Consideration for guarantee

Liability of the guarantors was co-extensive with that of the principal debtor, unless otherwise was provided in the letter of guarantee

Anything done or promise made for the benefit of the principal debtor was sufficient consideration

Letter of guarantee, in spirit, was a contract to perform the promise or discharge the liability of a third person, however, as and when default occurred

In an action initiated by a creditor against the principal borrower/customer, and guarantors, the creditor was only required to establish the liability of the principal debtor and occurrence of default as well

Defendants, under Ss. 126, 127 & 128 of Contract Act, 1872 and under the terms and conditions of the letter of guarantee, being guarantors, were liable to liquidate the liability/dues outstanding against the defendant/principal debtor, as their liability was co-extensive.