2008 (11) TMI 738 - HC - Indian Laws

Summary

Issues Involved:
1. Selective Proceeding Against Judgment Debtors
2. Liability of Surety and Principal Debtor
3. Application of Sections 43 and 44 of the Indian Contract Act, 1872
4. Discharge of Surety u/s 135 of the Indian Contract Act, 1872
5. Procedural Lapses in Execution Proceedings

Summary:

1. Selective Proceeding Against Judgment Debtors:
The petitioner contested the execution petition (E.P. No. 129 of 2004) filed by the 1st respondent for his arrest, arguing that the 1st respondent selectively proceeded against him and two other sureties, leaving out the principal debtor and other sureties. The petitioner contended that the liability of sureties is co-extensive with that of the principal debtor, and the creditor must proceed against the principal debtor before enforcing the decree against the sureties.

2. Liability of Surety and Principal Debtor:
The court examined the liability of the surety, noting that the liability of a surety is co-extensive with that of the principal debtor u/s 128 of the Indian Contract Act, 1872. The court emphasized that the presence of the principal debtor in the proceedings is necessary to verify whether the debt can still be recovered from the principal debtor and to check if any steps taken by the creditor give rise to consequences u/s 135 of the Act.

3. Application of Sections 43 and 44 of the Indian Contract Act, 1872:
The court discussed the principles underlying Sections 43 and 44 of the Act, which deal with joint promisors. It clarified that these sections do not apply to sureties, as sureties are governed by a separate chapter in the Act. The court highlighted the distinction between joint promisors and sureties, noting that the discharge of one joint promisor does not discharge the others, whereas the discharge of a principal debtor can discharge the surety.

4. Discharge of Surety u/s 135 of the Indian Contract Act, 1872:
The court found that the 1st respondent had received payments from the principal debtor after the decree, which could be seen as giving time or agreeing not to sue the principal debtor, thereby attracting the consequences u/s 135 of the Act. This section provides that a surety is discharged if the creditor makes a composition with, gives time to, or agrees not to sue the principal debtor without the surety's consent.

5. Procedural Lapses in Execution Proceedings:
The court noted that the executing court did not follow the prescribed procedure under Order XXI of the Civil Procedure Code (C.P.C.) before ordering the detention of the petitioner. The court emphasized that none of the steps required under Order XXI, C.P.C., were followed, making the order for the petitioner's detention unsustainable in law.

Conclusion:
The civil revision petition was allowed, and the order under revision was set aside. The court held that the 1st respondent's selective proceeding against the petitioner was impermissible, and the procedural lapses in the execution proceedings rendered the order for the petitioner's detention invalid. There was no order as to costs.