BAILMENT AND TRUST:  Ibrahim Khan v. Govt. of UP: It was held that trust property is not the same as bailment.

BAILMENT AND SALE:  United Breweries v. State of Andhra Pradesh: The assesse sold beer in bottles and crates. The dealers paid a deposit as security for the bottles and crate, which was returned to them when these were returned. Circulars were issued by the assesse to the dealers, stating that (i) bottles were not to be sold to the customers (ii) bottles could be returned to ensure the process of bottling beer could continue smoothly and supple maintained. Fresh supplies were made to the dealers only upon returning the empty bottles. Substantial part of the bottles were returned by the customers. It was held that neither the bottle nor the crates were sent to the customers on a „sale or return‟ basis. The transaction of the bottles and crates was not a sale, nor did it become a sale later when the company would transfer the profit and loss account as trading receipts, the amount representing the lapsed security deposits not collected by the dealers in time. The deposit represented liquidated damages for the loss of the bottle if it was not returned. Kalyani Breweries Ltd. v. State of West Bengal: In this case, the fact situation was slightly different. The transaction was held to be one of sale as the deposit was exactly equal to the cost of the bottle, and the supposed bailee (i.e. customer) was not aware of the terms of the bailment. Commissioner, Trade Tax v. The Cooperative: This case affirmed the decision in Kalyani Breweries. The judges in this case also considered the bottles to be sold. They relied on the trade practices of the bottling industry. Vis-à-vis taxing laws, the bottles were considered to be sold, not bailed.

BAILMENT AND LICENSE:  Ashby v. Tolhurst: Tolhurst owned a car park. Ashby paid 1/- to attendant after parking his car. He received a ticket for the same, locked his car and went away. The car was given to someone else. It was held that it was a licence only, where there was no change in possession. Therefore, there was no bailment, and thus no obligation on licensor.

BAILMENT IN CASE OF GOODS SEIZED:  State of Gujarat v. Memom Mahomed Haji: Vehicles and goods belonging to the respondent were seized pursuant to the powers under the Customs Act, but it was found that the seizure was unsustainable. In the meanwhile, the vehicles were sold as unclaimed property, and could not be returned to the owner. The government was held

She retained the key.M. Just because the mohuts worked under the direction of the hirers. It was held that such a relationship of bailment could exist in this case even without an enforceable contract. the state is bound to preserve it and return it to the owner in case the order of confiscation is not made final. Assent of the guest to a servant‟s assumption of custody of the guest‟s coat may be sufficient evidence of delivery. and in the meanwhile. and that they were not in the possession of the goldsmith. the retailer would get the price and the government. the legal effect is as if the master delivers the good to the consignee.E. as being in the position of a bailee. The hirer could not be held responsible for the loss of elephants or the loss of hire charges or for cost of searching for the missing elephants. DELIVERY OF GOODS:  Kaliaperumal Pillai v. After the meal. for whom the port trust is the agent. the customer discovered that his coat was gone. The goldsmith was not a bailee as he was not in possession of the goods. S. Ultzen v. and put them in a box which was left in the goldsmith‟s house. Ghasiram Agarwalla v. the money deposited by the retailer. He sued the restaurant for breach of bailment and succeeded because the court held there had been transfer of control of the coat. State: This was a case relating to criminal breach of trust. It was held that an agreement between a retailer and the government for distribution of food through a fair price shop satisfied the elements of bailment: (i) there was delivery of goods by the government to retailer (ii) the purpose was to enable the retailer to sell to the customers (iii) the contract was that when so sold. The mere fact of an order passed by a magistrate for the disposal of the seized article does not absolve the government of its liability as a bailee. without previously examining the bolts and fastenings of his carriage and during the journey . Sahib: When the master of a ship lends goods and leaves them in charge of the port trust. It was held that there was redelivery of the jewels to the lady. either to return the vehicles or the price thereof. liable. and so could constitute bailment. Property seized by customs officials belongs to the owner till final order of confiscation. the relationship would not be affected. These jewels were stolen one night. Bateman: Defendant took the plaintiff in his carriage gratuitously. the key remaining with the lady. Visalakshmi Achi: A lady employed a goldsmith for the purpose of melting old jewellery and making new jewels. Every evening. Liability of the port trust was held to be the same as that of a bailee    DUTIES OF A BAILOR:  Moffat v. she used to receive the half made jewels. Shipping v. Surendranath Koley v. G. Kali Kumar Sen: There is no bailment when elephants with mohuts are hired on a daily basis. Nicolls: A restaurant patron handed his coat to a waiter before he was led to his table.

