1997 (9) TMI 643 - HC - Indian Laws

Summary

Issues:
Interpretation of liability of a surety under Section 128 of the Indian Contract Act in the absence of a decree against the principal debtor.

Analysis:
The judgment in question involves a revision petition filed by the judgment-debtor challenging an order made in an execution application. The suit was filed for recovery of a certain amount under a hire purchase agreement, with the second defendant acting as a guarantor. The first defendant passed away during the suit, and the second defendant was brought on record as a legal representative. The suit was decreed against the second defendant, directing payment to the plaintiff.

The petitioner contended that since there was no decree against the first defendant, who was the principal debtor, the decree against the second defendant, as a surety, was not valid. The petitioner relied on Section 128 of the Indian Contract Act, arguing that his liability was co-extensive with that of the principal debtor. However, the respondent argued that the decree was valid as it was against the second defendant as a legal representative of the first defendant, in addition to being a surety.

The court considered the submissions and referred to a Supreme Court judgment regarding the liability of a guarantor even in the absence of a decree against the principal debtor. It was emphasized that the liabilities of a principal debtor and a surety are distinct, even though they arise from the same transaction. The court noted that the second defendant did not challenge the decree earlier, and the decree was not solely against him as a surety but also as a legal representative of the first defendant. Hence, the court upheld the rejection of the execution application.

In conclusion, the court dismissed the civil revision petition based on the established principles of surety liability and the specific circumstances of the case. The court found that the decree against the second defendant, who was also the son of the first defendant, was valid and enforceable, leading to the dismissal of the petition without costs.