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PETITIONER: S. CHATTANATHA KARAYALAR

       Vs.

RESPONDENT: THE CENTRAL BANK OF INDIA AND OTHERS

DATE OF JUDGMENT: 09/03/1965

BENCH: RAMASWAMI, V. BENCH: RAMASWAMI, V. GAJENDRAGADKAR, P.B. (CJ) DAYAL, RAGHUBAR

CITATION:  1965 AIR 1856            1965 SCR  (3) 318

ACT: Promissory  Note,  Letter of  continuity  and  Hypothecation Agreement -Interpretation of -Liability  if as surety of co- obligant.

HEADNOTE: On the basis of a promissory note and a letter of continuity executed by the appellant and respondent Nos. 2 and 3 and  a hypothecation  agreement executed by the respondent  No.  2, the  respondent No. 1--bank opened on overdraft  account  in the  name  of  respondent 2. In  the  promissory  note,  the appellant  and  respondent  Nos. 2 and 3  had  "jointly  and severally promised to pay" the bank or order; in the  letter of  continuity sent along with promissory note to the  bank, the appellant, respondent Nos. 2 and 3 stated that "the said promissory  note is to be a surety to you for the  repayment of  the ultimate balance  or  sum  remaining unpaid  on  the overdraft’; and in the hypothecation agreement the bank  had agreed  to  open  a cash credit account at  the  request  of respondent  No.  2.  The  bank  filed  a  suit  against  the appellant and respondent Nos. 2 and 3    for recovery of the amount due on the overdraft. The appellant and respect No. 3 pleaded,  inter alia, that they had executed the  promissory note as a surety for respondent No. 2 and that they are  not co-obligants.  The  Trial  Court  held  the  appellant   and respondent  No.  3, were not merely sureties  but  were  co- obligants  and decreed the suit, which was affirmed  by  the High Court. In appeal by certificate; HELD: The finding of the High Court was not correct. [324 C- D].     Interpreting the language of the promissory note in  the context  of the letter and the hypothecation agreement,  the status of the appellant with regard to the overdraft account was that of a surety and not of co-obligant. [324 A]. If   the transaction is contained in more than one  document between the same parties., they must be read and interpreted together  and  they  have the same.  legal  effect  for  all purposes as if they are one document. [323 C]. Manks v. Whiteley, (1912) 1 Ch. 735, applied;     The provisions of Section 92 of the Evidence Act did not apply  in  the present case, because the appellant  was  not

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attempting  to  furnish evidence of any  oral  agreement  in derogation  of  the  promissory  note  but  relied  on   the existence  of a collateral agreement in writing  the  letter and  the hypethecation agreement, which formed parts of  the same transaction as the promissory note. [325 H]. Case law referred to.

