1. The petitioner has claimed a writ of mandamus commanding the Presiding Officer of the Debt Recovery Tribunal to decide M.A. No. 2/2005 on merits as per the direction given by the High Court in W.P. No. 9841/2009.
2. Learned counsel for the Bank points out that such appeal was decided on 25.11.2009. Copy of the order has been attached as Annexure-P/3.
3. The said order is disputed by the petitioner on the ground that the appeal is not decided on merits.
4. However, a perusal of the order shows that the appeal has been dismissed on the ground that the liability of guarantor is co-extensive with that of a principal debtor. We find that such is the settled principle of law. Reference may be made to a judgment of the Supreme Court reported as (2015) 7 SCC 337 (Central Bank of India v. C.L. Vimla), wherein it has been held as under:—
“13. We are of the opinion that the questions that need to be decided by us are regarding the liability of the guarantor under Section 128 of the Indian Contract Act, 1872. The legislature has succinctly stated that the liability of the guarantor is co-extensive with that of the principal debtor unless it is otherwise provided by the contract. This Court has decided on this question, time and again, in line with the intent of the legislature. In Ram Kishun v. State of U.P., (2012) 11 SCC 511, this Court has held that: (SCC p.518, para 10)
“10…….in view of the provisions of Section 128 of the Contract Act, 1872 (hereinafter called ‘the Contract Act’), the liability of the guarantor/surety is co-extensive with that of the debtor.”
(emphasis supplied)
The only exception to the nature of the liability of the guarantor is provided in the Section itself, which is only if it stated explicitly to be otherwise in the contract.
14. In Ram Kishun (supra), this Court has also stated that it is the prerogative of the creditor alone whether he would move against the principal debtor first or the surety to realize the loan amount. This Court observed: (SCC p.518, para 10)
“10……..Therefore, the creditor has a right to obtain a decree against the surety and the principal debtor. The surety has no right to restrain execution of the decree against him until the creditor has exhausted his remedy against the principal debtor for the reason that it is the business of the surety/guarantor to see whether the principal debtor has paid or not. The surety does not have a right to dictate terms to the creditor as to how he should make the recovery and pursue his remedies against the principal debtor at his instance.”
Thus, we are of the view that in the present case the guarantor cannot escape from her liability as a guarantor for the debt taken by the principal debtor. In the loan agreement, which is the contract before us, there is no clause which shows that the liability of the guarantor is not co-extensive with the principal debtor. Therefore Section 128 of the Contract Act will apply here without any exception.”
5. In view of the aforesaid judgment, we do not find that the order passed on 25.11.2009 in M.A. No. 2/2005 suffers from any illegality.
6. Petition is dismissed.