IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD WEDNESDAY, THE SEVENTEENTH DAY OF FEBRUARY TWO THOUSAND AND TEN HON’BLE SRI JUSTICE G. BHAVANI PRASAD C.C.C.A. No.149 of 1994 Between: The Government of A.P. rep. by its Secretary, Dept. of Industries and Commerce, Hyderabad .. Appellant AND State Bank of Hyderabad having its Head Office at Gunfoundry, Hyderabad, per Chief Manager Sri G. Ganeshan and others .. Respondents Appeal against the judgment and decree, dated 22-11-1991 in O.S. No.241 of 1984 on the file of the II Additional Judge, City Civil Court, Hyderabad. The appeal coming on for hearing, upon perusing the grounds of appeal and upon hearing the arguments of Smt. A.B. Lalitha Gayathri, learned Assistant Government Pleader representing the learned Government Pleader for appeals for the appellant, the Court delivered the following: JUDGMENT: The 3rd defendant in O.S. No.241 of 1984 on the file of the II Additional Judge, City Civil Court, Hyderabad filed this appeal against the judgment and decree, dated 22-11-1991. The parties are referred to herein as they are arrayed in the suit. The plaintiff bank filed the suit for recovery of Rs.25,175-05 ps. with interest at 16½ per cent per annum from the date of the suit till the date of realization and costs from defendants 1 to 3 jointly and severally. The plaintiff claimed that for supply of power looms by the 1st defendant manufacturer to the 2nd defendant co-operative society, the 3rd defendant stood guarantee and all the three defendants executed necessary documents in favour of the bank. Defendants 1 and 2, who utilized the bills discounting facility granted to the 1st defendant, and the 3rd defendant, who stood as guarantor for repayment, were liable to pay the suit amount under three bills, dated 19-08-1974 and in respect of the first two bills, O.S. No.814 of 1979 was filed, while in respect of the 3rd bill the present suit was filed. The suit amount remained unpaid in spite of a statutory notice and hence, the suit. The 1st defendant resisted the suit contending that the present suit is not maintainable in view of O.S. No.814 of 1979 and it was the 3rd defendant Government who has to repay the amounts due in respect of the power looms supplied to the co- operative society on its guarantee. The 2nd defendant society remained ex parte, while the 3rd defendant Government contended that the bank could not have sued, while it had already agreed to reschedule the repayment of instalments. The suit in violation of the understanding arrived at in the joint meetings with the bank is premature and has to be dismissed. On such pleadings, the trial Court settled the following issues for trial. 1. Whether the 1st defendant is not liable to pay the suit claim as contended in the written statement of D.1 ? 2. Whether the suit is premature ? 3. To what relief ? P.W.1 and D.W.1 were examined during trial and Exs.A.1 to A.9 and B.1 to B.9 were marked. The trial Court found that it is the 3rd defendant that guaranteed the payment of amount in respect of the cost of the power looms supplied to the 2nd defendant by the 1st defendant and consequently, Ex.A.1 agreement cannot be legally enforced against the 1st defendant. The trial Court also found that the suit was filed much later to the expiry of the guarantee period and cannot be considered to be premature. The trial Court concluded that it is only the society and the Government that are liable to pay the suit amount and accordingly decreed the suit against them with costs while dismissing it without costs against the 1st defendant. The Government filed the present appeal contending that exonerating the 1st defendant from liability was incorrect and the defence of res judicata was left undecided vitiating the impugned judgment and decree. Heard Smt. A.B. Lalitha Gayathri, learned Assistant Government Pleader representing the learned Government Pleader for appeals and none appeared for the 1st respondent though it was served with notice of the appeal. However, the appeal stood dismissed for default against respondents 2 and 3/defendants 1 and 2 in terms of the order of this Court, dated 17-12-2007. When the judgment of dismissal of the suit without costs against the 1st defendant is sought to be challenged in this appeal, it cannot be adjudicated in the absence of the 1st defendant against whom it was dismissed for default. The question of res judicata having been left undecided or the impugned judgment being vitiated by any other factors cannot be gone into on merits in the absence of the society to whom the power looms were supplied and also the supplier of the power looms in respect of which transaction, the 3rd defendant stood guarantee. As the liability fixed by the impugned decree is joint and several against the 2nd and 3rd defendants, the appeal remains incomplete and incompetent after the dismissal of the appeal for default against the 2nd defendant. Under the circumstances, the appeal has to fail as not having been properly constituted as of now. In the result, the appeal is dismissed without costs against the 1st respondent also, while it was already dismissed for default against respondents 2 and 3 vide this Court’s order, dated 17-12-2007. _____________________ G. BHAVANI PRASAD, J Date: 17-02-2010 Svv