K. Harilal, J.:— The petitioner is working as an Inspector in the Kerala State Road Transport Corporation (hereinafter referred to as the ‘KSRTC’ for short”), at Kottarakkara Depot. The petitioner stood as a surety to the loan availed by the fifth respondent from the Kerala State Transport Workers Co-operative Society (in short, society). Since the loanee had defaulted the repayment of loan dues, recovery proceedings were initiated against the loanee as well as the petitioner. The seventh respondent has been deducting Rs. 5,000/- to Rs. 10,000/- per month from the salary of the fifth respondent, who had availed the loan amount, so as to complete the loan recovery before May, 2016, in which month the fifth respondent is going to retire.
2. The fifth respondent had submitted that an undertaking to the fourth respondent society at the time of availing loan that dues if any can be recovered from his gratuity also. Hence the fourth respondent will get the entire loan arrear either from the salary recovery or from the gratuity of the fifth respondent. As per the instruction of the sixth respondent, the third respondent is effecting a recovery of Rs. 2,500/- from the salary of the petitioner, even though the loan dues are being recovered from the fifth respondent also. Thus the grievance of the petitioner is that the simultaneous recovery of amount from both the loanee as well as the surety is illegal and unsustainable. With this grievance this writ petition has been filed with a prayer to quash Ext.P3 and to direct the fourth respondent to refund the amount recovered from him.
3. The fourth respondent has filed a counter statement contending that the petitioner is a surety and had undertaken in the agreement that in case of default in remitting the instalments towards the loan amount by the fifth respondent, he shall pay the instalment and the fourth respondent is at liberty to realise the arrear from his salary. Ext.R4(H) which is the consent letter issued by the petitioner permitting the fourth respondent to realise the amount as stated above. It is also contended that under Section 128 of the Indian Contract Act, 1872, the liability of the surety is co-extensive with that of the principal debtor. In support of the above view, the fourth respondent has produced the judgment of this Court in W.P(C) No. 26861 of 2011 also.
4. Heard the learned counsel appearing for the petitioner and the learned standing counsel appearing for respondents 4 and 5. It stands undisputed that the petitioner is the surety to the loan transaction whereby the fifth respondent had availed a loan and the petitioner had issued Ext.R4(H) consent letter permitting the fourth respondent to realise the arrear from his salary, in case the fifth respondent defaults the payment of instalments towards the loan amount and now huge amount is due from the 5th respondent, who will retire in May, 2016 from the service. As rightly pointed out by the learned counsel for the fourth respondent, under Section 128 of the Indian Contract Act, 1872, the liability of the surety is co-extensive with that of the principal debtor and in Ext.R4(I) judgment, this Court had held that there is no merit in the contention that the bank should have proceeded against the principal debtor first before proceeding against the surety.
5. In the instant case it is the case of the petitioner that the fifth respondent is going to retire in May, 2016 and he had already agreed to realise the entire arrear from the gratuity due to him. In the above factual scenario, the fourth respondent will get an opportunity to realise the entire amount in lump sum from the terminal benefits of the fifth respondent. Therefore it is incumbent upon the fourth respondent to realise the entire arrear in lump sum from the terminal benefits to be disbursed to the fifth respondent and that the fourth respondent can proceed against the petitioner only for the balance amount. But, in the absence of any illegality at present, this Court is not inclined to interdict recovery from the petitioner's salary. It is made clear that the KSRTC is also liable to recover the entire dues from the fifth respondent if any requisition is made to that effect by the fourth respondent.
6. This writ petition is disposed of with the above direction.