JUDGMENT: CIVIL APPELLATE Jurisdiction: Civil Appeal No. 405 of 1964.     Appeal from the judgment and decree dated July 18,  1962 of the Kerala High Court in A.S. No. 561 of 1961.     S.T.  Desai, M.S.K. Sastri and M.S. Narasimhan  for  the appellant.     G.S. Pathak, B. Dutta, C. Chopra, J.B. Dadachanji,  O.C. Mathur and Ravinder Narain for Respondent No. 1. 319 The Judgment of the Court was delivered by     Ramaswami, J.  This appeal by certificate is brought  on behalf of the 3rd defendant against the judgment and’ decree of the High Court of Kerala dated July 18. 1962 in A.S.  No. 561  of 1961 which affirmed the judgment and decree  of  the Court  of the Subordinate Judge of Alleppey in O.S. No.  114 of 1957.     By a resolution Ex. BD dated November 25, 1946 the Board of  Directors of  the 1st defendant Company  authorised  the 2nd  defendant  to obtain financial accommodation  from  the plaintiffbank to the extent of Rs. 15 lakhs under  different kinds  of loans. Pursuant to this resolution the Company  by its  letter  Ex.  DE  dated  November  26,  1946  asked  for accommodation for Rs. 1 lakh under clean overdraft, for  Rs. 4  lakhs  under  open loan and for Rs. 10  lakhs  under  out agency  and  key loans. On November 26. 1946 all  the  three defendants  executed a promissory note, Ex. B in  favour  of ’the plaintiff-bank for a sum of Rs. 4 lakhs. The promissory note   was  sent  to  the  plaintiff’s-bank  along  with   a letter--Ex. A styled letter of continuity dated November 26, 1946. Ex. A reads as  follows: "Alleppey. 26th November, 1946. The Agent. The Central Bank of India Limited, Alleppey. Dear Sir.       We   beg  to  enclose an on  demand   promote  p.  Rs. 4,00,000 (Rupees Four lacs only) signed by us which is given to you as security for the repayment of any overdraft  which is  at  present  outstanding in our name and  also  for  the repayment  of  any overdraft to the extent of  Rs.  4,00,000 (Rupees four lacs only) which we may avail of hereafter  and the  said  Pro-Note  is  to be a security  to  you  for  the repayment of the ultimate balance of sum remaining unpaid on the  overdraft and we are to remain liable to  the  Pro-Note notwithstanding  the  fact that by payments  made  into  the account of the overdraft from time to time the overdraft may from  time to time be reduced or extinguished or  even  that the balance of the said accounts may be at credit.                                           Yours faithfully,       for CASHEW Products Corporation Ltd. For General Agencies Ltd. (Respondent 2)   Sd/- P.S. George                   Sd/- P.S. George   (Respondent 3)                   Managing Director,                                      Managing Agents.   Sd/- S. Chattanatha Karayalar            ,,         (Appellant).   Exhibit B states:

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 "Br. Rs. 4.00.000                              Alleppy, 26th November 1946. 320       On Demand we, the Cashew Products Corporation Ltd., S. Chattanatha Karayalar and P.S. George jointly and  severally promise  to pay The Central Bank of India Limited  or  order the sum of British Rs. Four Lacs only together with interest on such sum from this date at the rate of Two per cent  over the  Reserve Bank of India rate with a minimum of  Five  per cent per annum with quarterly rests for value received.  For Cahew Products  Corporation Ltd.  For General Agencies Ltd.  Sd/- P.S. George (Respondent 2)  Managing Director, Sd/-P. S. George (Respondent No. 3).   Sd/- S. Chattanatha Karayalar              "   (Appellant).     On the same day, defendant No. 1 as "Borrower"  executed in   favour  of  the  plaintiff-bank  Ex.  G,  a   deed   of hypothecation of its stocks of goods for securing the Demand Cash credit. Ex. G is to the following effect:         "Hypothecation of goods to secure a Demand cash Credit. NO. Amount No. 4,00,000.   Name.  The Cashew Products Corporation, Limited, Quilon.       The Central Bank of India, Limited (hereinafter called ’the  Bank’)  having at the request of the  Cashew  Products Corporation   Ltd.,   Quilon,   (hereinafter   called   ’the Borrowers’ opened or agreed to open in the Books of the Bank ,at Alleppey a Cash Credit account to the extent of Rs. Four lacs only with the Borrowers to remain in force until closed by  the Bank and to be secured by goods to  be  hypothecated with  the Bank it is hereby agreed between the Bank and  the Borrowers (the Borrowers agreeing jointly and severally)  as follows:--       14. The Borrowers agree to accept as conclusive  proof of the correctness of any sum claimed to be due from them to the  Bank under this agreement a statement .of account  made out  from the books of the Banks of the Bank and  signed  by the Accountant or other duly authorised officer of the  Bank without  the  production of any other voucher,  document  or paper. 321        15.  That this Agreement is to operate as a  security for  the balance from time to time due to the Bank and  also for  the ultimate balance to become due to on the said  Cash Credit Account and the said account is not to be  considered to  be  closed  for the purpose of  this  security  and  the security  of  hypothecated  goods is not  to  be  considered exhausted  by reason of the said Cash Credit  Account  being brought to credit at any time or from time to time or of its being  drawn  upon  to the full extent of said  sum  of  Rs. 4,00,000 if afterwards reopened by a payment to credit.        In  witness  whereof the Borrowers have  hereto  set, their hands this Twenty sixth day of November the  Christian Year one thousand nine hundred and fortysix. For Cashew Products Corporation Ltd., For General Agencies Ltd; Sd/- Managing Director, Managing Agents Sd/-       Schedule  of  goods  referred  to  in  the   foregoing instrument,  Stocks  of  cashewnuts,  cashew  kernels,   tin