They pledged a stock of foodgrains with the Bank. M/S Grains and Gunny Agencies: The defendants had opened a key cash credit account with the plaintiffs. Hence their appeal was dismissed. They has outstanding balance. when the train stopped at a railway station or any other place. and so he was not entitled to be indemnified by P. Implied warranty could not survive this breach of undertaking by D. It was held that the Bank did not take adequate care of the goods. The launch caught fire. The railways did not exercise enough care as could be expected reasonably. but no contractual obligation on P to maintain the crane thereafter. in this case. (Exemption of liability by bailee clause was discussed in this case. and contained not only vehicles but also combustibles like thinner and petrol. but not applied) Union of India v. Droitwich Construction Co. and so the bank asked them to liquidate the amount and furnish security. the liability of the railway for loss arose. who were both found liable. He sued P and D. Therefore. and suffered loss. Reed v. then. The hirer D undertook to put a competent man in charge to carry out the service. the bailor defendant was held liable. The failure to examine the vehicle was held not to be negligent sufficient to charge the owner. Hence. and obtained loans. 151.  an accident happened. The hirer‟s workman was injured when the crane‟s superstructure fell on him. There was a discrepancy found by the bank in the quality and quantity of the pledged stocks. they were held liable under Sec. It was held that there was an implied contract that the crane should be reasonably fit for the purpose for which it was hired. The implied warranty as to fitness was qualified by the undertaking given by D to put a competent man in charge and see that it was properly serviced. D claimed indemnity from P on the ground that P had been negligent in providing D with a defective crane. Ltd. If the protection force did not move out of the guard‟s van to keep an eye on the wagons. They were injured. Udho Ram and sons: The issue was whether the loss of goods by Udho Ram in transit from Calcutta to Delhi was due to the negligence of the Railways. They could exercise section 176 of ICA. He   . the fire-fighting equipment being out of order. who escorted the train. received a motor car for repairs and his garage building was partitioned by wooden partitions. Hadley v. The court held that there was an implied undertaking that the launch was as fit for the purpose for which it was hired as reasonable skill and care could make it. Calcutta Credit Corporation v. A garage owner.: P hired a crane to D with no obligation on D to maintain it. It was held that though there were railway protection police. it was not adequate to prevent theft. The defendants held that the banks as bailees were responsible for any deterioration of stocks. Prince Peter: Special degree of care is expected from carriers. This man neglected to do so. but they had allowed the pledged goods to lose value. Dean: The plaintiff hired a motor launch from the defendant. DUTIES OF A BAILEE:  Bank of India v. and the plaintiff was unable to extinguish it. motor cab drivers and the like.

