Case: S. Chattanatha Karayalar Vs. The Central Bank Of India And Others

plaint the plaintiff-bank asked for a decree against the defendants jointly and severally "for the recover of Rs. 2,86,292/11/11 as per accounts annexed". In the plaint it is stated that the plaintiff had given two notices to the defendantsEx. Odated January 1, 1950 and Ex. L dated April 26, 1950 but in neither of these notices has the plaintiff referred to the promissory note executed by the defendants or that the suit was based upon the promissory note. On the contrary, the plaintiff bank referred in Ex.Oto the open loan accounts and asked the defendants to pay the amounts due to the bank under these accounts. It is therefore, not possible for us to accept the contention of Mr. Pathak that the suit is based upon the promissory note and not upon the amount due on the overdraft account. In this connection, we may incidentally refer to the fact that in its statement of the case before this Court, respondent No. I has clearly stated that the claim on the overdraft account against the appellant was valid "because the overdraft was treated as in favour of all the defendants . (appellant and respondents 2 and 3 herein) and that respondent No. 2 was only authorised to operate independently on that amount and that the limit under the overdraft was placed at the disposal of respondent No. 2 by an express authority given by all the defendants (the appellant and respondents 2 and 3", This shows that respondent No. 1s case is that a suit is based on an overdraft, and since the overdraft was treated as in. favour of all the defendants the appellant is liable for the balance due on it. 6. We shall then consider the question whether defendant No. 2 is discharged of his liability as a surety by reason of the alleged conduct of the plaintiff-bank is violating the terms of the agreement - Ex. G or by the alleged fraudulent or negligent conduct of the plaintiff-bank in other ways. It was submitted on behalf of the appellant that the plaintiff-bank had made adjustments in the open loan account and in the clean overdraft account with the 1st defendant by debiting and correspondingly credting in other accounts without the consent of the appellant. It was further alleged that the plaintiff-bank had granted loans to the lst defendant against goods covered by open loan agreement and that it had converted secured loans into simple loans by releasing goods covered by the Bills of Lading against trust receipts and had thereby deliberately frittered away such securities. The question at issue is a mixed question of law and fact and it is unfortunate that the High Court has not properly dealt with this question or given a finding whether the appellant would be discharged from the liability as a surety for the overdraft account because of the alleged conduct of the plaintiff-bank. We consider it necessary that this case should go back on remand to the High Court of Kerala for deciding the issue and to give proper relief to the parties. In this connection, it is necessary to point out that after the High Court delivered its judgment on July 12, 1962, an application was made by the learned Advocate appearing for the appellant that some grounds which had been urged by him before the High Court had not been considered by it. The High Court, therefore, adopted the somewhat unusual course of delivering a supplemental judgment. Mr. Desai contends that even the supplemental judgment has failed to consider the appellants contention that he had been discharged by reason of the fact that adjustments were made by respondent. No. 1 indiscriminately in respect of its dealings in three or four different accounts with respondent No. 2 to the prejudice of the appellant. We have broadly indicated the nature of the contention raised by Mr. Desai. 7. Ordinarily, we do not permit parties to urge that points raised on their behalf in the High Court had not been considered, unless it is established to our satisfaction that the points in question had in fact been urged before the High Court and the High Court, through inadvertence, has failed to consider them. In the presem case, we are not prepared to take the view that the grievance made by Mr. Desai is not well-founded. It does appear that after the first judgment was delivered, an application was made by the learned Advocate who argued the appeal himself before the High Court in which he set out his complaint that some of the points which he had argued before the High Court had not been considered by it. That is why the High Court delivered a supplemental judgment. Aggrieved by the said judgment, the appellant filed an application for certificate before the High Court, and in this application again he has taken specific grounds, e.g. under paragraph 6(k) and paragraph 8 that even the supplemental judgment has failed to consider some of the points, urged by him. While granting the certificate, the High Court has made no comment on these grounds. It is to be regretted that when these grounds appear to have been urged before the High Court, the High Court should have failed to deal with them even in its supplemental judgment. That is the reason why we think it is necessary that the matter must go back to the High Court for disposal of the appeal in the light of this judgment. 8. Mr. Pathak, no doubt, seriously contested the validity of Mr. Desais argument. He urged that the adjustments on which Mr. Desai has founded his claim for discharge do not really support his case. We propose to express no opinion on this point. As we have just observed, the contention thus raised amounts to a mixed question of fact and law and we do not think it would be expedient for us to deal with it ourselves when the High Court has omitted to consider it.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]6. We shall then consider the question whether defendant No. 2 is discharged of his liability as a surety by reason of the alleged conduct of the plaintiff-bank is violating the terms of the agreement - Ex. G or by the alleged fraudulent or negligent conduct of the plaintiff-bank in other ways.It was submitted on behalf of the appellant that the plaintiff-bank had made adjustments in the open loan account and in the clean overdraft account with the 1st defendant by debiting and correspondingly credting in other accounts without the consent of the appellant. It was further alleged that the plaintiff-bank had granted loans to the lst defendant against goods covered by open loan agreement and that it had converted secured loans into simple loans by releasing goods covered by the Bills of Lading against trust receipts and had thereby deliberately frittered away such securities. The question at issue is a mixed question of law and fact and it is unfortunate that the High Court has not properly dealt with this question or given a finding whether the appellant would be discharged from the liability as a surety for the overdraft account because of the alleged conduct of the plaintiff-bank. We consider it necessary that this case should go back on remand to the High Court of Kerala for deciding the issue and to give proper relief to the parties. In this connection, it is necessary to point out that after the High Court delivered its judgment on July 12, 1962, an application was made by the learned Advocate appearing for the appellant that some grounds which had been urged by him before the High Court had not been considered by it. The High Court, therefore, adopted the somewhat unusual course of delivering a supplemental judgment. Mr. Desai contends that even the supplemental judgment has failed to consider the appellants contention that he had been discharged by reason of the fact that adjustments were made by respondent. No. 1 indiscriminately in respect of its dealings in three or four different accounts with respondent No. 2 to the prejudice of the appellant. We have broadly indicated the nature of the contention raised by Mr. Desai7. Ordinarily, we do not permit parties to urge that points raised on their behalf in the High Court had not been considered, unless it is established to our satisfaction that the points in question had in fact been urged before the High Court and the High Court, through inadvertence, has failed to consider them. In the presem case, we are not prepared to take the view that the grievance made by Mr. Desai is not well-founded. It does appear that after the first judgment was delivered, an application was made by the learned Advocate who argued the appeal himself before the High Court in which he set out his complaint that some of the points which he had argued before the High Court had not been considered by it. That is why the High Court delivered a supplemental judgment. Aggrieved by the said judgment, the appellant filed an application for certificate before the High Court, and in this application again he has taken specific grounds, e.g. under paragraph 6(k) and paragraph 8 that even the supplemental judgment has failed to consider some of the points, urged by him. While granting the certificate, the High Court has made no comment on these grounds. It is to be regretted that when these grounds appear to have been urged before the High Court, the High Court should have failed to deal with them even in its supplemental judgment. That is the reason why we think it is necessary that the matter must go back to the High Court for disposal of the appeal in the light of this judgment8. Mr. Pathak, no doubt, seriously contested the validity of Mr. Desais argument. He urged that the adjustments on which Mr. Desai has founded his claim for discharge do not really support his case. We propose to express no opinion on this point. As we have just observed, the contention thus raised amounts to a mixed question of fact and law and we do not think it would be expedient for us to deal with it ourselves when the High Court has omitted to consider it.