JUDGMENT : 1. Heard learned advocate Mr. Chirag B Patel for the petitioners and learned advocate Mr. Deshal Modi with learned advocate Mr. Nisarg Trivedi for the respondent nos. 3 and 4. Though served no one appeared for rest of the respondents. 2. Having regard to the controversy involved in this petition which is in a narrow compass, the petition is taken up for final hearing with the consent of learned advocates for both the sides. 3. Rule returnable forthwith. Learned advocate Mr. Deshal Modi waives service of notice of rule on behalf of respondent nos. 3 and 4. As no one has appeared pursuant to the notice issued by this Court, rule is not required to be served upon the other respondents, namely, respondent no.1-Board of Nominees, respondent no.2-Gujarat State Cooperative Tribunal and respondent no.5-Nimesh Pravinchandra Shah. 4. The petitioner bank has filed this petition under Articles 226 and 227 of the Constitution of India challenging the judgment and order dated 29.07.2019 passed by the Gujarat State Co-operative Tribunal (For short “the Tribunal”) in Appeal No. 68 of 2012 upholding the judgment and award dated 10.02.2012 passed in New Summary Lavad Case no. 547 of 2007 below Exh.52 by the Board of Nominees. 5. Brief facts of the case are that the petitioner no.1 bank advanced loan to purchase the computers under the Vajpayee Swarojgar Yojna amounting to Rs.90,000/- on 25.03.2000 to respondent no.5. Respondent nos. 3 and 4 stood as guarantor. The respondent no.5 committed default in payment of outstanding dues of the petitioner bank. The petitioner no.1-Bank therefore, instituted a Summary Lavad case no. 1029 of 2004 for the recovery of Rs. 1,07,410/- before the Board of Nominees. 6. The Board of Nominees, Vadodara by judgment and award dated 25.01.2005 allowed the Summary Lavad Case filed by the petitioner bank. 7. Respondent nos.3 and 4 filed a Review Application no. 38 of 2005 under Order IX Rule 13 of the Code of Civil Procedure, 1908 before the Board of Nominees to review the judgment and award dated 25.01.2005 on the ground that respondent nos. 3 and 4 were not served with notice of Lavad Case No.1029/2004. 8. The Board of Nominees by order dated 22.02.2007 allowed Review Application No.38/2005 and restored original Summary Lavad Case No.1029/2004 qua respondent nos. 3 and 4 only and ordered to proceed with the suit by giving new number. 3 and 4 were not served with notice of Lavad Case No.1029/2004. 8. The Board of Nominees by order dated 22.02.2007 allowed Review Application No.38/2005 and restored original Summary Lavad Case No.1029/2004 qua respondent nos. 3 and 4 only and ordered to proceed with the suit by giving new number. Accordingly, Lavad Case No. 1029/2004 was renumbered as Summary Lavad Case No.547/2007. 9. The Board of Nominees by judgment and award dated 10.02.2012 dismissed New Summary Lavad Case No.547/2007 qua respondent nos. 3 and 4 holding that respondent nos. 3 and 4 have proved that they are required to be exonerated from the liability of payment of outstanding dues of the petitioner bank. The Board of Nominees passed the award in favour of respondent nos.3 and 4 on the ground that respondent no.5 who availed the loan of Rs. 90,000/- to purchase the computer from the petitioner bank never purchased the computer and false documents were produced before the bank. It was also found that the petitioner bank did not take any action for execution of the hypothecation deed nor any attempt was made to recover the computer. It was therefore, found by the Board of Nominees that the petitioner bank has acted in such a way so as to cause prejudice to respondent nos.3 and 4 who stood as guarantors and due to such negligence, respondent nos.3 and 4 were held not liable for the outstanding dues of respondent no.5. The Board of Nominees permitted the petitioner bank to execute the award passed on 25.01.2005 against respondent no.5. 10. Being aggrieved by the judgment and award passed by the Board of Nominees dated 10.02.2012, the petitioner bank preferred Appeal No.628/2012 before the Tribunal. The Tribunal after considering the facts as well as the submissions made on behalf of the petitioner bank and respondent nos.3 and 4, confirmed the judgment and award dated 10.02.2012 passed by the Board of Nominees in view of fact that respondent no.5 never purchased the computer for which the loan was availed by him. The Tribunal also found that the petitioner bank never made any verification with regard to computer purchased and place at which such computer is kept. Moreover, the purchase bills are also not produced by the petitioner bank on record of the case. The Tribunal also found that the petitioner bank never made any verification with regard to computer purchased and place at which such computer is kept. Moreover, the purchase bills are also not produced by the petitioner bank on record of the case. The Tribunal therefore, relying upon the provisions of section 139 and 141 of the Indian Contract Act, 1872 came to the conclusion that respondent nos. 3 and 4 are not liable to pay the outstanding dues of the petitioner bank and they are to be released from guarantee. 