Calcutta. Nelson: Can‟t find. Shaw and Co. as the loans were not specially assigned to the property and did not constitute disbursements in respect of that property. D was held liable to P in view of the absence of the ordinary care that a prudent man would have exercised in the circumstances. Jain and sons v. v. Symonds and sons: Accidental loss or destruction is no defence if it occurred while the bailee was wrongfully detaining the goods. and its action violated section 160. put a brooch with her coat and forgot to pick it up. It was held that the railways as a bailee could not be held responsible to the bailor if the goods were taken away and destroyed by the authority of law as exercised through valid and regular procedure. . especially when the owner himself did not insure the goods. The parcel did not reach Lahore. Maudlestan: A jeweller of Lahore dispatched jewellery by post to a Calcutta craftsman without getting the jewellery insured. the government decided to open both the seals in New Delhi. adulterated oil transported by the plaintiff by train was seized by the health authority and destroyed by court orders. v. RIGHT OF LIEN:   Jaddah v. Hence. One of D‟s assistants found it and placed it in a drawer over the weekend. Bourne and Hollingsworth: P. Boseck and Co.       allowed one of his employees to do the cooking in the place. Cameron: The case deals with care of an involuntary bailee. L&NW Railway Co. Orient Longman Ltd. v. as this was not evidence of want of care which an ordinary reasonable man would exercise over his own goods in similar circumstances. Ltd. v. Bombay Saw Mills Co. It was found missing on Monday. It was held that the government failed to perform its duty as a bailee under the contract of bailment. However. as a value payable parcel as per instructions. King Emperor: Can‟t find this case anywhere In re. Newman v. with a stipulation that they should be opened thirty years after his death at the respective places as desired by Moulana Azad. Can‟t find facts. It was held that B could not be held liable for the loss of jewellery merely because he failed to insure the parcel. New Delhi and the National Library. and was held liable as a bailee for damage to a motor car sent for repairs. Jayati Laila Kabir: A copy each of the completed text of a book composed by Professor Humayun Kabir on the basis of notes dictated by Moulana Abdul Kalam Azad was deposited under sealed covers in the National Archives. The craftsman also sent the repaired jewellery back without insurance. a customer in D‟s shop. he was held guilty of want of care and of negligence. Jaggilal Kamlapat Oil Mills v. Union of India: In this case. and are not entitled to any lien on the property of the company in their possession. : The secretaries and treasurers of a company who have made advances to the company and incurred expenses and made disbursements on behalf of the company in the conduct of its business are not factors.

the debt to B being largely unpaid. a mercantile agent and motor distributor. Two views: (1) It was assumed that van V1 was in possession of A on the date of the second pledge in May. There was. Therefore. had left for sale with A. B took it in good faith. in whose favour the bank guarantee was given. B handed her jewels to M to value and inform her as to what the value of the advance he could make on them.  . B demanded possession of the van in possession of A for display. Blundell Leigh v. as not even A intended to constitute a pledge by the dispatch of van v2 in June. the court held that there was no pledge in this case as well. therefore. DI. but one unnumbered van and one chassis were retained by A for display purposes. substitute van V2 for van V1 as the subject of pledge. A fraudulently sold the retained van (say V1) to C. pledged three new vans and six chassis with B. there was a fresh agreement of pledge between A and B covering four chassis and three vans. could attach the fixed deposit receipts in the hands of the bank as the amount under the fixed deposit belonged to the customer. Salem Motors: In March. B and D for conversion. the court held that there was no valid pledge as B intended to demand possession of the van left with A for display under the first pledge in March. When the endorsement of the bank manager on the reverse of the letter given by the customer in connection with the guarantee read that the fixed deposit receipts were given in connection with the bank guarantee only. Attenborough: The delivery preceded the pledge in this case. (Basically. Vijay Kumar v. M/S Jullundur Body Builders: The contract between the customer (judgement debtor) and the bank was to furnish a guarantee for a certain amount on the understanding that the bank will hold the fixed deposit receipts furnished by the customer as a security for the guarantee the bank gave on behalf of the customer. D pleaded that section 178 applied. it being agreed that M was to retain the jewels as security if he did not make any advance. Consequently. Two vans and six chassis were numbered in the letter of the pledge. (2) Assuming that van V1 was no longer in possession of A in May. the Court. the letter had to be read with the endorsement. A could not. but the court held that there was no valid pledge to him of van V2. The same day. banker‟s general lien cannot extend to special contracts). In April. P. PLEDGE: DELIVERY OF POSSESSION:  Appa Rao v. sold it to D. P sued A. In June. a pawnbroker. There was no evidence where the van sold to C was still in possession of A. The liability under the guarantee was discharged by the Court. The bank could not hold the deposit receipts in their hands for the general balance due to the customer‟s overdraft account. Further. M pledged them with A. his debt being unpaid. and two vans and five chassis were delivered to B. the debt still being unpaid. In May. and so read would constitute a contract contrary to the general lien of the bank. which prevented possession passing on to him. Subsequently. a mistake on part of pledgee as to the identity of the chattel pledged. and A fraudulently sent a new van (Say V2 not same as V1 which he had sold to C) to B. which the owner of the van. without the consent of B. where one van and one chassis were to be retained by A for display. and in due course.