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plates, Hoop Iron and other packing materials stored and  or to  be stored in the factories at Kochuplamood,  Chathanoor, Ithikara,  Kythakuzhi, Paripa11i, Palayamkunnu and  anyother factories  in which we may be storing from time to time  and at Cochin awaiting shipment. For Cashew Products Corporation Ltd; For General Agencies Ltd;             Sd/- Managing Director, Managing Agents."     On  the  basis  of those  documents  the  plaintiff-bank opened an overdraft account in the name of defendant No.  1. On  December 21, 1949, the three documents--Ex. A. B  and  G were  renewed  in  identical terms by Exs. C, D  and  F.  On January I, 1950 a sum of Rs. 3,24,645/12/2 became due to the plaintiff-bank and on that date a demand notice-Ex. ’0’  was sent  by the plaintiff-bank for repayment of the  amount.  A second’  notice---Ex.  L was sent by the  plaintiff-bank  on April  26,  1950.  On September 8.  1950  the  plaintiffbank brought a suit for the recovery of Rs. 2,86,292/11/11 from 322 all the three defendants. The suit was contested by all  the defendants.  The  case of defendant No. 1 was  that  it  had sustained  loss on account of sudden termination  of  credit facilities  by  the plaintiff-bank and the  amount  of  loss sustained  should  be  set  off against  the  claim  of  the plaintiff-bank.  Defendants Nos. 2 and 3 pleaded  that  they had  executed the promissory notes only as a surety for  the 1st  defendant  and that they are not co-obligants.  It  was further alleged that the plaintiff-bank had granted loan  to the  1st defendant in other forms such as Out  Agency  loans against goods which were security for the open loan. It  was said  that  the plaintiff-bank had made adjustments  in  the open  loan  account and in the clean over-draft  account  by debiting  and  correspondingly crediting in  other  accounts without  the consent of defendants 2 and 3.  The  plaintiff- bank had also allowed defendant No. 1 to over-draw freely in the  clean overdraft and open loan accounts far beyond’  the limits  agreed upon. It was alleged that the  plaintiff-bank had  converted secured loans into simple loans by  releasing goods covered by Bills of Lading against trust receipts  and had  thereby  deliberately frittered away  such  securities. They contended that they were discharged from obligation  as sureties to the contract for these reasons. Upon these rival contentions  the learned Subordinate Judge of Alleppey  took the  view that defendants 2 and 3 were not  merely  sureties but  they were co-obligants, because they had  executed  the promissory  notes--Exs. B & D. In view of this  finding  the learned  Subordinate JUdge considered it unnecessary  to  go into the question whether defendant No. 3 was absolved  from his liability "for all or any reasons set forth in para 5 of the  Consolidated’ Written Statement filed by him".  Against the  judgment  and  decree  of  learned  Subordinate  Judge, Alleppey  defendant  No. 3 presented an appeal in  the  High Court  of Kerala under A.S. 561 of 1961. Defendants 1 and  2 did’ not appeal. The appeal was dismissed by the High  Court of  Kerala on July 12, 1962. It was held by the  High  Court that defendant No. 3 was a co-obligant and not a surety.  On July 16, 1962 defendant No. 3 filed C.M.P. No. 5032 of  1962 praying  that the argument of the appellant with  regard  to his liability as co-obligant may be expressly dealt with  in the  judgment  of the High Court and  complaining  that  the appellant would be seriously prejudiced if the omission  was allowed to remain. Thereupon the learned Judges of the  High Court  wrote  a  supplementary judgment  on  July  18,  1962

