B.M. Thulasidas, J. 1. These appeals respectively are by the plaintiff and the first defendant in O.S. No. 227 of 1983 of the Sub-Court, Irinjalaguda. The suit was for recovery of amounts due under an overdraft account the first defendant had with the plaintiff-banking company at its "New Market Branch", Abu Dhabi. It was shifted to the main branch at Sheikh Khalifa Street, Abu Dhabi, effective from August 4, 1983. The defendants are brothers. The first defendant ran a business under the name and style Elite. Stores, which was subsequently changed as Elite Super Market. The second defendant had another business under the name Elite Enterprises. In March, 1974, the first defendant opened a current account in the name of Elite Stores and he was allowed different types of credit facilities for his business. He operated the account satisfactorily for some time. But later he became irregular. On April 12, 1980, all his liabilities were adjusted except Dh. 169603.76 that was outstanding under the overdraft account No. 01000132. He was requested to settle and close the account. In April itself and in September that year he made some payments in cash and by cheques drawn on the Bank of Baroda, with whom also he had an overdraft account. But these cheques were dishonoured for want of funds in his account. The cash remittances were duly accounted for in his accounts. By September, 1980, he ran into financial difficulties. The Bank of Baroda instituted legal proceedings against him. His business Elite Super Market was attached and it was closed on September 17, 1980. He was again contacted and asked to settle the accounts, failing which he was warned that legal proceedings will be initiated. In that situation, he and his brother, the second defendant, came to the bank on September 21, 1960, with a request not to take proceedings for recovery and sought time to pay the amount, This was accepted on the conditions that they should pay Dh. 10,000 towards the account and that the second defendant must offer himself as surely for payment of the balance amount and interest. Accordingly, they remitted Dh. 10,000 and the second defendant also executed a deed of guarantee. But shortly thereafter they closed down their business and left Abu Dhabi to settle down at their native place. Attempts to recover the balance amount in the overdraft account were futile. As on November 27, 1980, Dh.
240,115.14 the equivalent of Rs. 6,65,138.89 and interest at 17 per cent. was due, to recover which the suit was laid.
2. In the written statement, the first defendant denied the maintainability of the suit which he said also was not properly laid. He admitted that he was the owner of Elite Stores at Abu Dhabi, which was subsequently named as Elite Super Market. The second defendant also had a business as alleged. He also said that he had transactions with the plaintiff through the Bank of Baroda, where he maintained an account. He denied the correctness of the amount claimed and said that the transactions had not been correctly shown. Money was due from him to the Bank of Baroda and proceedings were initiated against him, in the wake of which he closed his business. But he denied that he met the plaintiff and requested not to take any legal action. He had, however, sought time to settle the account in which he did not involve the second defendant as surety. He had also riot executed any surety bond as alleged. He further contended that the suit was barred by limitation and prayed for its dismissal.
3. The second defendant also admitted that he had business at Abu Dhabi for some, time, but denied that he executed a guarantee bond in favour of the plaintiff. According to him, at the instance of some officers he went to the bank office and signed some printed forms under duress and coercion. He did not know what they were for, since they were not drawn in a language known to him and that fraud was played. It was also his case that the first defendant and the plaintiff had colluded as was obvious from their conduct. He further denied that he requested the plaintiff to refrain from taking any legal action against the first defendant and payment of Dh. 10,000 into his account as alleged. The alleged letter of guarantee did not cover the past liability of the first defendant to the plaintiff, which has no right to enforce it against him. The suit against him is unsustainable and also sought its dismissal.
4. On the contentions the following issues were raised :
"1. Whether the suit is not maintainable as the cause of action for the suit has arisen in a foreign country, where the provisions of the Civil Procedure Code--an Indian statute--are not applicable ?
2. Whether this court has got jurisdiction to entertain this suit ?
3. Is the plaintiff entitled to file this suit in its name as a hanking company in this court ?
4. Are the persons who signed the plaint competent to represent the plaintiff in this suit ?
5. Is the suit barred by limitation ?
6. Has the second defendant executed any guarantee letter in respect of the debt due from the first defendant to the plaintiff ?
7. Is the alleged guarantee letter by the second defendant obtained by the plaintiff under duress, coercion and fraud as alleged by the second defendant ?
8. Is the said guarantee letter binding on the second defendant ?
9. Has the second defendant by himself or jointly with the first defendant made any part payment towards the amount due to the plaintiff from the first defendant ?
10. Is the statement of account of the plaintiff true and correct ?
11. What is the actual amount due to the plaintiff ?
12. Is the plaintiff entitled to get interest at the rate claimed in the plaint ? If not, at what rate ?
13. Is the second defendant liable to pay any amount to the plaintiff ?
14. To what relief the plaintiff is entitled ?
15. What is the order as to costs of this suit ?"
5. PW-1 gave evidence on behalf of the plaintiff and exhibits A1 to 4 were marked. The defendants gave evidence as DWs-1 and 2.
