M.Murali Krishna v. Margadarsi Chit Fund Ltd

Order

This Civil Revision Petition is directed against the order, dated 11-11-2009 in E.P.No.97 of 2009 in O.S.No.10 of 2007, whereunder the Executing Court directed attachment of salary of the petitioner-4th judgment-debtor in realization of the debt due under the decree in O.S.No.10 of 2007.

2. Heard learned counsel appearing on either side. Perused the record.

3. 1st respondent-decree-holder filed the suit in O.S.No.10 of 2007 against the respondents 2 to 4 for recovery of the amounts due. The 2nd respondent is stated to be the principal debtor and the respondents 3 and 4 are the sureties. The suit was decreed against all

the defendants i.e. the respondents 2 to 4 herein directing them to pay a sum of Rs.1,30,026/- with interest and costs. The decree imposes joint and several liability on all the judgment-debtors i.e., the respondents 2 to 4 and their liability is co-extensive. The 1st respondent-decree-holder filed E.P.No.97 of 2009 for realization of the decree debt while seeking attachment of salary of the judgment-debtors 2 to 4. It is stated by the learned counsel appearing for the decree- holder that the Execution Petition was not filed against the 1st judgment-debtor as she retired from service as a staff nurse and she is a pensioner, besides being the mother-in-law of the petitioner herein-4th judgment- debtor. The Executing Court directed attachment of salary of the judgment-debtors 2 and 3 and a warrant was issued. The 4th judgment-debtor, who is the petitioner herein, filed the present Civil Revision Petition seeking to assail the warrant of attachment of salary issued against him.

4. It is not disputed that the attachment of the salary was directed to be effected in due compliance with the provisions under Section 60 of the Code of Civil Procedure. The only objection raised by the petitioner- 4th judgment-debtor is that the decree-holder is not entitled to proceed against the other judgment-debtors, who are only sureties, without first proceeding against the principal debtor i.e. the 2nd respondent herein. It is to be noted that the decree is passed against all the defendants i.e. petitioner and the respondents 2 to 4 imposing a joint and several liability against all of them, which is co-extensive. The decree does not impose any fetters on the decree-holder to exhaust their remedies against any particular judgment-debtor at the first instance before proceeding against the other judgment- debtors. There is no embargo on the decree holder to proceed against any of the judgment-debtors of his choice to recover the decretal amount.

5. Section 128 of the Contract Act mandates that the liability of surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. It is not the case of the petiioner-4th judgment- debtor that there is any term in the contract, to the contrary, indicating that the creditor should proceed against the principal debtor initially before taking any steps against the other debtors-sureties for recovery of the amount due.

6. I n THE BANK OF BIHAR LIMITED v. Dr.DAMODAR PRASAD AND ANOTHER [1] the apex Court held that: “It is the duty of the surety to pay the decretal amount. On such payment he will be subrogated to the rights of the creditor under Section 140 of Indian Contract Act, and he may recover the amount from the principal. The very object of the guarantee is defeated if the creditor is asked to post pone his remedies against the surety. In the present case creditor is a banking company. A guarantee is a collateral security usually taken by a banker. The security will become useless if his rights against the surety can be so easily cut down”.

7. I n STATE BANK OF INDIA v. MESSRS. INDESPORT REGISTERED AND OTHERS [2] the apex Court held as follows: “Moreover, it is the right of the decree holder to proceed with it in a way he likes. Section 128 of the Indian Contract Act itself provides that “the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract”. If on principle a guarantor could be sued without even suing the principal debtor there is no reason, even if the decretal amount is covered by the mortgaged decree to the decree-holder to proceed against the mortgaged property first and then to proceed against the guarantor. In such a case, when the said decree had become final all pleas as to the rights which the guarantor had had to be taken during trial land not after the decree while execution is being levied”.

8. Following the above decisions of the apex Court, this Court in M.G.BROTHERS FINANCE LTD., YEMMIGANURU v. J.BADARINATH AND OTHERS[3] held that: “The two decisions relied on by the executing Court did not consider the effect of Sections 43 and 44 of the Act or the ratio in the decision of the Apex Court in M/s Indexport Registered’s case (supra), that the decree holder is entitled to proceed against the guarantor for execution of the decree in the first instance without proceeding against the principal debtor. When the law in force and the decree do not lay down any fetters on the right of the decree holder to proceed against any of the judgment- debtors for recovery of the amount due from any of the decree judgment-debtors of his choice, it is not for the Court to state what amount the decree holder should realize from which judgment-debtors under decree. It is for the decree holder to decide what amount he should recover from which judgment-debtor. Therefore, in my considered opinion, the executing Court was in error in dismissing the E.P. on the ground that the revision petitioner, who earlier had proceeded against the other judgment-debtors, has to proceed against them only but cannot proceed against the fourth respondent, because revision petitioner, as decree holder, has absolute right to proceed against any or all the judgment-debtors. No judgment- debtor has a right to say that he is not bound by the decree. His right is only to the other claim contribution judgment-debtors, if they happen to be co-sureties. If he happens to be a guarantor, his right is to proceed against the principal debtor for the recovery of the amount paid by him to the decree holder”.

9. In view of the principles laid down in the above decisions of the apex Court, the contention of the learned counsel for the petitioner-4th judgment debtor that the decree holder is not entitled to proceed against the other judgment-debtors before exhausting his remedies against the principal debtor is untenable.

10. In view of the principles laid down in the decision reported in M.VENKATARAMANAIAH v. M/S MARGADARSI CHIT FUND LTD., & ORS. [4] relied upon by the learned counsel for the petitioner-4th judgment debtor, wherein it was held that in the absence of any contract, to the contrary, the petitioner therein was liable to share the whole debt equally along with the other five sureties and there is no basis for the decree holder therein to proceed only against the petitioner for the entire amount, does not refer to the above decision of the apex Court 2nd cited supra.

11. The decision cited by the learned counsel for the petitioner in 3rd cited supra is not applicable to the facts of the present case. In the circumstances, it is held that the 1st respondent-decree-holder is entitled to proceed against any of the judgment-debtors, choosing any of the modes of execution permissible under law for realization of the amount due under the decree, especially when the decree imposes a joint and several liability on all the judgment debtors for the entire amount due thereunder and the liability of the principal debtor and the sureties being co-extensive. The apprehension of learned counsel the 4th judgment-debtor that by proceeding against petitioner and the judgment debtors-respondents 3 and 4 simultaneously, by seeking attachment of salaries the decree holder is likely to realize four times the amount due, is misconceived. The decree enables the decree holder recover the amount due thereunder, by proceeding against all or any of the judgment debtors, but does not enable the decree holder to realize any amount in excess of what is due under the decree.

12. In the circumstances, it is held that there are no merits in the Civil Revision Petition and the impugned order does not call for interference by this Court in exercise of the revisional jurisdiction as the same does not suffer from any illegality or irregularity.

13. In the result, Civil Revision Petition is dismissed. There shall be no order as to costs. _______________________ G.V.SEETHAPATHY, J 19th March, 2010. Tsy [1] 1969 SUPREME COURT 297 [2] AIR 1992 SUPREME COURT 1740 [3] 2007(1) ALD 451 [4] 2009(1) l.S.25