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2002 DIGILAW 1465 (AP)

Medisetti Ravi Babu v. Pramida Chit Fund Pvt. Ltd.

2002-12-16

C.Y.SOMAYAJULU

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( 1 ) 1st respondent filed the suit against the revision petitioners and 2nd respondent who are sureties and principal debtor respectively and obtained a money decree against them. Revision Petitioners filed an appeal against the decree and sought stay of execution of the decree passed against them. They were directed to deposit half of the decreetal amount and costs as a condition precedent for granting stay of execution of the decree passed against them. That order is being questioned in this revision. ( 2 ) THE contention of the learned counsel for the revision petitioners is that since decree against the 2nd respondent (principal debtor) became final for the reason of his not filing an appeal against decree passed against him. 1st respondent could as well proceed against 2nd respondent and realize the decreetal amount from him, and his not filing an E. P. against the 2nd respondent for realization of the decreetal amount and trying to realize the decreetal amount only from the revision petitioners who are only sureties of 2nd respondent shows the lack of bona fides on the part of 1st respondent. It is his contention that 1st respondent should first proceed against the 2nd respondent, who is the principal debtor, and in case of his not being able to realize the decreetal amount from 2nd respondent only can the 1st respondent proceed against the revision petitioners, who are only sureties to the transaction and in view thereof the first appellant Court directing the revision petitioners to pay half the decreetal amount as a condition precedent for granting stay is unsustainable. ( 3 ) I do not find any force in the contention of the learned counsel for the revision petitioners, because both revision petitioners and 2nd respondent are the joint promissors and so revision petitioners, as sureties of 2nd respondent, have no legal right to require the 1st respondent to enforce the decree against the 2nd respondent in the 1st instance, in view of Section 132 of Contract Act. Here I feel it relevant to mention that in relation to the right of surety against the credit or there is a difference in English Law and Indian law. Here I feel it relevant to mention that in relation to the right of surety against the credit or there is a difference in English Law and Indian law. In England, as per Rouse v. Bradford banking Company, after the guaranteed debt has become due, and before he has been asked to pay the same, the surety may require the creditor to call upon the principal debtor to pay off the debt, subject to his undertaking to indemnify the creditor for any risk, delay or expense resulting there-from, and the surety cannot compel the creditor to sue the principal debtor before suing him. But as per section 132 of Contract Act which is in force from 1-9-1872, i. e. , long prior to the said decision, knowledge per se of the creditor that one out of the joint promissors is a principal debtor and the other is surety is not enough, to enforce such a right unless there is a specific agreement between the surety and the creditor that principal debtor only would be made liable in the first instance, before proceeding against the surety. If no such agreement is in existence, the creditor can proceed against the surety as if he is a principal debtor, without trying to realize the debt from the principal debtor. In this case it is not the case of the revision petitioners that there is an agreement between them and 1st respondent. Therefore, in view of section 132 of Contract Act first respondent has a right to proceed against the revision petitioners also, as if they are principal debtors, though in fact they are the sureties of the 2nd respondent. Even as per the rule in rouse s case (1 supra) the surety can exercise his right to ask the creditor to proceed against the principal debtor in the first instance Before he is Asked to pay the same, subject to his undertaking to indemnify the creditor for the loss, etc. , but not after the creditor obtained a decree against both the principal debtor and surety, therefore, 1st respondent has a right to enforce the decree against revision petitioners also as if they also are principal debtors. , but not after the creditor obtained a decree against both the principal debtor and surety, therefore, 1st respondent has a right to enforce the decree against revision petitioners also as if they also are principal debtors. ( 4 ) THIS apart I do not see any error in exercise of jurisdiction of the appellate Court in imposing a condition for deposit of half the decreetal amount and costs as a condition- 1 for granting stay of execution of the decree against them, in as much as Rule 5 of order 41 CPC empowers the appellate Court to impose conditions for staying execution of the decree of the trial Court. Here I feel it relevant to mention that the revision petitioners ought to either deposit the amount disputed in appeal or furnish security for that amount as a condition precedent for maintaining the appeal in view of Sub rule 3 of Rule 1 of Order 41 CPC. Obviously since revision petitioners did not comply with the said Rule 1 (3) of Order 41 CPC only the appellate Court must have passed the order impugned in this revision. The object of introducing Sub Rule 3 of Rule 1 of order 41 CPC is to prevent the debtors delaying payment of amount due to their creditor and to safeguard the interest of the creditor. But unfortunately the said Sub Rule is followed more in breach than in practice. If appellate Courts enforce Rule 1 (3) of Order 41 CPC debtors harassing the creditors by filing Frivolous appeals can be prevented, and the object with which the said sub rule was introduced by way of 1977 Amendment to CPC can be achieved. ( 5 ) FOR the above reasons, I find no merits in this revision petition and hence the same is dismissed. The revision petitioners, however, are granted time till the end of january, 2003 for depositing the amount ordered to be deposited by the learned i-Additional District Judge.