Collister, J.:— This is a plaintiff's appeal from a judgment of the Additional Civil Judge of Benares dated March 28, 1934.

2. The suit was for recovery of a sum of Rs. 18,206-4-0 on foot of a sarkhat which was executed by defendants Nos. 1 and 2 on November 28, 1929. These two defendants are Kalyan Das and Jumna Das. They are brothers and they were conducting a business in the name of Kalyan Das Bros, (defendant No. 3). Defendant No. 4 is also their brother. He is Mr. Ajodhiya Das and is a barrister practising at Gorakhpur. It appears that in November 1929 defendants Nos. 1 and 2 were in need of money and they approached the plaintiff's father for a loan. The latter agreed to advance a sum of Rs. 15,000 on condition that its repayment was guaranteed by Mr. Ajodhia Das. Mr. Ajodhia Das accepted this condition and on November 15, 1929 he sent the following letter to the plaintiff's father (p. 21 of Our book):—

Dear Sir,

In consideration to your please advancing to Messrs. Kalyan Das Bros, of Benares the sum of Rupees fifteen thousand only I hereby agree to hold myself, my executors and administrators responsible for the due payment of the same or any unpaid portion thereof together with interest and I undertake to pay you the amount which may become due to you under this guarantee after attempts have been made to realize the same from Messrs. Kalyan Das Bros.’ assets.

Ayodhya Das

3. On the strength of this letter of guarantee the plaintiff's father advanced to defendants Nos. 1 and 2 on November 28, 1929, a sum of Rs. 15,000 carrying interest at 12 an as per cent per mensem and payable on demand. As we have already said, this loan was evidenced by a sarkhat which defendants Nos. 1 and 2 executed. In this plaint the plaintiff prayed for a decree against the defendants first party (i.e, defendants No. 1 to 3) for recovery of Rs. 18,206-4-0 and further prayed

that a decree be also passed against defendant 2nd party (i.e, defendant No. 4) for the same amount, to be realised only in the event of the plaintiff failing to realise the amount from the defendants first party.

4. The suit was instituted on September 7, 1933, i.e, more than 3 years after the date of execution of the sarkhat. The plaintiff daimed that limitation was saved by reason of an acknowledgment of November 15, 1932 sent by Kalyan Das Bros, and by payments of interest on June 16, 1930, July 13, 1931 and August 15, 1931. It was further alleged by the plaintiff that in July 1932 he had given time to defendants Nos. 1 and 2 at the request of defendant No. 4, who assured the plaintiff that his guarantee would hold.

5. Defendants Nos. 1 to 3 did not put in an appearance and the suit proceeded ex parte as against them. Defendant No. 4 contested the suit, alleging (1) that the suit was barred by limitation and (2) that he was discharged of his liability by reason of the fact that the plaintiff had given time to the defendants first party without his consent or intervention.

6. The learned Judge found that the suit was within time as against the defendants first party and decreed the suit against them; but he dismissed the suit as against defendant No. 4 on the ground that no cause of action had as yet arisen against him and the suit was, therefore, premature so far as he was concerned. This, of course, was not the case of the defendant respondent who, as we have already shown, pleaded limitation.

7. Learned counsel for the plaintiff-appellant challenges this finding in respect to defendant No. 4 and pleads that the cause of action arose against him in 1932 or at the latest in 1933 when unsuccessful attempts—in the form of demands for payment—were made to realise the debt from defendants Nos. 1 and 2. Learned counsel for the defendant-respondent supports the decree of the court below, but on a ground other than that on which the suit was dismissed; he pleads that the suit ought to have been dismissed on the ground of limitation. There is also a cross-objection on behalf of defendant-respondent, but it is only pressed in respect to the matter of costs, since the other pleas which are embodied in it are not such as can properly be the subject of a cross-objection in this appeal.

8. It is a matter of admission before us that Rs. 675 were paid as interest on June 16, 1930, that Rs. 500 were similarly paid on July 13, 1931 and that Rs. 850 were similarly paid on August 15, 1931. It will thus be seen that interest was paid more or less regularly up to the month of August 1931; but thereafter no interest was paid and the plaintiff apparently became anxious about his money. He sent a letter to Mr. Ajodhiya Das in or about May 1932. That letter is not on the record but the reply of the defendant-respondent dated June 3, 1932 is printed at page 25 of our book. It reads as follows:—

My dear Radhe Babu,

Your letter to hand. I am sending it to Kalyan Das and am asking him to reply it direct. With love to children.

I remain,

Yours affectionately,

Ayodhya Das.

9. (The words “Yours affectionately” are explained by the fact that the defendant-respondent's wife and the plaintiff's aunt by marriage are sisters).