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rejecting  the further arguments addressed on behalf of  the appellant.     The  first question presented for determination in  this case is whether the status of the 3rd defendant in regard to the transaction of overdraft account is that of a surety  or of  a co-obligant. It was argued by Mr. Desai on  behalf  of the  appellant  that  the High Court  has  misconstrued  the contents  of Exs. A and B in holding that the 3rd  defendant has  undertaken  the  liability as  a  co-obligant.  It  was submitted   that   there  was  an   integrated   transaction constituted  by  the  various documents---Exs. A,  B  and  G executed  between the parties on the same day and the  legal effect  of the documents was to confer on the 3rd  defendant the status of a surety and not of a  323 co-obligant.  In  our opinion, the argument put  forward  on behalf of the appellant is well-rounded and must be accepted as  correct. It is true that in the promissory  note--Ex.  B all  the  three  defendants  have  "jointly  and   severally promised  to pay the Central Bank of India Ltd. or  order  a sum  of Rs. 4 lakhs only together with interest on such  sum from this date", but the transaction between the parties  is contained not merely in the promissory note--Ex. B--but also in  the letter of continuity dated November 26, 1946--Ex.  A which was sent by the defendants to the plaintiff-bank along with  promissory  note--Ex.  B on the same  date.  There  is another document executed by defendant No. 1 on November 26, 1946---Ex. G-Hypothecation agreement. The principle is well- established  that  if the transaction is contained  in  more than one document between the same parties they must be read and interpreted together and they have the same legal effect for  all purposes as if they are one document. In  Manks  v. Whiteley,(1) Moulton, L.J. stated:                    "Where  several  deeds form part  of  one               transaction and are contemporaneously executed               they  have  the same effect for  all  purposes               such  as are relevant to this case as if  they               were  one deed. Each is executed on the  faith               of  all the others being executed also and  is               intended  to  speak only as part  of  the  one               transaction,  and  if one is seeking  to  make               equities  apply  to the parties they  must  be               equities  arising out of the transaction as  a               whole."     It  should  be  noted  in  the  present  case  that  the promissory note--Ex. B--was enclosed by the defendants along with  the letter of continuity--Ex. A before sending  it  to the plaintiff-bank. In the letter-Ex. A it is clearly stated that  the promissory note Ex. B was given to the  plaintiff- bank "as security for the repayment of any overdraft to  the extent of Rs. 4,00,000". It is further stated in Ex. A  that "the said promissory note is to be a security to you for the repayment of the ultimate balance or sum remaining unpaid on the overdraft". In the hypothecation agreement--Ex. G it  is stated  that  the plaintiff-bank has agreed to open  a  cash Credit  account to the extent of Rs. 4 lakhs at the  request of  the Cashew Products Corporation Ltd., Quilon.  According to  para 15 of the hypothecation agreement it operates as  a security  for  the balance due to the plaintiffbank  on  the Cash Credit account. Para 12 of the hypothecation  agreement states that if the net sum realised be insufficient to cover the  balance  due  to the plaintiff-bank,  defendant  No.  1 should  pay  the balance of the account on production  of  a statement of account made out from the books of the bank  as provided in the 14th Clause. Under this Clause defendant No.

