of the defendant No. 1, the principal-debtor. In this case, as it appears that the suit is instituted by the appellant against the principal-debtor, the defendant No. 1 and the other defendants who were the guarantors or the sureties. It is not in dispute that the defendant No. 1 during the pendency of the suit was dissolved. According to the appellant, in view of dissolution of the defendant No. 1 the principal debtor, the appellant chose to proceed against the other guarantors. As stated earlier the learned trial Judge held that as the appellant did not choose to proceed against the principal debtor or had released the principal-debtor, the guarantors were also thereby released. It is settled law that the discharge of the principal-debtor by operation of law does not operate as the discharge of the sureties. It is also held by the Supreme Court in the case of Maharashtra State Electricity Board v. Official Liquidator, that dissolution of the principal-debtor would not release or discharge the sureties. Further, we are of the view that in the instant case there has not been any act or omission on the part of the appellant in not proceeding against the defendant No. 1 or releasing the defendant No. 1. In the present case the principal debtor, the defendant No. 1 is discharged by operation of law. Therefore, nothing has been done by the appellant, the result of which is discharge or release of the principal-debtor. It is also pointed out by Dr. Banerjee appearing for the appellant, that in each of the agreement it is provided that nothing done or omitted by the appellant in pursuance of any of the powers, provisions, or authorities contained in this guarantee shall in any way, affect or discharge the liability of the surety. It is also settled that if the creditor expressly reserves his remedy against the surety or generally his securities and remedies against persons other than the principal-debtor, then the release of the principal debtor either by act or omission on the part of the creditor or by operation of law will not discharge the surety. As commented upon by Mulla in his Commentaries on the Contract Act, 10th Edition, page 742, the surety’s right to indemnify against a principal-debtor is a necessary result of such a reservation. It is also the opinion of the learned Author that if a creditor without ceasing to hold the principal debtor liable, prefers to sue the more solvent of two sureties for the debt, this still more obviously, does not discharge the other Surety.
20. It will appear from Section 137 of the Contract Act that mere forbearance on the part of the creditor to sue the principal debtor or to enforce any other remedy against him does not discharge the surety. Therefore, it appears that mere forbearance on the part of the creditor to sue the principal debtor will not discharge the surety. It has been held by certain decisions that “mere forbearance” to sue may spring from a contract or there may be simple forbearance. If such forbearance springs from a contract that will be a case under Section 135 of the Contract Act but if the plaintiff forbears to sue the principal debtor within the period of limitation that itself would not discharge the surety.
21. Therefore, in our view, mere omission to sue the principal debtor or to proceed against the principal debtor in the suit will not operate as a discharge of the sureties.
22. In the case reported in (1978) 82 Cal WN 266 : (AIR 1978 (NOC) 74) the plaintiff instituted a suit against Sri Durga Cotton and Spinnings and Wvg. Mills Ltd., the principal debtor and the Industrial Reconstruction Corporation of India, the guarantor. The principal debtor was declared to be a relief undertaking under the West Bengal Relief Undertakings (Special Provisions) Act, 1972. A notification under the said West Bengal Relief Undertakings (Special Provisions) Act, 1972 was issued by the Government declaring, inter alia, that the operation of all contracts, agreements, settlements and/or other instruments in force shall remain suspended. The guarantor made an application for setting aside of the suit contending, inter alia, as all the contracts which might be applicable to the defendant No. 1, the principal debtor, declared to be a relief undertaking, had been suspended, the cause of action against the guarantor had also remained suspended. This Court held that the cause of action, as it is well settled, against the guarantor is though co-existent with a cause of action against the principal-debtor was independent and separate. Therefore, according to this decision, the discharge of a principal debtor by operation of law does not discharge the surety.
23. The learned trial Judge in dismissing the suit has also observed that having brought the suit against all the guarantors and the principal-debtors and having allowed the suit against some of the guarantors to be dismissed the plaintiff has destroyed the rights of co-guarantors or co-sureties from their right of contribution against those discharged sureties because the claim would be barred by the principles of res judicata and the principles analogous thereto. Under Section 138 of the Contract Act it is provided that where there are co-sureties, a release by the creditor one of them does not discharge the others, neither does it free the surety so released from his responsibility to the other sureties. Therefore, according to Section 138 of the Contract Act if a plaintiff has chosen not to proceed against one or other of the sureties but has chosen to proceed against the rest then the release of the one or the other co-sureties by plaintiff will not free the guarantors so released from his responsibility to the other sureties.
24 The learned trial Judge has also relied on a decision of the Supreme Court (supra). In our view, the learned trial Judge had not appreciated the ratio of the decision of the Supreme Court in the said case. In that case the Supreme Court has recognised that the liability of the surety is joint and several and if a guarantor seeks to enforce the surety Bond against some only of the joint sureties, the other sureties will not on that account be discharged nor will release by the creditor of one of them discharge the other. As pointed out by Dr. Banerjee, in our view, rightly that in that case the Supreme Court was concerned with the fact that three of the sureties appealed from the order of the lower Appellate Court and in that appeal one of the appellants died and the Supreme Court had held that the appeal had abated because the representation of the second appellant had not been brought on record. We accept the interpretation put by Dr. Banerjee that the appeal in that case had abated not because the release of sureties could not be taken as discharge of the others but that the appeal would have affected jointly the rights of the appellants who were three of the sureties. In our view, this decision is not an authority for the proposition that if the suit against one of the co-guarantors is allowed to be dismissed then the suit against other co-guarantors should also be dismissed on the basis of the principles of res judicata as held by the learned trial Judge.
25. One point still remains to be disposed of is that in the instant case whether there have been sufficient reasons for setting aside the abatement. The learned Counsel appearing for the appellant has submitted that the affidavit verifying the petition for abatement was affirmed within the time prescribed by law and only through inadvertence the summons could not be taken out before the expiry of the prescribed period Under the practice of this Court the summons has to be taken out by the Advocate on record of the litigant and it appears that the Advocate on record by inadvertence or otherwise failed to take out the Summons within the time prescribed. It is settled law by now that for the laches of the Advocate the client of such Advocate should not suffer. (See Rafiq v. Munshilal, ). In the instant case, the appellant did everything what it was supposed to do under the law. The appellant verified the petition for setting aside the abatement and the affidavit verifying the same has been duly affirmed within the period prescribed. Therefore, in our view, there is sufficient cause for not making an application for setting aside the abatement within the time prescribed.
26. For the reasons aforesaid, both the appeals are allowed. The judgment and order of the learned trial Judge made on 11th Sept., 1975 are set aside. There will be no order as to costs.
27. There will be an order in terms of prayers (a), (b), (c), (d), (e), and (f) of the Masters’ Summons dated 4th Feb., 1969.
R.N. Pyne, J.
28. 1 agree.