10. Soon afterwards the plaintiff's father died and in July 1932 the defendant respondent paid a visit of condolence to the plaintiff. It is alleged by the plaintiff that the following conversation took place. He says:

I asked Babu Ajodha Das at Benares to pay up the loan, as I was in need of money. Babu Ajodhya Das replied that Babu Kalyan Das was in financial troubles and the money could not be paid immediately and, if time was granted, then it would be paid gradually. I told Babu Ajodhya Das that if Babu Kalyan Das was in financial difficulties, the liability would be on him (Ajodhya Das) and he should pay it. Babu Ajodhya Das said that he also was not in a position to pay up the money, but if time was granted, then he would arrange to make the payments gradually in two years. I added that the period of limitation was expiring. Babu Ajodhya Das assured me that his letter of guarantee was with me and that he would be liable until the loan was repaid.

11. This is denied by the defendant-respondent. He says that when the plaintiff spoke to him about the debt,

I replied that my brother's business was down at present and I would write to him or speak to him to make arrangements for early payments of the amount due to the plaintiff and that the plaintiff should also write or speak to my brother to the same effect.

12. All this indicates that in July 1932 the plaintiff was becoming anxious about his money, having received no interest since August of 1931, and he was advised by the defendant-respondent to write to Kalyan Das and demand early payment.

13. Thereafter the plaintiff apparently wrote to Kalyan Das on August 23, 1932 and on September 2 Kalyan Das sent a reply (page 27 of our book) in the following terms:—

14. My dear Radhe Babu,

My compliments to you. I received your letter of August 23. I could not reply to you earlier as I was unwell. I hope you will excuse.

As regards the question of money, I am sorry that you have written in this manner. While I was at Benares, ‘Bhaiya’ told me that he had a talk with you on the subject and that you had agreed to give time. In face of it, I do not understand why you write like this, you are aware that my business has been at a stop since 1932 and it is impossible to arrange for money soon, as I am hard pressed. I hope that you shall give sufficient time in the terms of the conversation you had with ‘Bhaiya’.

There is nothing fresh. Hope you are well.

Dated 2nd September, 1932, afternoon.

Kalyan Das

15. This letter was filed by the plaintiff, who says that he received it from Kalyan Das and that it bears his signature; but as Kalyan Das was not called as a witness, it is argued by learned counsel for the defendant-respondent, and we think rightly, that this letter cannot be used as evidence against his client. This point, however, has little importance for reasons which will appear hereafter.

16. On November 15, 1932 Kalyan Das sent to the plaintiff a written acknowledgment of the debt; and it is argued on behalf of the plaintiff-appellant that it must have been inspired by an urgent demand from the plaintiff for payment of the loan and by a threat to institute proceedings. This might otherwise have seemed probable enough, but there is an admission by the plaintiff himself to the contrary. He says:

He (i.e, Kalyan Das) sent the acknowledgment to me not at my request, but of his own accord.

17. On August 15, 1933 a pleader named M. Bahadur Lal wrote to the defendant-respondent (p. 31 of our book) asking him to do what he could “to arrange matters and satisfy Radhe Babu………”

18. The writer also said in that letter, “Radhe Babu's sincere attempts at realisation have failed.”

19. On August 16, 1933 the defendant-respondent sent the following reply (p. 33 of our book):—

20. My dear Munshijee,

Your letter to hand. In this connection Radhe Babu saw me at Benares. I told him that I will try my best to get his money from Kalyan Das. I wrote to Kalyan Das and he has replied that no sooner his business improves he will pay. I have every hope that he will make some payment next year. I have had heavy payments made for Kalyan Das of which Radhe Babu is fully aware. In my old age and much reduced income I really cannot afford to pay any more for him. With all kind regards,

I remain your sincerely,

Ayodhia Das

21. It is argued on behalf of the plaintiff-appellant that the above correspondence shows that the plaintiff was making demands from defendants Nos. 1 and 2 for repayment of his loan. But as we have already said, the letter of Kalyan Das dated September 2, 1932 cannot be used as evidence against the defendant-respondent, and the letter written by M. Bahadur Lal amounts to nothing more than a statement of the plaintiff, who admits that M. Bahadur Lal was one of his counsels. And apart from this, there is a significant admission of the plaintiff which totally disproves the contention of learned counsel for the defendant-respondent that these letters evidence the fact of demands having been made for payment of the principal sum. At page 7 of our book he states in clear terms:

In the letter that I wrote to Kalyan Das, I did not say that Babu, Ajodhiya Das had asked for time from me. I had only said that no payment had been made since long in interest. I had demanded interest only and not principal.

