1989 PLP 366 (MLD)

‑‑‑S. 130‑‑Continuing guarantee‑‑Revocation of‑‑Continuing guarantee, being a contract between parties, namely, creditor and surety, same, could be put to an end by consent of parties to absolve each other of obligations following therefrom‑‑Same could be revoked by giving notice to creditor and its termination could not be prohibited even for a fixed period. Messrs Sadiqeen Traders, Karachi v. S.M. Alam, Section Officer 1980 CLC 1851; Louis Thomas Pinto v. Ghulamali M. Esmailji AIR 1941 Sind 193 and Abdul Bary Sadagar v. Belayat Ali Sadagar AIR 1917 Cal. 699 ref. (d) Contract Act (IX of 1872)‑‑ ‑‑‑S. 126‑‑Contract of guarantee‑‑Termination of‑‑Contract of guarantee, being a contract to perform a promise or discharge a liability, if same was entered into by volition of parties, in a like exercise of volition, it could be terminated. (e) Civil Procedure Code (V of 1908)‑‑ ‑‑‑S. 60 & O. XXI, R. 49‑‑Contract Act (IX of 1872), Ss. 126, 129 & 130‑ Attachment of amount of firm lying with Bank as guarantee‑‑Act of attaching money being an act of Court, Bank, held, would be absolved from any penal consequences‑‑Proper course would be to sponsor an objection against attachment of amount either by firm or judgment‑debtor himself. MA. Zafar for Petitioner. This Civil Revision is by the Allied Bank of Pakistan against an order dated the 23rd of January, 1989, of the learned Add]. District Judge, Lahore, whereby the amount in question placed with the petitioner by Messrs S.M. Rafiq and Sons was attached in execution of a decree passed against one of its partners Muhammad Rafiq. It was bitterly pointed out by Mr. MA. War, Advocate, that their objection petition was not entertained by the Executing Court and that it was thrown back to the face of the counsel. If it is so, I really deprecate it. The procedure does not countenance throwing back petitions like that. The petitioner- Bank should have been allowed an opportunity to prove their case as they genuinely felt that the money being kept with them in trust in connection‑with a guarantee given by them to the Railway Department was not liable to attachment in execution of the decree passed against one of the partners of the said firm.

2. Be that as it may, I had had the advantage of hearing the learned counsel at length. He could not show any provision of the Contract Act whereby money held by a Bank as a guarantee is not available for attachment. Referring to sections 126, 129 and 130 of the Contract Act, he claimed that this guarantee was not a continuing guarantee and, therefore, it could not be revoked except by efflux of time. I am afraid none of these provisions precludes an Executing Court from laying hand on such an amount. Revocation or non‑revocation of the guarantee was something between the parties. The Court had its own authority. If it is not exempted by provisions of section 60, C.P.C.; or by any other provision of law, it remains liable to attachment.

3. However, learned counsel cited Order XXI, rule 49, C.P.C., pointing out that the property of a firm may not be attached for payment of liability of one of its constituent members. This objection apparently is well‑placed but it is for the firm to come and agitate. They have not come so far to claim such an exemption. It cannot, therefore be pressed by the petitioner‑Bank. Reliance was placed upon Messrs Sadiqeen Traders, Karachi v. S.M. Alam, Section Officer (1980 CLC 1851) urging that the amount in question not being a "debt", nor being in possession of the judgment‑debtor was not liable to attachment. Similarly Louis Thomas Pinto v. Ghulamali M. Esmailji (AIR 1941 Sind 193) was cited to show that security deposited with Excise Department was held not attachable against the judgment‑debtor and likewise Abdul Bary Sadagar v. Belayat Ali Sadaga (AIR 1917 Cal. 699) was referred to in support of the contention that a guarantee could not be revoked by mere notice so as to nullify the effect of the security.

4. A careful perusal of these authorities would show that the case in hand i; quite distinguishable. The security deposited with the Excise Department may be exempt under the relevant provisions. Besides, it is a deposit with a Government Department for their own security. By its very nature, it has to be protected against all other claims. In regard to the rule laid down in the Abdul Bary Sadagar's case it related to a "continuing guarantee" whereas the one in hand was not of that type. Section 130 of the Contract Act provides that a "continuing guarantee" could be revoked by the surety in regard to future transactions, giving notice to the creditor. As already remarked, there is no provision in the Contract Act which may prohibit termination of a guarantee even for a fixed period. After all it is a contract which can be put an end to by the consent of the parties, namely, the creditor and the surety to absolve each other of the obligations flowing therefrom. The very definition of the "contract of guarantee" envisaged in section 126 points out that it is a contract to perform a promise to discharge a liability. Since it is entered into by the volition of parties, it could be in a like exercise of volition terminated. Besides all else, the act of attaching the money is an act of Court. The Bank shall obviously be absolved from any penal consequences. The proper course would have been to sponsor an objection against the attachment either by the firm or the judgment‑debtor himself. The both are keeping themselves away and the Bank has come to take up the cudgels for them. Probably they entertained an apprehension that they will be made liable by the Railways. In the absence of exemption from attachment of the money held by them, they cannot be held .responsible for an act of Court. With this observation, the revision petition is disposed of. H.B.T./A‑546/L Order accordingly.