some being for exhibition only. the right to possess movables and the machinery in the present case is vested in the Bank. The Additional Tahsildar took steps to attach the machinery and other moveables belonging to the Company and bring the same for public auction. the pledge was held to be valid. a sum of Rs. Two days later. The Payment of Wages Inspector has raised a demand of Rs.: A French company sent to ther London agents certain pictures. Binod Steel Ltd. were the jewels ever in M‟s possession. Pall Mall Deposit Co. therefore. against M/s. and no one could touch the pledged property until the claim of the Bank was satisfied. The ground on which the petitioner Bank objected to the recovery proceedings is that it is a secured creditor having obtained a pledge or mortgage of all the moveables belonging to the Company and the revenue authorities or any other creditor has no right to proceed against the machinery and other moveables of the Company without satisfying the claim and debt of the Bank. 178. Binod Steel: Binod Steel Ltd. nor. The Court of Appeal reversed this decision. sent some diamonds to a diamond broker in London. SEC.78 P. George Attenborough: The plaintiff a dealer in the diamonds at Amsterdam. the pledge was held to be invalid. the court saying that the principle applies to all goods in the custody of the mercantile agent whether for sale or not. It was not the ordinary course of business of a mercantile agent to ask a friend to pledge goods entrusted to him. who were the pawn brokers. Co. The friend pledged them with the defendants. The broker asked a friend of his to pledge the diamonds for him. recover the jewels from A without any tender of the amount still due to M. subsequently. De Gorter v. but the agent pledged them. At that stage the petitioner Bank objected to the recovery proceedings initiated by the Additional Tahsildar under the Land Revenue Code. 1975.765.WHO CAN PLEDGE?  Moody v. So. B could. Company had borrowed on mortgage of its machinery. 25. Binod Steel Limited Company towards the amount of wages due and payable by the Company to the workers for the month of March 1975. The Payment of Wages Inspector moved the Additional Tahsildar for recovery of money from M/s. 33 lacs on various debts from the Bank. The trial judge held that there was no valid pledge between B and M at the time of the contract to pledge. though it accompanied a gratuitous bailment. It was held that the debt due and payable to the petitionerBank had come into existence even prior to the incident of liability of the Company towards the workers. having recourse to the provisions of the Land Revenue Code. was also to constitute a goods delivery to create a pledge should M find he could advance a sum which B was willing to accept.but to pledge them for himself. In the owner‟s action against the defendant for the diamonds. Bank of India v. who advance 1000 pounds in good faith. The Company had closed its business on April 11. M agreed to lend B 500 pounds on the security of the jewels.  . holding that the original delivery.

