RAM NARAIN VERSUS LT. COL.

HARI SINGH AND OTHERS

BEFORE THE HON’BLE SUPREME COURT OF INDIA

In the matter of,

RAM NARAIN

VERSUS

LT. COL. HARI SINGH AND OTHERS

SUBMISSION TO

THE HIGH COURT OF RAJASTHAN

30th APRIL 1963

MEMORANDUM FOR THE APPELANT

SIDDHARTH DEWANGAN
Roll No. 163, Semester- II

(COUNSEL FOR THE APPELANT)

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 RAM NARAIN VERSUS LT. COL. HARI SINGH AND OTHERS

TABLE OF CONTENTS

List of Abbreviations…………………………………………………………………..iii

Index of authorities……………………………………………………………………iv

I. Statement of Jurisdiction………………………………………...…………………..iv

II. Statement of facts……………………………………………....…………………....v

III. Issue raised…………………………………………………………………………viii

IV.Summary of arguments……………..………………………………………………viii

V. Written submission………….…………………………………...……………….…..ix

VI. Prayer…………………………………………………………….………………….xiii

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 RAM NARAIN VERSUS LT. COL. HARI SINGH AND OTHERS

ABBREVIATIONS

 & And

 AIR All India Reported

 B&Ald Barnewall& Alderson

 Co. Company

 CTC Canada Tax Cases

 Del Delhi

 DLR Dominion Law Reports

 Ed. Edition

 Guj Gujarat

 Hon’ble Honourable

 ILR Indian Law Reporter

 LR Law Reports (England)

 LT Law Times Reporter

 M&S Maule & Selwyn

 QB Queen’s Bench Reports

 QBD Queen’s Bench Division (England)

 S. Section

 SC Supreme Court

 v. Versus

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 RAM NARAIN VERSUS LT. COL. HARI SINGH AND OTHERS

INDEX OF AUTHORITIES

LIST OF CASES

 Nanak Ram v. Mehin Lal ILR 1 All 487.

 Kali Charan v. Abdul Rahman AIR 1918 PC 226.

 Chakhan Lal v. Kanhaiya Lal, MANU/UP/0225/1928.

 Ghulam Husain Khan v. Faiyaz Ali Khan, MANU/OU/0050/1940.

BOOKS REFERRED

 AVTAR SINGH, CONTRACT AND SPECIFIC RELIEF, (10th ed. 2013)

 CHITTY ON CONTRACTS, Vol. II, 22nd (1961) EDITION

 POLLOCK & MULLA, INDIAN CONTRACT AND SPECIFIC RELIEF ACTS, (13th
ed. 2011)

STATEMENT OF JURISDICTION

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 RAM NARAIN VERSUS LT. COL. HARI SINGH AND OTHERS

The appellant has approached the Honorable Supreme High Court of Rajasthan under Article
136 of the Indian Constitution.

STATEMENT OF FACTS:

1. A Joint Hindu family firm of the name and style of Asaram Kedarmal instituted a suit in the

Court of the Civil Judge, Suratgarh for the recovery of a sum of Rs. 6,400/8/6 as principal

and Rs. 2,657/7/6 as interest against Harisingh Sikh and Lt. Col. Harisingh To avoid

confusion I shall be referring in this judgment one as Harisingh and the other as the Lt. Col.

The plaintiff started money dealings with Harisingh who was a tenant of the Lt. Col. The

latter undertook the responsibility of paying if any of the dues of Harisingh remained unpaid.

The transactions between the plaintiff and Harisingh were settled and cleared off and

Harisingh executed an entry in the account book of the plaintiff for having received a sum of

Rs. 7500/- in cash on 18-12-1953. The Lt. Col. signed this entry stating that he was

responsible for the repayment of this amount of money. Other items consisting of the sum of

Rs. 175/- and Rs. 21/- which remained due on the basis of the previous accounts together

with another sum of Rs. 3/- were also claimed. A credit was given in this Khata for Rs.

1298/7/6 from some separate account of the It. Col. and thus the total claim made by the

plaintiff came to Rs. 9058/- inclusive of interest at the rate of Rs. 1/4/- per cent per mensem.

2. Harishigh admitted the existence of the previous accounts between him and the plaintiff and

pleaded that it was settled and cleared. He denied having executed the entry in the sum of

Rs. 7500/- and contended that he had never borrowed this amount. The claim for interest

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 RAM NARAIN VERSUS LT. COL. HARI SINGH AND OTHERS

was also disputed. He pleaded that he used to deliver his entire agricultural produce to the

plaintiff's firm and in fact he had paid the plaintiff's dues five times over. Some other legal

pleas were also raised which are no longer in controversy and need not be mentioned.

