JUDGMENT
Ratnakar Dash, J.
1. Defendants Nos. 2 and 3 in Money Suit No. 2 of 1984 have preferred this appeal against the judgment and decree passed by the learned Subordinate Judge, Rairangpur. By the impugned judgment they as well as defendant No. 1, respondent No. 2 herein, have been jointly and severally held liable to pay to the Bank of India, respondent No. 1, a sum of Rs. 22,135.75 with 14 per cent. interest per annum. The Bank of India, Badampahad, filed the aforesaid money suit against defendant No. 1, the debtor and defendant Nos. 2 to 4 as guarantors for realisation of
Rs. 22,135.75 with 14 per cent. interest from December 22, 1982, till date of realisation.
2. The plaintiff’s case, briefly stated, is that defendant No. 1 while carrying on business in timber at Badampahad, approached the bank for accommodation of Rs. 20,000. Defendants Nos. 2, 3 and 4 agreed to stand as guarantors for defendant No. 1. Acceding to the request of defendant No. 1, the plaintiff-bank advanced Rs. 20,000 as loan on his executing a demand promissory note as well as a deed of hypothecation of immovable properties on January 10, 1979. Defendants Nos. 2 to 4 who stood as guarantors executed a letter of continuing guarantee in favour of the plaintiff on the same day agreeing that they would be jointly and severally liable to pay off the loan with interest incurred by defendant No. 1. Subsequently, defendants Nos. 1, 2 and 3 acknowledging the liability executed deeds of acknowledgment from time to time. Having availed of the loan as aforesaid, defendant No. 1 defaulted in making payment and closed down his business at Badampahad. To pay off the entire loan with interest, the plaintiff-bank issued notice through its advocate on October 14, 1982, but despite that when no payment was made it filed the present suit against defendant No. 1 and the guarantors, defendants Nos. 2 to 4 for realisation of the entire loan with interest to the tune of Rs. 22,135.75 paise.
3. Defendant No. 1 on being noticed, did not contest the suit and was set ex parte. Defendants Nos. 2 and 3, two of the guarantors, filed their written statement contending, inter alia, that they never stood as guarantors for defendant No. 1. Since defendant No. 2 was having transaction with the plaintiff-bank, the manager of the bank as well as defendant No. 1 with whom he had prior acquaintance requested both defendants Nos. 2 and 3 to be witnesses to documents executed by defendant No. 1 in favour of the bank for obtaining loan. On such representation these defendants in good faith signed some papers/documents without knowing the contents thereof. Neither the manager of the plaintiff-bank nor defendant No. 1 disclosed that they had signed such documents as guarantors for the latter. They, therefore, urged that they being not guarantors for defendant No. 1 are not liable to pay the loan incurred by him. Their further case was that since defendant No. 1 hypothecated the stock of timber, the plaintiff-bank without taking steps to realise the loan from the said stock, allowed defendant No. 1 to part with the same and, therefore, even if they are held to be guarantors, their liability stood discharged. Besides the above, they pleaded that the suit was not maintainable and it was barred by limitation.
4. On the above pleadings the learned trial judge framed 7 issues and answered all the issues in favour of the plaintiff and decreed the suit. Hence, the present appeal.
5. There being no contest by defendant No. 1, the plaintiffs case that defendant No. 1 had incurred loan remained unchallenged. Defendants Nos. 2 and 3 while denying their liability as guarantors raised two fold contentions, viz., (i) that they appended their signature to certain documents without knowing the contents thereof and more particularly they were unaware that one such document was a deed of guarantee and further they were not given to understand that they would be liable in case defendant No. 1 failed to repay the loan ; and (ii) that the plaintiff ought to have taken steps both against defendant No. 1 and the hypothecated goods for realisation of the entire loan and only thereafter if any amount remained unpaid, it would have proceeded against them. The learned trial judge on scrutiny of the evidence, both oral and documentary negatived the aforesaid contentions and decreed the plaintiff’s suit.
6. With the assistance of learned counsel for the parties, I have scrutinised the evidence on record in detail and concur with the finding arrived at by the learned court below about the liability of defendants Nos. 2 and 3 as guarantors.
7. In the present appeal, learned counsel appearing for defendants Nos. 2 and 3 without assailing the factual aspects of the case, contended that the plaintiff instead of taking timely steps against defendant No. 1, to realise the loan from the hypothecated goods allowed him (defendant No. 1) to part with the goods and, therefore, the liability of the guarantors, if any, stood discharged as provided in Section 139 of the Contract Act. Per contra, learned counsel appearing for the plaintiff urged that in view of the law decided by this court in Bhawanishankar Patra v. State Bank of India, AIR 1986 Orissa 247, Section 139 of the Contract Act having no application to the present case, the impugned judgment cannot be faulted. To appreciate the aforesaid contentions, it is apposite to refer to Section 139 of the Contract Act which reads as under :
“139. Discharge of surely by creditor’s act or omission impairing surety’s eventual remedy.–If the creditor does any act which is inconsistent with the right of the surety, or omits to do any act which his duty to the surety requires him to do, and the eventual remedy of the surety himself against the principal debtor is thereby impaired, the surety is discharged.”
8. A bare reading of the aforesaid provision would show that the surety is discharged if the creditor does any act which is inconsistent with the rights of the surety or omits to do any act which his duty to the surety requires him to do and the eventual remedy of the surety himself against the principal debtor is impaired. Thus, the impairment of the eventual remedy of the surety is essential for application of the said provision, in addition to the acts of commission or omission on the part of the creditor. In Bhawanishankar Patra’s case, AIR 1986 Orissa 247, a similar contention
was raised and the Division Bench repelling the said contention, observed that the essential ingredients having not been satisfied, the provision of the said Act was not attracted in order to give benefit thereof to the surety. On a reading of the aforesaid decision I am of the opinion that the same squarely applies to the facts of the present case. Thus, I hold that defendants Nos. 2 and 3 being guarantors are liable to pay the decretal dues to the plaintiff.
9. In the result, the appeal fails and the same is dismissed. In the circumstances, there shall be no order as to costs.