but when the rogue offered a cheque Elsie said the deal was off. The rogue then pawned the ring at the defendant pawn brokers in the name of Mr. Firth and received £350. The plaintiff then realised that he was defrauded and has brought an action against Avery for conversion. When she returned she informed Elsie that the details checked out and the sisters agreed to let Mr. She wanted cash or no sale. who got in touch with Mr. On receiving the same.   WHO HAS THE BETTER RIGHT: THE RULE OF PRIORITY  Bank of Chitoor v.: A rogue purchased some items from the claimant's jewellers shop claiming to be Sir George Bullogh. The cheque was dishonoured and the car was sold on to Mr. Subsequently the pledgers sold the machinery. Hutchinson at the address given because they were not willing to offer a sale for payment by cheque from anyone else. The claimant brought an action based on unilateral mistake as to identity. 178-A  Phillip v. This case has received widespread criticism and has not been followed since. The defrauder sold the car to another student. He then disappeared without a trace. Hutchinson. Avery: The plaintiff sold a car to another person who represented himself as being a famous TV actor. The sisters brought an action to recover the car.SEC. he agreed to sell his car to him and was presented a cheque in return. Little. Where the parties transact face to face the law presumes they intend to deal with the person in front of them not the person they claim to be. Lewis as he needed the handbook for the car. The jewellers were unable to demonstrate that they would only have sold the ring to Sir George Bullogh Ingram v. since they formed the equipment of a running cinema. Held: The contract was not void for mistake. the cheque bounced on being presented. The plaintiff asked for identity as well. The court held that evidence showed that the plaintiff did not intend to enter into a contract with the TV actor in particular and hence that was a concluded contract. Lewis v. The bank allowed the property to remain with the pledgers (hypothecation). After bank came to know about the sale it filed sued the pledgor . Little: Two sisters Hilda and Elsie Ingram sold their car to a rogue calling himself Mr. Brooks Ltd. The rogue then gave them his full name and address and Hilda went to the post office. They agreed a price for cash. which was two minutes down the road. He gave the address of Sir George Bullogh and the jewellers checked the name matched the address in a directory. Narsimbulu: a cinema projector and accessories were pledged with a bank. He paid by cheque and persuaded the jewellers to allow him to take a ring immediately as he claimed it was his wife's birthday the following day. to check the details out. The Court of Appeal held that the sisters only intended to deal with Mr. court gave the decision in favour of Bank by . Hutchinson take the car. Held: The contract was void for mistake. But. The defendant continues to have title to the car.

v. and the financier neither gave information as to the latest position of instalments nor gave any notice before seizure of the vehicles by force. The suit before Sub Court. The balance amount due was not paid in spite of a registered notice and hence the suit. 179  Belsize Motor Supply Co.77 due from defendant under a key loan transaction.and an Instrument of pledge of goods was also executed on the same day. 12. 50. He contended that the key loan transaction was entered into at the time of closure of a gift scheme sponsored by the plaintiff bank known as "Grihalakshmy Gift Scheme" as part of plaintiff's deposit mobilisation scheme. Bank of Maharashtra v. 176)  Muthoot Leasing and Finance Ltd. under general welfare. v.000 for breach of contract by the financiar was upheld.000/. M/s Racmann Auto:  Duty to Repay  Dhanlakshmi Bank v. The washing machines pledged with the bank under Ext. KK Jose: Plaintiff in a suit for realisation of money is the appellant. Ernakulam was filed by plaintiff for realisation of an amount of Rs. but contended that he had not received any consideration for the promissory note and that the documents were executed at the instance of the bank officials.A2 did not belong to defendant and he had no responsibility of selling those machines and to discharge the amount covered by Ext. and subsequently sold that without giving notice to the Bank. State of Bihar: Police seized the goods of the pledgor which were put with the pledger as a pledge. Defendant disclaimed liability to pay any amount. Since plaintiff is not in a position to return the goods to the pawnee in the same condition in which they were entrusted to them at the time of pledge they have no right to sue . the fact that being all instalments had already been paid. the seizure was held to be illegal. 17. The order of the trial court awarding damages to the extent of Rs. final court verdict was in favour of bank by following the same principle. following the doctrine of Secured creditor where bank is always considered as an entity which has firsr right over pledge Bank of Bihar v. Cox: a pledge by a seller remaining in possession after sale and by a buyer obtaining possession before sale is valid. Sec. A promissory note was executed by defendant on 11-12-1978 for Rs. Defendant admitted the execution of the promissory note and the instrument of pledge. And money was appropriated by the govt.427. Vasudev Publicity Services: the purchase of the vehicles was financed. Held: The Supreme Court has held that if the pawnee is not in a position to redeliver the goods he cannot have both the payment of the debt and also the goods.A1. RIGHT TO SELL GOODS (SEC.