3. The Lt. Col. repudiated the claim of the plaintiff and denied the allegation that he had

undertaken the responsibility for the re-payment of the alleged loan. He pleaded lack of

consideration for his suretyship although he admitted having signed the entry. He explained

his signatures by saying that Harisingh and the plaintiff has certain old accounts over which

there was some dispute. Harisingh refused to sign the entry unless the position of his

previous accounts was clarified and it was for the purpose of explaining the accounts to

Harisingh that he had undertaken the responsibility and put his signatures and not for

repaying the alleged debt

4. The Civil Judge, Suratgarh passed a decree for the principal amount of Rs. 6204.62nP.

against Harisingh and the Lt. Col. but dismissed the suit in respect of other claims.

Dissatisfied with this judgment and decree the Lt. Col. preferred an appeal before the

District Judge, Ganganagar and the plaintiff preferred cross-objections. The learned District

Judge held that no cash consideration passed between the parties at the time of the execution

of the entry in the account book and, therefore, the Lt. Col. as a surety was not liable in view

of the provisions of Section 127 of the Indian Contract Act. He found that no rate of interest

having been mentioned in the entry he was unable to accept the plaintiff's version that the

defendant agreed to pay interest at the rate of Rs. 1/4/- per cent per mensem and accordingly

rejected the cross-objections. Aggrieved against this judgment and decree the plaintiff has

now preferred this second appeal.

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ISSUES RAISED

1. Whether the contract of guarantee entered into by the Lt. Col. is

supported by consideration?

2. Whether the court has jurisdiction in Khamgaon as contract was concluded in

Khamgaon?

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 RAM NARAIN VERSUS LT. COL. HARI SINGH AND OTHERS

SUMMARY OF ARGUMENTS

1. THE CONTRACT OF GUARANTEE ENTERED INTO BY THE LT. COL. IS

SUPPORTED BY CONSIDERATION.

Section 127 of Indian Contract Act says “Anything done, or any promise made, fir the benefit

of the principal debtor may be a sufficient consideration to the surety for giving a guarantee.

In para-graph 1 of the plaint the plaintiff stated that the defendants, namely, Harisingh and the

Lt. Col. began their money dealings and the Lt. Col. undertook the responsibility for the

repayment of the loan of Rs. 7500/-. In Ex. 2 dated 18-12-1953 it is stated that Harisingh

received cash amounting to Rs. 7500/-. On this entry the Lt. Col. has stated and he has signed

these words. If the plaintiff had succeeded in proving the case that the sum of Rs. 7500/- was

given in cash to Harisingh, the principal debtor, by the creditor and the Lt. Col. guaranteed the

performance of this contract then the contract of guarantee was obviously supported by

consideration, and would have been enforceable against the Lt. Col.

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WRITTEN SUBMISSION

THE CONTRACT OF GUARANTEE ENTERED INTO BY THE LT. COL. IS

SUPPORTED BY CONSIDERATION.

1 According to Section 126 of the Indian Contract Act, "A 'contract of guarantee' is a

contract to perform the promise, or discharge the liability, of a third person in case of

his default." Guarantee is, therefore, in the nature of "a collateral engagement to

answer for the debt, default or mis-carriage of another as distinguished from an

original and direct engagement for the parties own act." (Chitty on Contracts, Vol. II,

22nd (1961) Edition). On the question of consideration necessary to support an

engagement of guarantee the relevant section of the Indian Contract Act is 127, which

reads as follows :

"Anything done, or any promise made, for the benefit of the principal debtor may be a

sufficient consideration to the surety for giving the guarantee."

2 For the validity of a contract of guarantee it is adequate consideration if "anything is

done or any promise made for the benefit of the principal debtor." The nature of the

things done which constitutes such consideration can be gleaned from some decided

cases to which reference has been made by the learned counsel for the parties.
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3 In Nanak Ram v. Mehin Lal ILR 1 All 487 where N. advanced money to) K. on a

bond hypothecating K.'s property, arid mentioning M. as surety for any balance that

might remain due after realization of K.'s property, M. being no party to K.'s bond, but

having signed a separate surety-bond two days subsequent to the advance of the

money, it was held that the subsequent surety bond was void for want of consideration

under Section 127 of the Indian Contract Act.

