PADMANABHA KAKKOTHAYA Vs. KESHAVA DERINJITHAYA
HIGH COURT OF MADRAS
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GOVINDA MENON, J. -
(1.) BOTH these appeals arise out of O. S. No. 87 of 1945 on the file of the Court of the Subordinate Judge of South Kanara and, since the facts are interrelated, a common judgment would be sufficient to dispose of the contentions of the parties.
(2.) DEFENDANT 5 is the appellant in App. No. 33 of 1947 and defendants 1 to 4 are appellants in App. No. 624 of 1946. The plaintiff, Vishnu Kakkothaya, Rama Asra and defendant 5 together executed a promissory note for Rs. 9000 in favour of the Karnataka Bank in Mangalore and received the proceeds. Inter se it was arranged that out of the Rs. 9000 the plaintiff was to take Rs. 4000, Vishnu Kakkothaya Rs. 2000, Kama Asra Rs. 3000, and defendant 5 was only a guarantor or surety to the bank for the repayment of the sum of Rs. 9000 by all the three other executants of the promissory note. This is common ground and there is no dispute whatever that defendant 6 when he joined in the execution of the promissory note did ao only as a guarantor and not as any beneficiary who received any part of the proceeds of the promis -aory note. Since the money was not paid in time, the Karnataka Bank brought O. S. no. 4 of 1934 on 9 -1.1934 on the file of the lower Court for the recovery of the principal, interest and costs. To that suit all the executants of the promissory note were made party defendants, including the present defendant 5. Pending the disposal of the suit Rama Asra died. No steps were taken to bring on record his legal repre -aentatives in the suit, since the plaintiff did not take any action and the other defendants did not also request the Court to bring the legal representatives of the deceased Rama Asra. Therefore, the suit proceeded without any one representing Rama Asra's liability and a decree was passed against the defendants for the principal amount, interest and costs on 17 -7 -1934 evidenced by Ex. p -1. Consequently, the bank took out execution proceedings and during the course of the execution proceedings Viohnu Kakkothaya also died and his legal representatives who are present defendants 1 to 4 were brought on record in execution. In order to satisfy the decree, the plaintiff paid Ba. 12,748 -13.5 and defendants 1 to 4 jointly paid Rs. 2458 -8 -0. A sum of Rs. 461 belonging to defendant 5 was in deposit with the bank which amount was appro -priated by the bank towards the balance portion of the decree amount due to it; thereby the entire decree amount was satisfied.
Thereafter, the plaintiff brought the suit oat of which the above appeals have arisen for contribution from defendants l to 4 forming one group and defendant 5 another. So far as the plaintiff was concerned what was claimed was that his share of the total amount due to the bank would not come to Rs. 12478 but he has paid an excess amount of Rs. 5464 -0 -11 and this amount he wanted to recover from the defendants. The contention of defendants 1 to 4 was that since the bank did not implead any representatives of Rama Asra in the suit and since no steps were taken to realise moneys due from Rama Asra. defendants 1 to 4 are not liable to pay any portion of the due share of Rama Asra. On the other hand, defendant 5 contended that being only a surety or guarantor as between the principal debtors and himself inter se he was not bound to pay any sum whatever. The learned Subordinate Judge disagreed with the contentions raised by defendant 5 and found that defendant 5 would be liable to pay Rs. 1740 -15 -1 by way of contribution. The reason assigned by the learned Judge was that the fact that defendant 5 was not one of the principal borrowers would not be enough to exclude him from the liability. As a joint executant of the promissory note, he was as much responsible for the payment of the debt as the other executants and since the plaintiff has baen made to pay more than his share of the liability the excess can be recovered from all the other debtors including defendant 5 in proportion of their liability by way of contribution. It is this finding of the learned Subordinate Judge that is attacked by defendant 5 in App. No. 33 of 1947.
(3.) WE are of opinion that the learned Subordinate Judge has not really appreciated the correct legal position. To the original promisee, namely, the Karnataka Bank the principal debtors as well as the surety or guarantor stand in the same footing, that is, the promisee is entitled to realise the entire sum due to him from all the executants of the promissory note or from any one of them individually. The fact that as between the promisors one of them is only a surety would not detract from the right of the promisee to collect the entire amount under the contract law from such surety. But the position is absolutely different as between the joint promisors. Where one of the joint promisors was only a surety, any of the other promisors cannot claim any contribution from him for the excess amount more than his share which hehad to pay to absolve himself from liability to the original promisee. If authority for this position is needed, we have it in the judgment of Wallace and Srinivasa Aiyangar JJ., report -ed in Arunachalam Sarvai v. Nottampeer Vavu Rowther, 27 M. L. W. 597 : A. I. R.1928 Mad. 538. At page 598 the learned Judges observe as follows : 'Thus if for instance one of the judgment -debtors should have had the decree passed against him merely because he was the guarantor of the debt which wasexclusively payable by the other judgment -debtor as the principal, then it follows that the implied obligation of the principal debtor under the contract of guarantee to keep the guarantor indemnified from any loss or damage would displace or be available to be set off against the other implication of indemnity.' This is direct authority for holding that since defendant 5 was only a guarantor or surety he is not liable to pay any contribution to the principal debtors themselves. Therefore, the learned Judges' view is unsupported by law and is erroneous. The appeal by defendant 5 is, there -fors, allowed, the decree against him will be set aside and the suit as against him dismissed. Defendant 5 will be entitled to get his costs in this Court from the plaintiff alone.;
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