allowed. Parties shall bear their own costs. Impugned judgment of the National Commission is set aside and the complaint of the appellant is allowed. Leave was granted limited to the claim of the appellant to his shares of Castrol Limited pledged with the Bank. 1986 ('Act' for short).037. Gajanan Moreshwar v. Bank of India: This appeals is directed against the order dated June 21. Adamson v. Madan Mohan: the pawner has the right to take back with the goods the increase. 177)  MR Dhavan v. 223 of ICA 1872. In this case the pledge was that of certain shares of a company and during the period of the pledge the company issued bonus and rights shares. 5. Moreshwar Madan Mantri:   . 5. he‟ll indemnify the service station owner.09.09. Bank is granted four weeks time to make the payment of the amount so awarded. Bank shall be entitled to adjust the amount of award against any sum due to it from the appellant in any of his accounts with the Bank or any other account in which he has interest as a partner or otherwise.037. Held: The appeal is. that the goods have undergone during the period of pledge. The result is that defendant is absolved of all liabilities under Ext. Lovering: an indemnification bond was signed by the Truck owner to service station owner to cover loss if anyone comes to claim the trucks as true owner. if any. There shall be award of Rs. In case of default the appellant shall be entitled to further interest at the rate of 18% on Rs.1992 in favour of the appellant and against the respondent Bank of India.  Vimal Chandra Grover v. therefore.47 from the date of this judgment till payment. INDEMNITY  Dugdale v. He recovered indemnity from the principle because the act in question was apparently lawful under sec.on the debt whereas they can only retain the goods or whatever left of them. It was held that these increases belonged to the pawner. RIGHTS OF PAWNER (SEC.1996 of the National Consumer Disputes Redressal Commission (National Commission) holding that there was no negligence on the part of the respondent Bank in dealing with its security of pledged shares of the appellant or its release in part to him and that the Bank could also not be faulted on its practice not to dispose of shares through brokers not on the approved list of the Bank and lastly that it could not be said that there was any deficiency in service by the Bank as defined in Section 2(1)(g) of the Consumer Protection Act. A1 and the claim of plaintiff for return of the money has only to be negatived.47 with interest at the rate of 11% from August 1. Jarvis: an auctioneer sold the certain cattle on instructions from the defendant and was held liable to the true owner for conversion.

 BANK GUARANTEE:  Maharashtra Electricity Board. v. 130 AND 131)  Hargopal Aggarwal v. The Madras high court held that the liability of the surety had gone down accordingly. v. The liquidator sought to prevent the board from realising the guarantee and the bank from paying it. Windfield v. It was also established that the conduct and intention of the parties are also essential to declare a contract as continuing contract. The board demanded the payment. London Insurance Co. he was not held liable for rents which became due after the revocation. The board has the right to enforce the payments of the guarantee and the bank had the right to reimburse itself out of the securities. The supplier was the company which went into liquidation. The Official Liquidator. South gate sands: Surety asked for three co-sureties and they must be the directors of the company. no one could be held liable. The issue was that how many of the sureties be held liable. CONTRACT OF GUARANTEE Conditional Guarantee   Union of India v. M/s Sumac international: . High Court Ernakulam: A bank under took to pay to the SEB a sum not exceeding Rs. the court held that unless all three have signed guaranty voluntarily and freely. It was not considered as continuing guarantee.000 within 48 hours of demand. There was no condition to the bank‟s liabilities except the demand by the board. Bombay v. Preston: the main issue which was settled was that all insurance contracts except life insurance can be considered as contract of indemnity. UNCONDITIONAL GUARANTEE  UP state sugar corp. De St Croin: when a person guaranteed the payment of the rent by his servant and revoke the guarantee as soon as the servant left his employment. Continuing Guarantee  Kay v. 50. His sign was frged by the principal debtor. v. DISCHARGE OF SURETY BY REVOCATION AND DEATH (SEC. Groves: Five Sacks of flour has been delivered on a particular day. No such relief was allowed. Only two have signed whereas third has refused. The guarantee was submitted on behalf of the supplier who had deposited with the bank sufficient securities. Avinash Bhonsle: James Graham co. SBI: The overdraft of the company were guaranteed by the company‟s directors and the banker recovered a part of the loan by disposing of certain goods belonging to the company.