22. Nor does he say that on any subsequent occasion he demanded payment of the principal.

23. It is thus clear that on the plaintiff's own showing there was no demand for payment of the principal from defendants first party; he contented himself with demanding payment of the interest that was due. And even if there had been a demand for payment of the principal sum, A. we are of opinion, for reasons which will appear later, that a mere demand for payment was not “an attempt to realise the debt from the assets of Kalyan Das Bros.” as contemplated in the letter of guarantee dated November 15, 1929. For reasons which we shall give hereafter, we think that some sort of proceeding and something more than a demand was envisaged by the parties.

24. In connection with this matter we must first deal with certain contentions of learned counsel for the defendant-respondent, who asks us to find that the suit was time-barred. He pleads that owing to the absence of a special contract to the contrary, which sought to be pleaded and proved, the cause of action against the defendant-respondent must be held to have arisen on the same date as against the principal debtors and that no such special contract was set up; on the contrary the cause of action against all the defendants was alleged in the plaint to have arisen on November 28, 1929, i.e, on the day on which the loan was advanced.

25. It is argued that the plaintiff should have alleged in his plaint that he had made attempts under the special contract and that the cause of action against defendant No. 4 arose on such and such a date, and he pleads that his client has been prejudiced by this omission. The first sentence of Paragraph 9 of the plaint alleges as follows:—

That the cause of action for the suit arose on November 28, 1929, when the money was advanced, and as by a letter, dated November 15, 1932, liability has been acknowledged with the consent of the defendant 2nd party, the suit is saved from being barred by limitation.

26. This allegation was, naturally enough, admitted by the defendant-respondent in his written statement. Paragraphs 4 and 7 of the plaint, however, were framed as follows:—

4. That in pursuance of this assurance defendant 2nd party executed a letter of guarantee on November 15, 1929, in favour of the plaintiff's father for a sum of Rs. 15,000, holding himself responsible for the due payment of the said sum together with interest and undertaking to pay the amount after attempts have been made to realise the same from Messrs. Kalyan Das Brothers' assets and remained unpaid. 7. That the defendant 1st party have closed their Benares office and are heavily indebted and the plaintiff does not expect to realise his dues from the defendants 1st party alone, but he has to attempt to realise his dues from the assets of Kalyan Das Brothers before he can proceed against the defendant 2nd party, who by his guarantee has agreed to pay the amount after attempts have been made to realise the same from defendant 1st party and is liable to the plaintiff for-the amount in suit in the event of the money being not realised from defendant 1st party; hence the plaintiff has impleaded defendant 2nd party.

27. It is clear that the plaint was clumsily and inartistically drafted, but we are satisfied that upon a fair and proper interpretation of the allegations and having due regard to the circumstances it must be held that what the plaintiff meant was that the cause of action generally arose on November 28, 1929, but that as regards defendant No. 4 under the terms of his letter of guarantee the plaintiff was not entitled to recover from him until he had first made an attempt to realise his debt from the assets of Kalyan Das Bros. The phrase “attempting to recover from the assets of Kalyan Das Bros.” must mean something more than a mere demand for payment and it is, we think, clear from the letter of guarantee that there was a special contract between the parties whereby it was agreed that the plaintiff should not be entitled to recover from the guarantor until he had first attempted and failed to obtain satisfaction by some sort of proceeding against Kalyan Das Bros.; and we are also of opinion that this special contract was in effect set up in the plaint, though its implications were either not understood or were perhaps ignored.

28. Having found that there was a special contract between the lender and the guarantor to the effect that the latter should not be liable until the plaintiff had made an attempt to realise the debt by proceeding against the assets of defendants first party, we have now to consider what are the implications of this finding and how it affects the question of limitation.

29. Section 128 of the Contract Act enacts that the liability of the surety is co-extensive with that of the principal debtor unless it is otherwise provided by the contract.

30. In the case of Brajendra Kishore Roy Chowdbury v. Hindustan Cooperative Insurance Society, Ltd.(1), an “on demand” promissory-note had been executed by the debtor and bore an endorsement on it “repayment guaranteed by me” signed by the person purporting to make the guarantee and unaccompanied by any writing restraining or postponing the right to sue. It was held by a Bench of the Calcutta High Court that limitation began to run in favour of the surety from the date of the promissory-note. At page 990, the learned Chief Justice observed:

31. In the case of a debt, as soon as the day of payment arrives, the default of the principal debtor is complete, and the surety, apart from special stipulation, is immediately liable to the full extent of his obligation without being entitled to notice, and the reason of the rule is, that it is the surety's duty to see that the principal pays his debt.

