Mootham, C.J. - (1.) The question which has been referred to this Bench is "Whether a surety is discharged when the creditor allows the execution of his decree against the principal debtor to be barred by limitation."
(2.) This Court has consistently taken the view that a surety is discharged when a creditor allows his remedy against the principal debtor to become baried under the law of limitation, but a different view has been taken by the other High Courts in India and by the former Chief Court of Oudh (see -- 'Hajarimal v. Krishnarav', 5 Bom 647 (A); --'Bireshwar Chatterji v. Saidpur Commercial Bank Ltd., 41 Cal WN 1361 (B); -- 'Subramania Aiyar v. Gopala Aiyar', 33 Mad 308 (C); -- 'Nur Din v. Allah Ditta', AIR 1932 Lah 419 (D); -- 'Jagdambika Pratap Narain Singh v. Tir Singh Bahadur Singh' 1941 Oudh WN 473 (E)) and in -- 'Mahant Singh v. U Ba Yi', AIR 1939 P. C. 110 (F) the Privy Council expressed its preference for the reasoning of the majority.
(3.) In England a failure to sue the principal debtor until recovery is barred by the Statute of Limitation does not operate as a discharge of the surety. In -- 'Carter v. White', (1885) 25 Ch D 666 (G) Lindlay, L. J., said, "Is it the law that a creditor who neglects to v sue his debtor till the Statute has run will thereby discharge his surety? There is no decision to that effect. On the contrary, the true principle is that mere omission to sue does not discharge the surety, because the surety can himself set the law in operation against the debtor." We think that this also is the law in India.;