STATE BANK OF MYSORE Vs. SRI A M DEENATHAYALAN

JUDGEMENT

(1.) AGGRIEVED against the order passed by the PO, DRT-1, Chennai, on the direction that the property of D3 should be sold only after exhausting the securities furnished by D1 and D2 and in case the amount realised is insufficient, then the balance may be recovered by selling the security furnished by D3 and also awarding interest pendente life and future at 11% simple, the appellant Bank has come forward with this appeal,

(2.) With regard to the first point that the properly of D3 should be sold only after exhausting the securities furnished by D1 and D2, Counsel for the appellant Bank submits that D3 is the guarantor and D3 executed the guarantee document and the Bank is entitled to proceed against the principal debtors and the guarantor and the liability of the principal debtors and guarantor is co-extensive and the Bank cannot be deprived of its opportunity to proceed against the property of the guarantor and it should not be directed that the Bank should proceed only against D1 and D2 in the first instance and then only the Bank should proceed against D3. Counsel for the appellant Bank submits that all the properties available should be proceeded for realisation of the amount due to the Bank and the Bank cannot be fettered with the condition that D3's property should be proceeded only after exhausting the remedy as against D1 and D2.

(3.) MUCH reliance is placed on the above decision by the Counsel for the respondents and he submits that in the absence of some special equity the surety has no right to restrain an action against him by the creditor. It has to be borne in mind that D3 is the guarantor and he executed the guarantee documents. The liability of the principal debtor and the guarantor is co-extensive. The decree-holder cannot be forced to first exhaust the remedy by way of execution of mortgage decree alone and then proceed against the guarantor.