4 In Kali Charan v. Abdul Rahman AIR 1918 PC 226 the surety bond though executed

at a date subsequent to the principal agreement (a compromise approved by a Court)

was executed in pursuance of one of the terms of the agreement and their Lordships of

the Privy Council held that it amounted to something done or a promise made for the

benefit of the principal debtor was, therefore, a sufficient consideration for a surety for

giving a guarantee.

5 In Chakhan Lal v. Kanhaiya Lal, MANU/UP/0225/1928 a person stood surety for his

brother for the payment of a sum, part of which was due on previous debts of the

brother, part was due on hundis jointly executed by both, part was paid at the time the

person agreed to stand as surety and part was to be paid later on by the creditor who

did not pay the same. It was agreed that the surety would be released on payment of a

certain sum. The learned Judges held that there was sufficient consideration for the

undertaking of suretyship for the whole sum to render it valid even though the surety

may not have benefited from any of the advances made.

6 In Ghulam Husain Khan v. Faiyaz Ali Khan, MANU/OU/0050/1940 it has been held

that the word 'done' in Section 127 shows that past benefit to the principal debtor can

be good consideration for a bond of guarantee. Hence, where a lessee has agreed to

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pay the amount due under the lease by certain instalment and after some days a person

executes a surety bond binding himself to pay certain amount in default of payment of

instalments the surety bond cannot be said to be without consideration.

7 From all the cases aforesaid as well as from the language of Section 127 it clearly

emerges that the creditor must have done some thing for the benefit of the principal

debtor to sustain the validity of a contract of guarantee. There is some divergence,

however, on the view whether the benefit is given at the time of the execution of the

guarantee or even a past benefit can constitute a valid consideration for the sustenance

of such an engagement.

8 In order to appreciate the question whether in the present case there is adequate

consideration or not it will be profitable to recall the circumstances in which the

guarantee in the case before me was given. In para-graph 3 of the plaint the plaintiff

stated that the defendants, namely, Harisingh and the Lt. Col. began their money

dealings and the Lt. Col. undertook the responsibility for the repayment of the loan of

Rs. 7500/-. In para. 2 dated 18-12-1953 it is stated that Harisingh received cash

amounting to Rs. 7500/-. On this entry the Lt. Col. has stated and he has signed these

words. If the plaintiff had succeeded in proving the case that the sum of Rs. 7500/- was

given in cash to Harisingh, the principal debtor, by the creditor and the Lt. Col.

guaranteed the performance of this contract then the contract of guarantee was

obviously supported by consideration, and would have been enforceable against the Lt.

Col.

9 .The facts as they transpired at the time of the trial are that no cash was given on 18-

12-1953 and the amount mentioned in paragraph 2 was a result of past accounts

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between the parties from which a balance of Rs. 7500/- remained to be paid.

According to the version of the plaintiff himself the previous account consisted of

several items which were borrowed by Harisingh from time to time long before the

execution of document paragraph 2. The learned District Judge has also found that the

debt covered by paragraph 2 was contracted by defendant 1 Harisingh long before the

execution of the document and no cash consideration as alleged by the plaintiff in his

plaint and shown by him in his account books has been proved to have passed to

Harisingh at the time of the execution of Ex. 2. A reference to the previous accounts

goes to show that all the previous dues were paid off by Harisingh on 16-12-1963.

This is an unequivocal admission in the plaintiffs own account book. The cass which

comes out from the plaintiff's account books, therefore, is that previous accounts were

squared up on 16-12-1953 and the document came to be written on 18-12-1953. The

cash alleged to have been paid by Ex.2 was in fact never paid. If Harisingh stood

discharged o1 all his liabilities on 16-12-1953 and according to the account books of

the plaintiff no cash passed when came to be written nothing was done by way of

benefit to Harisingh on 18-12-1953 when Lt. Col. came to execute the endorsement of

guarantee on paragraph. 2. Assuming for the sake of argument that Harisingh executed

this Khata for the past benefits and in constitution of previous accounts so far as the

Lt. Col. is concerned the question still remains whether they will constitute valid-

consideration.

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PRAYER

Therefore, in the light of issues raised, arguments advanced and authorities cited, it is most
humbly prayed before this Hon’ble court that it may be pleased to declare and adjudge that:

A. The appeal is allowed.

B. The contract of guarantee entered into by Lt. Col. Harisingh has consideration.

And/Or to pass any other order, which this court may deem fit in the interest of Justice, Equity
and Good Conscience.

All of which is most humbly prayed.

Place: Rajasthan Date: 30th April 1963

Council on behalf of the Appellant
Siddharth Dewangan

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