11. Being aggrieved by the impugned judgment and order passed by the Tribunal, the petitioner has preferred this petition. 12. Learned advocate Mr. Chirag B Patel for the petitioner has submitted that the Board of Nominees as well as the Tribunal passed the impugned orders contrary to the provisions under section 127 and 128 of the Indian Contract Act, 1872 which provides that the liability of the guarantor is coextensive with that of a borrower. It was submitted that the Board of Nominees have not given any reasoning with regard to exonerating respondent nos. 3 and 4 from the liability of the payment of outstanding dues to petitioner no.1-Bank for the amount borrowed by the respondent no.5. It was further submitted that the petitioner-Bank has filed the suit on the basis of the gurantee given by the respondent nos.3 and 4. The petitioner-bank has also filed complaint under the provisions of Negotiable Instruments Act, 1881 against the respondent no.5 and his father being Criminal Case no. 673 of 2003. Inspite of this action taken by the petitioner-Bank the Board of Nominees have exonerated respondent nos. 3 and 4 from the liability of payment of outstanding dues of the petitioner-Bank. 13. In support of the submissions, learned advocate for the petitioner has placed reliance on the decision in case of Central Bank of India Vs. C.L Vimla and ors. reported in (2015) 7 SC 337, wherein the Apex Court held that the liability of the guarantor is co-extensive as per the provisions of section 128 of the Indian Contract Act and it is the prerogative of the creditor alone whether he would move against the principal debtor first, for surety to realise the loan amount and the guarantor cannot evade liability on the ground that he was not the party on any ground. It was submitted that respondent nos. It was submitted that respondent nos. 3 and 4, therefore, cannot evade the liability on the ground of any lapse on part of the petitioner-Bank. 14. On the other hand, learned advocate Mr. Deshal Modi for the respondent nos. 3 and 4 the original defendants nos. 2 and 3 before the Board of Nominees and the appellants before the Tribunal submitted that both the authorities below have rightly exonerated respondent nos. 3 and 4 from the liability of the payment of the outstanding dues of the respondent no.5- borrower as in the facts of the case, the petitioner-bank has not taken any care to ascertain whether the respondent no.5 purchased the computer for which the loan was given. It was submitted that both the authorities have concurrently held that the respondent -Bank has not placed any documents, in support of the purchase of computers such as invoice, delivery challan nor any report of the inspection conducted by the petitioner - Bank. It was further submitted that the petitioner-bank has also failed to place on record any document to show that the verification was made with regard to the existence of the computer, as the respondent no.5 failed to purchase the computer and in absence of any documents of verification placed by petitioner-bank on record, the respondent nos. 3 and 4 are not liable to make the payment of the outstanding dues to the petitioner- Bank. 15. Learned advocate Mr. Deshal for the respondent nos.3 and 4 relied upon the provisions of 139 to 141 of the Indian Contract Act and submits that respondent nos. 3 and 4, who are the surety/guarantor to the petitioner- bank cannot be saddled with the liability of making payment of the outstanding dues, as the petitioner-bank has not taken any action with regard to the rights of the respondent nos. 3 and 4 and has omitted to do the verification, which is the duty of the petitioner-Bank and as such, respondent nos. 3 and 4 are required to be discharged. 16. It was further submitted that petitioner-bank has omitted to discharge the duties cast upon it while providing financial assistance to respondent no.5-borrower that the respondent nos. 3 and 4 stand discharged as guarantors. 3 and 4 are required to be discharged. 16. It was further submitted that petitioner-bank has omitted to discharge the duties cast upon it while providing financial assistance to respondent no.5-borrower that the respondent nos. 3 and 4 stand discharged as guarantors. As the facts of the case, the petitioner-bank has failed to place on record any inspection report conducted by the petitioner-bank and has remained negligent for obtaining the sale invoice or purchase invoice of the computers in question, hence the petitioner-bank cannot invoke to guarantee given by the respondent nos. 3 and 4. 17. In support of the submissions by learned advocate for the respondent nos. 3 and 4 placed reliance upon the following decisions:- 1. State Of Madhya Pradesh vs Kaluram reported in AIR 1967 SC 1105 . 