the surety has no right to restrain execution against him until the creditor has exhausted his remedies against the principal debtor. hence HC of Karnataka upheld the decision of the bank to withhold the payment. CIBC mortgages v. Bank of Bihar v. United Industrial Bank: It was held in this case that even before the payment of the debt by the guarantor to the creditor. In this case the wife stood surety for husband‟s debts.: bank found that that there was a pending arbitrationunder which the liability of all parties had to be ascertained.    . The court decided that he was entitled as against a subsequent assignee of the creditor. his consent was not free. Facts can‟t find. She received no independent advice. McManus: The right to contribution from a co-guarantor may depend on the solvency of the co-guarantor at the time the contribution is sought. The surety does not have the right to restrain any action against him by the creditor on the ground that the principal debtor is solvent or that the creditor may have some relief against the principal debtor in some other proceedings. Advance payment was made to the contractor for the purchaseof essential machinery on bank guarantee.    Kudremukh iron ore v. A surety may be described as vulnerable where there is a relationship of trust and confidence between him and debtor. The contractor tried to prevent it on the ground that the work assigned to him was impossible and that important facts were suppressed from him. SAIL sought encashment on account of the contractor‟s default. Barclays Bank v. Damodar Prasad: Where the creditor has obtained a decree against the surety. O’brien: the court may rescue the surety where he was prevailed upon and therefore. she agreed to give her property in mortgage. Karola rubber co. to a proportionate share in the security held by the creditor at the time that the surety discharged his liability. RIGHTS OF A SURETY:  Mamata Ghose v. DTH construction v. loss. The court freed her from liability either because of undue influence or misrepresentation. The court considered that any other view would enable the creditor to make an appropriation to the detriment of the surety who had already paid Mahoney v. Goverdhan Das v. The surety had guaranteed only a part of the debt. SAIL: the contract was for the dredging and deepening the reservoir. even though the creditor had still not been fully paid. by evoking the equitable doctrine of subrogation. Bank of Bengal: The security was given after the contract of suretyship. wife allowed to avoid because the finance company did not take care to see that she had independent advice. Pitt: wife told loan needed for buying holiday home. and the principal. can apply for temporary injunction for restraining the principal debtor from disposing off his personal properties till the disposal of the suit filed by the creditor. money spent by husband on investments in shares. These grounds were held to be not sufficient to prevent encashment. the guarantor. and he had discharged his part.

and only then against the surety for the balance. v.  Bank of Madura Ltd. there was no need to inform surety and as result surety was not discharged.  MS Anirudhan v.  Florence Mabel v. Official Asignee. Manku Narayana: It was held by the Supreme Court that the creditor must proceed against the mortgaged property first. mortgaged property and the guarantor.  Bombay Co. The business failed due to the bees contracting viral infection. the plea of the guarantor that the contract of guarantee is void on account of frustration of contract owing to the failure of the business of the principal debtor disabling to repay the loan is not tenable. for which the appellate guarantor agreed to be jointly and severally liable in case of default by the debtor. Chatar Singh: A statutory reduction or extinguishments of the principal debtor‟s liability would pro tanto reduce or extinguish the surety‟s liability. Madras: under sec. And hence it does not discharge the PD and surety of their Liabikities under the doctrine of “Successor in interest”.Narayan Singh v. Court held that as this was for the advantage of surety.000 by the PD. v. bank of Baroda: the contract of guarantee will not change when mergers and acquisitions take place because there is a takeover of liabilities also. Thomco Bank: there was a contract between PD and surety for providing guarantee to the loan of 25. Bank told to give only 20. State of Kerala: A loan was advanced by the respondent cooperative society for the purpose of bee keeping.  . Keshavlal: In this case Lord Atkin did not consider the concept of Advantage.disadvantage to the surety and hence always discharged the surety because he was not informed of changing the terms of contract. It was held that where the guarantor specifically agreed to be liable jointly and severally in the event of the failure on part of the principal debtor to pay off the loan instalments.000. 133. The question was that is surety discharged under sec. 135 when creditor compounds with the PD for increasing time limit and not to sue then surety will be discharged unless he gave his consent.  Pratap Singh v.000 and hence PD without informing surety changed the amount in contract of guarantee to 20. even if the decree is a composite one against the principal debtor.  Union Bank of India v.

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