6. Issues Nos. 1 to 5 were answered in favour of the plaintiff. On issues Nos. 10 and 11, it was held that the statement of accounts furnished by the plaintiff was true and that an amount of Rs. 6,65,138.89 was due as on November 27, 1980, towards the principal amount. On issues Nos. 6, 8 and 13, it was held that exhibit A-2 was unsupported by consideration, is void as regards "existing dues" and that the second defendant is not liable to pay any amount to the bank. Issues Nos. 7 and 9 were not answered on the ground that they were irrelevant, On issue No. 12, it was held that the plaintiff is entitled to interest at 17 per cent. per annum from November 27, 1980, till recovery. Issues Nos. 14 and 15 were answered in favour of the plaintiff, which was given a decree for an amount of Rs. 6,65,138.89 with interest at 17 per cent. from November 27, 1980, till recovery and cost against the first defendant. The suit against the second defendant was dismissed.
7. A. S. No. 273 of 1988 is against the dismissal of the claim against the second defendant. It is contended that the court below went wrong to hold that exhibit A-2 letter of guarantee did not relate to the existing liability of the first defendant, but only in regard to future advances to him by the plaintiff, a contention that the defendants themselves had not taken, that the finding on issues Nos. 7 and 9 are untenable and against the evidence and circumstances, that the court should have held that exhibit A-2 was executed by the defendants/respondents in respect of the plaint amount due from the first defendant under the overdraft account, that the findings in his favour are not legal and proper and that he should also have been made liable for the plaint claim along with the first defendant, his brother. In A. S. No. 332 of 1992, the appeal filed by the first defendant, he has taken exception to the correctness of the findings against him we shall have occasion to consider in the course of the judgment.
8. Heard.
9. The main points for decision are (i) whether the dismissal of the plaint claim against the second defendant/respondent in A. S. No. 273 of 1988 is legal and proper, and (ii) whether the decree as granted against the first defendant could be sustained.
10. The basic facts are not in controversy. The plaintiff is a banking company incorporated in Luxembourg, which had a branch at Abu Dhabi, in the U.A.E., where the defendants (we shall refer to the parties as arrayed in the suit) had their trading establishments. Even though the first defendant had in general terms taken exception to the findings on issues Nos. 1 to 4, no arguments were advanced to sustain the contentions, we hold were not justified. The court below has given valid reasons for the findings on those issues we have no hesitation to endorse. The plaint claim also could not be held as barred by limitation, it was said that the cause of action arose on April 12, 1980, when the first defendant undertook to settle the overdraft account and made part payments towards the liability, the last of which was made on September 21, 1980, as borne out by the statements of accounts, whose veracity had not been in serious challenge. The evidence of DW-1, the court below had considered, did not advance his case. The suit filed on September 1, 1983, within three years from the date of the last payment of Dh. 10,000 on September 21, 1980, was well within time as correctly held under issue No. 5.
11. The first defendant carried on business at Abu Dhabi in the name of Elite Stores, which was subsequently changed as Elite Super Market. He had transactions with the plaintiff since 1974 and enjoyed various credit facilities. The accounts were operated satisfactorily for some time. In April, 1980, the bank had to call upon him to clear the outstanding dues. The transactions are recorded in exhibit A-1, about whose veracity we have no reason to doubt at all in view of the acceptable evidence of PW-1. It contained an endorsement as required by Clause (8) of section 2 of the Bankers' Books Evidence Act, 1891, and was admissible in evidence to prove the entries therein, as the court below has rightly said. It showed that as on November 27, 1980, Dh. 240115.14 was due from him. As on September 21, 1980, what was due was Dh. 231020.82 and when this was put to him he said that he could not say what exactly was the amount due as per the accounts. Indeed he was unable to point out that any one entry in exhibit A-l was false. In our view, the court below was right to find on the oral and documentary evidence that Dh. 240115.14 the equivalent of Rs. 6,65,138.89 was due from him to the plaintiff bank as on November 27, 1980. He had no case that he made any payment towards the balance, the court below rightly found was due and granted a decree against him, we are unable to hold, suffered from any illegality.
