Wilson and Ghose, JJ.
1. In this case the defendant became liable, according to the findings of both Courts, as surety for a person who took an ijara lease from the plaintiffs. The suit is now brought against the defendant. The first Court gave a decree in favour of the plaintiffs. The second Court has set aside that decree on the ground that the defendant is a surety, that the claim against the principal debtor has been allowed to become barred by limitation, and that, therefore, the claim against the present defendant cannot be sustained. The learned Judge in the Appellate Court says this in paragraph 22 and the following paragraphs of the judgment:
22.--As the plaintiff then has allowed the claim to become barred against the principal, he cannot recover from the surety.
23.--And the inevitable result must be that the suit should be dismissed.
24.--This Court then finds in his favour the point urged by appellant, that he cannot be held liable when the claim against his principal has become barred.
2. We are unable to agree in the view taken by the lower Appellate Court. The law on this subject is now embodied in Section 133 down to and inclusive of Section 139 of the Contract Act.
3. The earlier of those sections prescribes what acts on the part of a creditor, by way of releasing, or agreeing to give time, or other transaction with the principal debtor, shall have the effect of discharging the surety. Section 137 says this: 'Mere forbearance on the part of the creditor to sue the principal debtor or to enforce any other remedy against him does not, in the absence of any provision in the guarantee to the contrary, discharge the surety.' This is the section applicable to the present case. The law on the subject has been considered by the Bombay High Court in the case of Hajarimal v. Krishnarav I.L.R. 5 Bom. 647 and the view there taken is the same as that which we have expressed.
4. The decree, therefore, of the lower Appellate Court must be set aside. But as there are questions affecting the amount due to the plaintiffs raised both on the appeal presented to that Court and on the cross-appeal, the case must go back to the lower Appellate Court in order that that Court may determine the amount of the liability of the defendant.
5. The appellants will have the costs of this appeal. The costs in the lower Courts will abide the result of the suit.
Section 133: Any variance, made without the
Discharge of surety by surety's consent,in the terms of the conteract
variance in terms of between the principal and the creditor,
contract. discharge of surety as to transactions subsequent
to the variance.
Section 134: The surety is discharged by any
Discharge of surety by contract between the creditor, and the principal
release or discharge of debtor by which the principal debtor is released,
principal debtor. or by any act or omission of the creditor, the
Legal consequence of which is the discharge of
the principal debtor.
Discharge of surety when Section 135: A contract between the creditor
creditor compounds with, and the principal debtor, by which the creditor
gives time to, or agrees makes a composition with, or promises to give
not to sue principal time to, or not to sue, the principal debtor.
debtor. discharges the surety, unless the surety assents
to such contract.
Surety not discharged Section 136: Where a contract to give time to
when agreement made with the principal debtor is made by the creditor with
a third person to give a third person, and not with the prinicipal
time to principal debtor. debtor, the surety is not discharged,
Section 139: If the creditor does any act which
Discharge of surety by is inconsistent with the rights of the surety, or
creditor s act or omis omits to do any act which his duty to the surety
sionimpairing surety's requires him to do, and the eventual eventual
remedy, remedy of the surety himself against the
principal debtor is thereby impaired, the surety