1989 (11) TMI 331

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....J. 1. Second defendant is the appellant. His contention is that he has not signed Ext. A-1 agreement as a guarantor and so he is not liable for any amount due to the plaintiff from the first defendant. It is the case of the plaintiff that the terms of the agreement were reduced to writing and a draft of the agreement to be executed by the 'defendants was drawn up and approved by both partie....

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....he second defendant guaranteed the due performance of the contract by the first defendant. Second defendant's involvement in the transaction is really established by the fact that the amount due to from the plaintiff (Rs. 832.54) was adjusted towards Ext. A-1 transaction. He made no protest about it. Besides, there is also evidence that the second defendant was instrumental in supplying firewo....

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....ing to the conclusion that he guaranteed the due performance of the contract by the principal debtor. When a Court has to decide whether a person has really guaranteed the due performance of the contract by the principal debtor, all the circumstances concerning the transaction will have to be necessarily considered. Court cannot adopt a hyper technical attitude that the guarantor has not signed th....

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....g parties and in the backdrop of the contract, The Court has to consider all the surrounding circumstances and evidence to come to a finding when the guarantor refutes his legal liability. In Mathura Das v. Secretary of State AIR 1930 All. 848 and in Nandlal Chanandas v. Firm Kishinchand AIR 1937 Sindh 50 it was held that contract of guarantee can be created either by parol or by written instrumen....