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Budh Singh Vs. Mukund Murari Lal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 183 of 1966
Judge
Reported inAIR1975All201
ActsContract Act, 1872 - Sections 128
AppellantBudh Singh
RespondentMukund Murari Lal
Appellant AdvocateS. Sadiq Ali, Adv.
Respondent AdvocateO.P. Agarwala, Adv.
DispositionAppeal dismissed
Excerpt:
.....debtor - held, decree holder is entitled to recover the money from the surety when the judgment debtor fails to pay decree amount. - - 250 in case the judgment-debtor failed to pay. dori judgment-debtor failed to pay, whereupon the respondent started execution against the appellant on the basis of the surety bonds. ajodhiya das, 1937 all lj 1265. the facts of that case are distinguishable and, therefore, it is not an authority applicable to a case like the present case. on the other hand the only condition stipulated in the instant surety bonds was that the guarantor will pay on failure of the principal debtor to pay......order of attachment of certain movable property belonging to dori. the appellant had executed two surety bonds. in the surety bonds he had undertaken to pay the judgment-debtor's liability to the extent of rs. 250 in case the judgment-debtor failed to pay. dori judgment-debtor failed to pay, whereupon the respondent started execution against the appellant on the basis of the surety bonds. this was resisted on a number of grounds, one of which was that the respondent not having taken any steps by execution for realisation of the decretal amount against the principal debtor and not having exhausted his remedy against him the execution was not maintainable against the surety. this ground was rejected by the lower appellate court and, therefore, this appeal. the only point urged by sri.....
Judgment:

O.P. Trivedi, J.

1. This is an execution second appeal by Sardar Budh Singh. Tt appears that the appellant stood surety for one Dori against whom the respondent had secured an order of attachment of certain movable property belonging to Dori. The appellant had executed two surety bonds. In the surety bonds he had undertaken to pay the judgment-debtor's liability to the extent of Rs. 250 in case the judgment-debtor failed to pay. Dori judgment-debtor failed to pay, whereupon the respondent started execution against the appellant on the basis of the surety bonds. This was resisted on a number of grounds, one of which was that the respondent not having taken any steps by execution for realisation of the decretal amount against the principal debtor and not having exhausted his remedy against him the execution was not maintainable against the surety. This ground was rejected by the lower appellate court and, therefore, this appeal. The only point urged by Sri Sadiq Ali, learned counsel for the appellant, is that the surety is not liable for payment of the amount under the guarantee until the decree-holder had not made an effort to realise the decretal amount from the principal debtor and had not exhausted his remedy against him. This argument cannot be sustained in view of the observations of the Supreme Court in the case of the Bank of Bihar Ltd. v. Dr. Damo-dar Prasad, AIR 1969 SC 297. Their Lordships observed in this (case) as follows :

'Under Section 128, save as provided in the contract, the liability of the surety is co-extensive with that of the principal debtor. The surety thus becomes liable to pay the entire amount. His liability is immediate. It is not deferred until the creditor exhausts his remedies against the principal debtor. In the absence of some special equity the surety has no right to restrain an action against him by the creditor on the ground that the principal is solvent or that the creditor may have relief against principal in some other proceedings. Likewise where the creditor has obtained a decree against the surety and the principal, the surety has no right to restrain execution against him until the creditor has exhausted his remedies against the principal.'

In this decision their Lordships referred with approval to observations of Lord Eldon in Wright v. Simpson, (1802) 31 ER 1272 : 'But the surety is a guarantee, and it is his business to see whether the principal pays, and not that of creditor' and they also cited with approval the observations of Melvill, J. of the Bombay High Court in the case of Lachhman Joharimal v. Bapu Khandu, (1869) 6 Bom HCR 241. It was observed in this case that 'the court is of opinion that a creditor is not bound to exhaust his remedy against the principal debtor before suing the surety and that when a decree is obtained against a surety, it may be enforced in the same manner as a decree for any other debt.'

2. Learned counsel in his arguments relied upon an authority of this Court in Radha Krishna Das v. Ajodhiya Das, 1937 All LJ 1265. The facts of that case are distinguishable and, therefore, it is not an authority applicable to a case like the present case. In that case there was a contract between the plaintiff and the defendant guarantor restraining or postponing the plaintiff's right to recover from the guarantor until the plaintiff had taken steps to recover the debt by proceeding against the assets of the principal debtors. No steps had been taken by the plaintiff upto the date of the suit, to recover the debt from the assets of the principal debtors and, therefore, it was held that the suit was premature as no cause of action had come into existence on the date of suit as against the guarantor. In the surety bonds which were executed by the appellant in the instant case there was no clause to the effect that the plaintiff's right to recover from the appellant will remain postponed until the respondent took steps to recover the debt by proceeding against the assets of the principal debtor. On the other hand the only condition stipulated in the instant surety bonds was that the guarantor will pay on failure of the principal debtor to pay. The principal debtor had not made any payment by the time the execution was taken out against the appellant. Therefore, the condition of the bonds was fulfilled. It being the duty of the surety to see that the principal debtor pays the debt, the appellant cannot successfully resist execution on the ground that the creditor has not taken any steps through execution for realizing the debt from the principal debtor. As this is the only point taken in this appeal, I find that there is no force in this appeal, which is dismissed with costs.


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