Jabbarbhai Saibibhai Malek vs State Bank of India

Y.B. Bhatt, J.—The pertinent facts, in brief, leading to the present revision are as under:

1.1 The respondent-plaintiff, viz., the State Bank of India had granted a loan to one Ibrahim Albhabhai Karim (hereinafter referred to as the ''debtor). In respect of this loan the present petitioner-original defendant had become a guarantor by executing the relevant document in favour of respondent-bank. It appears that thereafter the present petitioner-defendant had executed a document in favour of the bank which is commonly referred to as a ''revival letter''.

1.2. On an inquiry to the learned counsel for the petitioner as to what is the precise form and meaning of such a revival letter, he states that the same is a document executed by the guarantor in favour of the bank whereby he in his individual capacity acknowledges the debt on his part, and that the execution of such document amounts to an acknowledgment of debt.

1.3 The respondent-Bank as plaintiff filed a Regular Civil Suit No. 33/87 in the Court of Civil Judge (Junior Division), Padra to recover the amount of the loan together with accrued interest. This suit was, however, filed only against the present petitioner, who contends that he is merely a guarantor. The original debtor to whom the loan was issued was not made a party-defendant to the suit.

1.4 The present petitioner, therefore, filed an application at Exh. 10A in the said suit praying that the original debtor to whom the original loan was issued is a necessary and/ or proper party and should be joined as a co-defendant in the suit. The bank contested this application by filing a reply at Exh. 13 wherein it was contended that since the suit against the original debtor became time-barred, it was the present defendant who had executed a revival letter in favour of the bank, and that, therefore, he ceased to be a guarantor and by his act of acknowledging the debt stepped into the shoes of the debtor. In fact and substance, therefore, the contention of the bank was that the defendant was sued not as a capacity of the original guarantor; but as a debtor who has acknowledged a debt in writing.

1.5 The trial Court, after hearing the parties, rejected the petitioner-defendant''s application for joining the original debtor as a party.

1.6 It is this order of rejection which is challenged by way of present revision-application.

It must first be appreciated that on a plain reading of Order 1, Rule 6 makes it clear that it is the option of the plaintiff to sue any of the parties who may be liable on any one contract. This position is not disputed by the learned counsel for the petitioner. Under the circumstances it was open to the bank to sue any one person who had become liable to discharge the debt due to the plaintiff-bank.

However, the matter does not rest there. It is also clear from the reply filed by the bank to the defendant''s application that since the suit against the original debtor had become time-barred, the defendant had executed a revival letter whereby he acknowledged the debt and accordingly stepped into the shoes of the debtor, himself became the debtor in respect of the loan in question. Thus, in fact and substance the suit by the bank is against the debtor who has acknowledged the liability to pay the debt, and is not against the defendant in his original capacity as the guarantor. Under such circumstances the original debtor, against whom the suit on the part of the bank become admittedly time barred is no longer the principal debtor nor can it be said that he is a necessary or proper party to such a suit.

Learned counsel for the petitioner seeks to rely upon the case of the Supreme Court in the case of Union Bank of India Vs. Manku Narayana, . This decision cannot help the present petitioner since it has no application to the facts of the case. The said decision merely lays down a principle that where there is a joint decree against the principal debtor and a guarantor, and where the debt is secured by a mortgage on the property of the debtor, the bank as a decree-holder should first proceed against the mortgaged property and only then proceed against the guarantor. There is a clear distinction between a debtor and a guarantor, which distinction does not and cannot arise on the facts of the present case. As discussed hereinabove, the petitioner-defendant has by his own act stepped into the shoes of the original debtor and has acknowledged the debt and has thereby lost his distinct identity as a guarantor. As aforesaid, the present suit of the bank would then amount to a suit against the debtor himself. In view of the findings aforesaid, it cannot be said that the impugned order suffers from any jurisdictional error which requires interference in the present'' revision u/s 115 of CPC. This revision is, therefore, rejected. Rule discharged. Ad interim relief vacated. No order as to costs.