32. In Rowlatt's “Law of Principal and Surety”, (second edition,), the learned author at page 142 says

……as soon as a breach is committed of the duty performance of which is guaranteed, or in the case of a debt the day of payment arrives, the default of the principal is complete, and every surety is, apart from special stipulation, immediately liable to the full extent of his obligation, without being entitled to require either notice of the default, or previous recourse against the principal

33. At page 145 he observes:

34. The surety becomes liable to be sued when all the facts have occurred which show a default within the meaning of the guarantee, not when the fact of the default has been ascertained by litigation.

35. Further at page 148 we read:

36. A surety may, of course, by stipulation, make it a condition precedent that active steps be taken by the creditor. So where the surety was not to be liable “but on failure of the creditor's utmost efforts and legal proceeding” to obtain the money from the principal, it was held that the meaning was that the surety was not liable unless these measures were taken promptly, and not that the surety was liable whenever they had been taken.

In the case of Charu Chandra v. Faithful(2), a Bench of the High Court at Calcutta observed as follows:—

The liability of a surety does not necessarily in all cases arise simultaneously with that of the principal. It often happens that the remedy against the principal is barred when the liability of the surety arises. The question depends on the terms of the contract of guarantee for which the surety has bound himself.

37. The last case to which we will refer is from England. It is the case of Bradford Old Bank Limited v. Sutcliffe(3). The plaintiffs in that case in 1894 agreed to grant to a company a loan of £3600 and to allow an overdraft of £2500 on the company depositing debentures for £6100 and procuring a guarantee from two of its directors. The debentures were deposited and the directors gave a guarantee, (which was expressed as being given to protect the plaintiffs from loss on the realisation of the debentures) agreeing to pay to the plaintiffs on demand all sums owing by the company, the amount ultimately recoverable under the guarantee not to exceed £6100 with interest from the time of default of payment by the company or from the time of demanding payment by the plaintiffs from the guarantors. In 1912 the plaintiffs demanded payment from the company of the amounts owing and commenced an action to enforce the debentures, in which they realised a certain sum; and in 1915 they commenced an action on the guarantee for the balance due to them. It was held that no cause of action arose, against the sureties until demand had been made by the plaintiffs and no demand was made until 1912; and the suit against the sureties was therefore, not barred by limitation. At page 840, Pickford, L.J observed:

A cause of action accrues when all the facts exist which it is necessary to prove as a part of the case. If therefore it were necessary for the plaintiffs to prove a demand, the cause of action did not accrue till after the demand.

At page 843 Bankes, L.J remarked:

If demand before action is an essential part of any cause of action by the bank against the guarantors, then the statute could not commence to run until the necessary demand was made…… In my opinion the document, both from its nature and from its language, indicates that the guarantors stipulated for a demand being made upon them before the bank could enforce the guarantee against them.

38. In the case now before us we are satisfied that there was a contract between the plaintiff and the defendant-guarantor restraining or postponing the plaintiff's right to recover from the guarantor and such right would not accrue until the plaintiff had taken steps to recover the debt by proceeding against the assets of defendants first party. We express no opinion in this judgment as to what would be a reasonable period of time within which such steps should be taken or how the guarantors, liability might be affected by the lapse of an unreasonable period of time, before the taking of any steps. It is clear that up to the date of the suit no steps had been taken by the plaintiff to recover the debt from the assets of defendants first party, and we are, therefore, of opinion that on the aforesaid date no cause of action had come into existence as against the defendant-respondent.

39. An attempt was made by learned counsel for the defendant-respondent to argue that his client had been discharged of his liability by reason of die extension of time which had been given by the plaintiff to defendants Nos. 1 and 2; but we declined to hear learned counsel on this plea. Issue No. 2 reads as follows:—

“Does defendant No. 4 stand discharged of his liability?”

40. In dealing with this issue the learned Judge says:

The learned counsel for the surety gave a statement that he did not press this issue, though he added that he does not abandon it.

41. We find, however, the following statement in the English notes on the record dated March 12, 1934:—

Mr. C.C Das, Advocate for the defendant No. 4, states that he does not press issue No. 2.

42. This statement was made before the taking of evidence and it was quite unqualified. In the circumstances it is obvious that the point cannot now be taken in appeal.

43. There was some discussion before us as to which Article of the Limitation Act was applicable; but there is no necessity for us to record any finding on this point.

44. As regards the cross-objection, learned counsel for the defendant-respondent contends that the court below has erred in directing that the defendant-respondent shall bear his own costs. It might be possible for a court to take this view, but it must be borne in mind that the suit has been dismissed against the defendant-respondent on a ground totally different from that on which he rested his defence. He pleaded that the suit was time-barred, but the lower court finds that it was premature. The awarding or withholding of costs is after all a matter of discretion and on the whole we find no sufficient ground for interfering with the discretion which the learned Judge has exercised in this matter. For the reasons given in our judgment we dismiss the appeal and also the cross-objection with costs.

45. Appeal dismissed.