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1 agreed to accept as conclusive proof of the correctness of any sum claimed to be due from it to the bank a statement of account  made out from the books of the Bank and  signed  by the Accountant or other duly authorised officer [1912] 1 ch. 735. (N)3SCI--8 324 of the Bank without the production of any other document. if the  language of the promissory note---Ex. B is  interpreted in the context of Exs. A & G it is manifest that the  status of the 3rd defendant with regard to the transaction was that of  a  surety and not of a coobligant.  This  conclusion  is supported  by letters---Exs. AF dated November 27, 1947,  AM dated  December  17, 1947 in which the Chief  Agent  of  the plaintiff-bank   has  addressed  defendant  No.  3  as   the "guarantor".  There  are similar letters of  the  plaintiff- bank,  namely,  Exs. CE dated December 28,  1947,  CG  dated January  13,  .1948,  AS dated February 23,  1949,  V  dated October 21, 1949,dated’ December 16, 1949, IV dated  January 12, 1950 and ’O’ dated March 29, 1950 in which defendant No. 3  is  referred  to either as a  "guarantor"  or  as  having furnished  a guarantee for the loan. Our concluded  opinion, therefore,  is  that the status of the  3rd  defendant  with regard to the overdraft account was that of a surety and not co-obligant and the finding of the High Court on this  issue is not correct.     On  behalf of respondent No. 1 Mr. Pathak  stressed  the argument  that  there is no contract of  suretyship  in  the present  case m terms of s. 126 of the Contract Act and  the plaintiff-bank  is  not,  legally bound  to  treat  the  3rd defendant  merely in the character of a surety.  Mr.  Pathak relied upon the decision of the Madras High Court in Vyravan Chettiar  v. Official/Assignee of Madras(1) in which  it  is pointed  out  that  persons who are  jointly  and  severally liable on promissory notes are not sureties under s. 126  of the  Contract  Act, nor do such persons  occupy  a  position analogous to that of a surety strictly so called to  attract the provisions of s. 141 of the Contract Act. Reference  was made,  in this connection, to the decision of the  House  of Lords in Duncan Fox & Co. v. North & South Wales Bank(2)  in which Lord Selbourne, L.C. distinguished between three kinds of  cases;  (1)  those in which there  is  an  agreement  to constitute,  for  a  particular  purpose,  the  relation  of principal  and  surety,  to  which  agreement  the  creditor thereby  secured is a party; (2) those in which there  is  a similar agreement between the principal and surety only,  to which  the creditor, is a stranger, and (3) those in  which, without any such contract of suretyship, there is a  primary and  a  secondary liability of two persons for one  and  the same debt, the debt being as between the two that of one  of those  persons  only, and not equally of both, so  that  the other if he should be compelled to pay it, would be entitled to  reimbursement from the persons by whom (as  between  the two)  it ought to have been paid. It is pointed out  by  the learned Lord Chancellor that in all these kinds of cases the person  who  discharged the liability due to  the  creditor, would be entitled to the benefit of the security held by the creditor though a case of suretyship strictly speaking would fall only under class 1, as a contract guarantee is confined to agreements where the surety agrees with the creditor that he would discharge the liability of the principal (x) A.I.R. 1933 Mad.. 39. 325 debtor in case of his default. It is manifest that classes 2 and  3 are not cases of suretyship strictly so called.  Lord