12. The suit was laid against the defendants as principal debtor and surety respectively. But it was decreed only against the principal debtor, the first defendant. As already said the defendants are brothers, who had business in Abu Dhabi. The first defendant alone had transactions with the plaintiff bank, which wanted him to settle the outstanding dues, since it was noticed that his business went red and creditors were up against him for the claims due he could not settle. PW-1 also deposed that some post-dated cheques he had drawn on the Bank of Baroda, Abu Dhabi, bounced on account of insufficient funds in his account. Money was also due from him against various facilities he had been given and the bank filed a suit and got his properties attached. The plaintiff bank, therefore, had to tell him that legal action will be taken for recovery of the amount due, when he requested not to do so, promised to pay the amount and bring a guarantor for repayment to its satisfaction. As promised he brought his brother, the second defendant, and a witness and paid Dh. 10,000 in cash towards the outstanding balance. The bank was aware of the business activities of the second defendant and accepted his standing surety for his brother. It was further said that the second defendant executed a deed of guarantee, marked as exhibit A-2, whereby he bound himself to pay what was due from the first defendant. It was on this deed the plaintiff rested its claim against him.
13. The execution of exhibit A-2 was not denied by the second defendant, whose case, however, was that he did so without knowing its contents and under duress and coercion. He also denied that he went to the bank along with the first defendant and they together paid Dh. 10,000 in part payment of the liability. The amount covered by exhibit A-2 was substantially the same as due from the first defendant on September 21, 1980, as per exhibit A-1. The question for decision is whether exhibit A-2 was vitiated for the reasons stated by the second defendant. Having read his evidence as also of PW-1, we have no doubt that exhibit A-2 did not come into existence under coercion and duress as alleged. Indeed the bank had no reason to resort to the same, because he was not involved in any transactions with it, but only his brother, the first defendant, against whom the Bank of Baroda had already taken proceedings for recovery of the outstanding dues. It is equally unimaginable that the second defendant, who had independent business and was under no obligation to the plaintiff, would have succumbed to coercion and duress to execute exhibit A-2 for his brother, who had no common business interest to promote or protect. In our view, exhibit A-2 came about as alleged and was not bad or vitiated, which is only one aspect of the matter, not sufficient by itself to enable the plaintiff to get a decree against the second defendant. In our view, on its terms it is difficult to make him liable as a guarantor for the outstanding balance due as on September 21, 1980. The consideration for exhibit A-2 is as the recital itself showed the plaintiff making or continuing advances or otherwise giving or continuing credit or accommodation to Elite Super Market, formerly Elite Stores. The amount recoverable under the guarantee was not to exceed Dh. 28,100 exclusive of interest and charges. Obviously, the guarantee did not cover payment of the outstanding balance from the first defendant, but only such advances or credit or accommodation given subsequent thereto subject, however, to the maximum that had been stipulated. Indeed there is no evidence that on and after exhibit A-2 any advance was made to the first defendant that remained unpaid. "The cardinal rule is that the guarantor must not be made liable beyond the terms of his engagement." (see State of Maharashtra v. Dr. M. N. Kaul [1968] 38 Comp Cas 1, 4 ; AIR 19(57 SC 1634, 1636).
14. The consideration for the surety's promise has not to come from the principal debtor, but from the creditor. It need not directly benefit the surety although it may do so and it may consist wholly of some advantage given to or conferred on the principal debtor by the creditor at the surety's request. The consideration may take the form of forbearance by the creditor, at the surety's request, to sue the principal debtor or of the actual suspension of pending legal proceedings against him. The mere fact of forbearance is not, however, of itself a consideration for a person's becoming a surety for the payment of a debt. There must be either an undertaking to forbear, or an actual forbearance at the surety's express or implied request. An agreement to forbear for a reasonable time will provide sufficient consideration to support a surety's promise. About these aspects there is hardly any evidence, As we have already said, the first defendant had his assets attached and was involved in a suit with the Bank of Baroda. He had not then anything of his own to save that the second defendant should have come forward to stand surety. Exhibit A-2, in our view, should also fail for want of consideration. We are unable to accept the contention raised in ground 9 of the memorandum of appeal as to the applicability of illustration (c) to Section 127 of the Contract Act.
15. It was held in Ram Narain v. Lt. Col. Hari Singh, AIR 1964 Raj 76 that (headnote) :
"Guarantee is, in the nature of a collateral engagement to answer for the debt, default or miscarriage of another as distinguished from an original and direct engagement for the parties' own act. 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 creditor must have done something for the benefit of the principal debtor to sustain the validity of a contract of guarantee. Anything done or any promise made for the benefit of the principal debtor must be contemporaneous to the surety's contract of guarantee in order to constitute consideration therefor. A contract of guarantee executed afterwards without any consideration is void. The word 'done' in Section 127 is not indicative of the inference that past benefit to the principal debtor can be good consideration." (see also Paulo Varghese v. Ittipe Abraham, AIR 1952 Trav-Coch 202).
16. We hold on the evidence and circumstances as also on the terms of exhibit A-2, that the second defendant could not be made liable for the plaint claim that was decreed rightly only against the first defendant.
17. We affirm the impugned decree and dismiss the appeals without any order as to costs.