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2015 DIGILAW 221 (KAR)

State Bank of Mysore v. Venkangouda Tippanagowda Patil

2015-02-26

S.SUJATHA

body2015
JUDGMENT : S. Sujatha, J. 1. This appeal is directed against the judgment and decree passed by the lower appellate Court in R.A. No. 7/2009 dated 02.07.2010. For the sake of convenience, parties are referred to as they are referred to in the suit before the trial Court. 2. Briefly stated, the facts are as follows: Plaintiff-Bank had sanctioned a commercial loan of Rs. 30,000/- to defendant No. 1, to run his Video Cassette Library on 16.06.1995 and defendant No. 2 stood as guarantor in securing the credit facility from the plaintiff bank. As per the terms of sanction, defendants have agreed to repay the loan amount within 12 months from the date of advancement. In view of non-compliance of the terms of sanction by the defendants and despite issuing notices, the defendants have failed to repay the loan amount as agreed upon. Hence, O.S. No. 113/1998 was instituted by the plaintiff-bank against the defendants for recovery of loan amount along with interest in a sum of Rs. 32,424/-. During the pendency of the suit, defendant No. 1 died and the suit against defendant No. 1 was dismissed, in view of the memo filed by the counsel for the plaintiff and the suit was proceeded only against defendant No. 2. The suit was decreed in favour of the plaintiff, against which, appeal was preferred by defendant No. 2 and the same was allowed and remanded back to the trial Court for fresh disposal. After remand, the suit was dismissed, against which, plaintiff-bank preferred an appeal before the lower appellate Court and the same came to be dismissed confirming the judgment and decree passed by the trial Court. The said judgment and decree passed by the lower appellate Court is impugned in this appeal. 3. The learned counsel appearing for the appellant contented that, surety's liability is co-extensive with that of the principal debtor and the surety's liability cannot be extinguished in view of the dismissal of the principal borrower. 4. After hearing the learned counsel appearing for the appellant and perusing the material on record, it is noticed that, suit against defendant No. 1 was abated on 17.06.1999, in view of death of defendant No. 1. Admittedly, plaintiff-bank had filed a memo before the trial Court on 05.02.2001 seeking dismissal of the suit against defendant No. 1 as abated. 4. After hearing the learned counsel appearing for the appellant and perusing the material on record, it is noticed that, suit against defendant No. 1 was abated on 17.06.1999, in view of death of defendant No. 1. Admittedly, plaintiff-bank had filed a memo before the trial Court on 05.02.2001 seeking dismissal of the suit against defendant No. 1 as abated. Therefore, the only point that arises for consideration before this Court is: "Whether the suit filed against the principal borrower and the guarantor jointly could be proceeded only against the guarantor, subsequent to suit being abated against principal debtor?" 5. This point is extensively considered by a Division Bench of this Court in the case of T. Raju Setty v. Bank of Baroda, reported in AIR 1992 Karnataka 108, wherein, it is categorically held that: "In a case where the creditor chooses to proceed against the principal debtor and the sureties jointly and severally and the suit abates against the principal debtor, the suit cannot be decreed against the sureties because in respect of the same subject-matter of the suit, there will be two conflicting decrees." It is true that surety's liability is coextensive with that of the principal debtor. However, in view of the suit being dismissed as abated so far as principal debtor is concerned, the suit cannot be decreed against the sureties, which will result in conflicting decrees. In view of this authoritative pronouncement of this Court referred to supra, I am of the view that no substantial question of law arises for consideration in this appeal against the concurrent findings of the Courts below. Accordingly, the appeal is dismissed.