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Selbourne  observed  that the case before him did  not  fall within the first or the second class but it fell within  the 3rd  class in which strictly speaking there was no  contract of  suretyship.  But the Lord Chancellor held in  that  case that even in the second and third class of cases the  surety has  some  right to be placed in the shoes of  the  creditor where  he  paid the amount. The argument of Mr.  Pathak  was that  the  position  in  Indian Law  is  different  and  the principles  relied upon by Lord Selbourne, L.C.   in  Duncan Fox  & Co. v. North & South Wales Bank(1) did not  apply  to the  present case. Mr. Pathak referred, in this  connection, to the illustration to s. 132 of the Contract Act in support of his argument. We consider that the legal proposition  for which Mr. Pathak is contending is correct, but the  argument has not much relevance in the present case. It is true  that s.  126 of the Contract Act requires that the creditor  must be  a  party to the contract of guarantee. It is  also  true that  under s. 132 of the Contract Act the creditor  is  not bound by any contract between the codebtors that one of them shall  be  liable  only on the default of  ’-he  other  even though the creditor may have been aware of the existence  of the  contract  between the two co-debtors.  In  the  present case, however, the legal position is different, because  the plaintiff-bank was a party to the contract of guarantee--Ex. A which is contemporaneous with the promissory note--Ex.  B. The  plaintiff-bank  was  also a party to  the  contract  of hypothecation  executed  by defendant No. 1 in which  it  is stated  that  the plaintiff-bank had agreed to open  a  Cash Credit  Account  to the extent of Rs. 4 lakhs in  favour  of defendant  No. 1. It is manifest, therefore, in the  present case that the requirements of s. 126 of the Contract Act are satisfied and defendant No. 3 has the status of a surety and not of a coobligant in the transaction of overdraft  account opened in the name of defendant No. 1 by the plaintiff-bank. On  behalf of respondent No. 1 Mr. Pathak also  referred  to the  decision in Venkata Krishnayya v.  Karnedan  Kothari(2) and  submitted that defendant No. 3 cannot be  permitted  to give evidence in regard to a collateral transaction in  view of  the  bar imposed by s. 92 of the Evidence  Act  and  his position  is  as  a co-obligant and that the  terms  of  the promissory note cannot be altered by any other  transaction. We  are  unable  to accept this  argument  as  correct.  The provisions of s. 92 of the Evidence Act do not apply in  the present case, because .defendant No. 3 is not attempting  to furnish evidence of any oral agreement in derogation of  the promissory note but relying on the existence of a collateral agreement  in  writing--Exs. A & G which form parts  of  the same transaction as the promissory note--Ex. B. The decision of  the Madras High Court in Venkata Krishnayya v.  Karnedan Kothari(2)  is, therefore, not applicable and Mr. Pathak  is not  able to make good his submission on this aspect of  the case. (1) [1881] 6 A.C.I. (2) A.I.R. 1935 Mad. 643. 326     It  was  also  contended  by Mr.  Pathak  on  behalf  of respondent  No. 1 that the suit is based on  the  promissory note--Ex. B against all the three defendants and not on  the overdraft account. We do not think there is any substance in this argument. In this connection Mr. Pathak took us through the  various clauses of the plaint but there is  no  mention about the promissory note dated December 21, 1949 except  in para  6  of  the plaint which  recites  that  the  defendant executed a promissory note "as security for the repayment of the  balance  outstanding  under  the  overdraft".  We   are

