2002 PLP 1252 (CLD)

JAWWAD S. KHAWAJA, J.‑‑‑This appeal impugns the judgment and decree, dated 10‑12‑1990 passed against the appellant Khursid Anwar and others by a learned Single Bench of this Court.

2. The facts of this case are straightforward. The respondent‑Bank filed a suit for recovery of money against the appellant and respondents Nos. 2 to

8. It was the case of the plaintiff that Messrs Zeenat Textile Mills Ltd. had obtained a banking facility and had failed to repay the same. The appellant and the respondents Nos. 3 to 8 were all impleaded as defendants on the basis of personal guarantees executed by them to secure the repayment of the debts of Zeenat Textile Mills Ltd. respondent No.2.

3. The suit of the Bank was decreed against Zeenat Textile Mills Ltd. and the appellant, but was dismissed as against the other defendants, who are respondents Nos. 3 to 8 in the present appeal.

4. Learned counsel for the appellant has advanced three arguments in support of the present appeal. The execution of the personal guarantee by the appellant is not denied by him. He, however. states that the plaintiff‑Bank made a variation in the terms of its agreement with Zeenat Textile Mills Ltd. without the concurrence of the appellant. On this basis. learned counsel argued that the appellant stood discharged of personal liability on account of the provisions contained in sections 133 and 135 of the Contract Act. The alleged variation. On the basis of which the appellant claims benefit of the aforesaid provisions of the Contract Act, is a purported enhancement in the rate 'of interest payable by the principal‑debtor namely Zeenat Textile Mills Ltd.

5. Learned counsel for the appellant drew our attention to the promissory note dated 7‑8‑1975 and other agreements executed contemporaneously with the said promissory note by Zeenat Textile Mills Ltd. In the said documents the minimum rate 13% has been shown as the rate of interest chargeable on the finances availed by Zeenat Textile Mills Ltd. Learned counsel then referred to subsequent documents and to para. 7 of the plaint, which claims a minimum of 14% per annum as interest. According to learned counsel for the appellant this variation was sufficient to discharge the appellant from personal liability for the debts of Zeenat Textile Mills Ltd. because the rate of interest had been varied without the concurrence of the appellant.

6. The submissions of learned counsel are without merit at least on two counts. Firstly, as pointed out by learned counsel for the Bank the enhancement of the rate of interest was approved by the company in a meeting of its directors on 1‑7‑1980. The appellant as one of the directors was present at the said meeting and duly approved the enhancement. He also certified the copy of the minutes of the aforesaid meeting, which was sent to the respondent‑Bank. In these circumstances, it is not open to the appellant to urge that the rate of interest was enhanced without his concurrence. We note that the aforesaid meeting was held in 1980 while the suit of the Bank was filed on 8‑11‑1984. The appellant did not at any point in time, claim discharge from personal liability under sections 133 and 135 of the Contract Act. He cannot, therefore, be allowed to raise the plea in his defence particularly when the record shows that he had agreed to the enhancement of the rate of interest.

7. The second reason why the appellant cannot be allowed to benefit from the aforesaid provisions of the Contract Act is that the liability of Zeenat Textile Mills Ltd. and as a consequence, that of the appellant already stood created when the rate of interest was enhanced. The appellant as such was personally liable for the amount payable by Zeenat Textile Mills Ltd.

8. The next submission of learned counsel for the appellant was that the suit of the Bank was time‑barred. This submission was made on the basis that the loan facilities were advanced by the Bank in 1975 while the suit had been filed on 8‑11‑1984. This contention of learned counsel for the appellant is also without merit. The company had from time to time acknowledged its liability, which had resulted in the extension of time for filing of the suit. We have noted that vide acknowledgement dated 31‑12‑1981 the company acknowledged the outstanding liability of Rs.1,18.66,084.40, which was outstanding on the aforesaid date. The appellant himself signed the acknowledgement on behalf of the company. The suit was filed within a period of three years from the date of the aforesaid acknowledgement. In this view of the matter, it is clear that the suit was time- barred.

9. Finally, learned counsel for the appellant argued that the personal guarantee (Exh.P.5), which the appellant had executed, had been obtained by the respondent‑Bank in blank. He, therefore, argued the same could not be enforced against the appellant. We are afraid this contention is without force. The appellant has not denied his signatures on the guarantee (Exh.P.5). He being a director was fully aware of the terms stipulated by the respondent‑Bank of the finance availed by Zeenat Textile Mills Ltd. The personal guarantees of the directors was one of such terms. In fact the appellant himself wrote a letter (Exh. D.1) to the Bank. dated 13‑3‑1979. Although this letter was written on behalf of Zeenat Textile Mills Ltd. It was signed by the appellant and expressly stated therein that the personal guarantees of the active directors, which included the appellant, should be treated as sufficient compliance of the requirement of the Bank for personal guarantees of the directors. In view of the expressed wording of the letter (Exh.D.1) the appellant cannot be allowed to resile from the personal guarantee.

10. For the foregoing reasons, we find no merit in this appeal which is, therefore, dismissed. S.A. K./K‑130/L Appeal dismissed.