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satisfied,  on  examination of the language of  the  plaint, that the suit is based not upon the promissory note but upon the  balance  of the overdraft account in the books  of  the plaintiff-bank. In para 11 of the plaint the  plaintiff-bank asked’  for  a  decree against the  defendants  jointly  and severally  "for  the recovery of Rs. 2,85,292/11/11  as  per accounts  annexed".  In  the plaint it is  stated  that  the plaintiff  had given two notices to the defendants--Ex.  ’0’ dated January 1, 1950 and Ex. L dated April 26, 1950 but  in neither  of these notices has the plaintiff referred to  the promissory note executed by the defendants or that the  suit was  based’ upon the promissory note. On the  contrary,  the plaintiff-bank referred in Ex. ’0’ to the open loan accounts and asked the defendants to pay the amounts due to the  bank under these accounts. It is, therefore, not possible for  us to  accept  the contention of Mr. Pathak that  the  suit  is based  upon the promissory note and not upon the amount  due on  the  overdraft  account.  In  this  connection,  we  may incidentally refer to the fact that in its statement of  the case before this Court, respondent No. 1 has clearly  stated that  the  claim  on  the  overdraft  account  against   the appellant was valid "because the overdraft was treated as in favour  of all the defendants (appellant and  respondents  2 and 3 herein) and that respondent No. 2 was only  authorised to operate independently on that account and that the  limit under the overdraft was placed at the disposal of respondent No.  2 by an express authority given by all  the  defendants (the  appellant and respondents 2 and 3)". This  shows  that respondent  No.  1’s case is that the suit is  based  on  an overdraft, and since the overdraft was treated as in  favour of  all  the  defendants, the appellant is  liable  for  the balance due on it.     We  shall then consider the question  whether  defendant No.  3 is discharged of his liability as a surety by  reason of  the alleged conduct of the plaintiff-bank  in  violating the  terms  of  the  agreement--Ex.  G  or  by  the  alleged fraudulent  or  negligent conduct of the  plaintiff-bank  in other ways. It was submitted on behalf of the appellant that the  plaintiff-bank  had made adjustments in the  open  loan account  and  in the clean overdraft account  with  the  1st defendant by debiting and correspondingly crediting in other accounts  without  the  consent of  the  appellant.  It  was further alleged that the plaintiff-bank had granted loans to the  1st  defendant  against  goods  covered  by  open  loan agreement and that it had converted 327 secured  loans into simple loans by releasing goods  covered by  the  Bills  of Lading against  trust  receipts  and  had thereby  deliberately  frittered away such  securities.  The question at issue is a mixed question of law and fact and it is  unfortunate that the High Court has not  properly  dealt with this question or given a finding whether the  appellant would  be discharged from the liability as a surety for  the overdraft  account  because of the alleged  conduct  of  the plaintiff-bank.  We  consider it necessary  that  this  case should  go  back on remand to the High Court of  Kerala  for deciding the issue and to give proper relief to the parties. In this connection, it is necessary to point out that  after the  High Court delivered its judgment on July 12, 1962,  an application  was made by the learned Advocate appearing  for the appellant that some grounds which had been urged by  him before the High Court had not been considered by it The High Court,  therefore,  adopted the somewhat unusual  course  of delivering a supplemental judgment. Mr. Desai contends  that even  the supplemental judgment has failed to  consider  the

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appellant’s contention that he had been discharged by reason of  the fact that adjustments were made by respondent No.  1 indiscriminately in respect of its dealings in three or four different accounts with respondent No. 2 to the prejudice of the  appellant. We have broadly indicated the nature of  the contention raised by Mr. Desai.     Ordinarily. we do not permit parties to urge that points raised  on  their  behalf in the High  Court  had  not  been considered,  unless  it is established to  our  satisfaction that  the points in question had in fact been  urged  before the High Court and the High Court, through inadventence, has failed  to  consider them. In the present case. we  are  not prepared  to  take the view that the grievance made  by  Mr. Desai  is  not well-rounded. It does appear that  after  the first  judgment was delivered, .an application was  made  by the  learned Advocate who argued the appeal  himself  before the  High Court in which he set out his complaint that  some of the points which he had argued before the High Court  had not  been  considered  by it. That is  why  the  High  Court delivered  a  supplemental judgment. Aggrieved by  the  said judgment, the appellant filed an application for certificate before the High Court, and in this application again he  has taken  specific  grounds,  e.g., under  paragraph  6(k)  and paragraph  8 that even the supplemental judgment has  failed to consider some of the points urged by him. While  granting the certificate, the High Court has made no comment on these grounds.  It  is  to be regretted that  when  these  grounds appear  to have been urged before the High Court,  the  High Court  should  have  failed to deal with them  even  in  its supplemental judgment. That is the reason why we think it is necessary that the matter must go back to the High Court for disposal of the appeal in the light of this judgment.     Mr.  Pathak. no doubt, seriously contested the  validity of  Mr. Desai’s argument. He urged that the  adjustments  on which  Mr. Desai has rounded his claim for discharge do  not really support 328 his  case. We proposed to express no opinion on this  point. As we have just observed, the contention thus raised amounts to  a mixed question of fact and law and we do not think  it would be expedient for us to deal with it ourselves when the High Court has omitted to consider it.     For  these reasons we allow this appeal, set  aside  the judgment  and decree of the High Court of Kerala dated  July 18, 1962 in A.S. 561 of 1961 and order that the case  should go back for being reheard and redetermined by the High Court in  accordance with the observations made in  our  judgment. The parties will bear their own costs upto this stage. Appeal Allowed. 329