2. State Bank Of Saurashtra vs Chitranjan Rangnath Raja And Anr reported in 1980 AIR 1528. 3. State Bank Of India vs Quality Bread Factory And Ors reported in AIR 1983 P H 244. 4. Central Bank of India Vs.Vimla and Ors reported in (2015) 7 SCC 337 . 5. Saranjit Singh Vs. Punjab National Bank rendered in First Appeal No.205/1996, decided on 19.12.1996. 18. Having heard learned advocates for the respective parties and in view of the concurrent findings arrived at by the Board of Nominees and the Tribunal pointing out that the petitioner-Bank has remained negligent and has failed to discharge duties cast upon it while granting financial assistance to respondent no.5-borrower, the respondent nos. 3 and 4 have rightly been discharged as guarantors. The petitioner-bank therefore, cannot recover any outstanding amount to the respondent no.5-borrower from the respondent nos. 3 and 4. 19. It is undisputed fact that the petitioner- Bank has failed to carryout inspection of the site where the computer and furniture’s were supposed to be kept by the respondent no.5- borrower. Moreover, there is nothing on record to show that the petitioner -Bank has advanced the loan after verification of the purchase invoice and delivery challan of the computers purchased by the respondent no.5 - borrower. It is also emerging from the record that the respondent no.5 is absconding and he has also not remained present before this Court. Moreover, there is nothing on record to show that the petitioner -Bank has advanced the loan after verification of the purchase invoice and delivery challan of the computers purchased by the respondent no.5 - borrower. It is also emerging from the record that the respondent no.5 is absconding and he has also not remained present before this Court. Further, petitioner-Bank has also failed to place on record the efforts made by the petitioner-bank to recover the dues by taking possession of computers because there was no computers available purchased by the respondent no.5-borrower with the amount advanced by the petitioner-bank. In such circumstances, respondent nos.3 and 4 cannot be held liable to pay the outstanding dues of the petitioner-bank as they stand discharged. 20. In view of the omission of the duties cast upon the petitioner-Bank for advancing loan to respondent no.5, the provisions of sections 139 to 141 of the Indian Contract Act, 1872 would be attracted. 21. In case of State Of Madhya Pradesh vs Kaluram (supra), the Apex Court held as under: “11. Kaluram by executing the surety bond had undertaken to discharge the liability arising out of any act, omission, negligence or default of the forest contractor. The surety Kaluram contends that because the State lost or parted with the security he stood discharged. By Section 140 of the Indian Contract Act, 1872, where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety, upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor; and by Section 141 it is provided: "A surety is entitled to the benefit of every security which the creditor has against the principal debtor at the time when the creditor loses, or, without consent of the surety, parts with contract of suretyship is entered into, whether the surety knows of the existence of such security or not; and, if the such security, the surety is discharged to the extent of the value of the security." The State had as already observed, a first charge over the goods; the State was also entitled to prevent the goods from being removed without payment of the amount of instalments due. The expression "security" in Section 141 is not used in any technical sense: it includes all rights which the creditor had against the property at the date of the contract. The surety is entitled on payment of the debt or performance of all that he is liable for, to the benefit of the rights of the creditor against the principal debtor which arise out of the transaction which gives rise to the right or liability: he is therefore on payment of the amount due by the principal, debtor entitled to be put in the same position in which the creditor stood in relation to the principal debtor. If the creditor has lost or has parted with the security without the consent of the surety, the latter is, by the express provision contained in Section 141, discharged to the extent of the value of the security lost or parted with. 13. In Wulff and Billing v. Jay Hannen, J., stated the law thus: "I take it to be established that the defendant became surety upon the faith of there being some real and substantial security pledged, as well as his own credit, to the plaintiff; and he was entitled, therefore, to the benefit of that real and substantial security "In the event of his being called on to fulfil his duty as a surety, and to pay the debt for which he had so become surety. He will, however, be discharged from his liability as surety if the creditors have put it out of their power to hand over to the surety the means of recouping himself by the security given by the That doctrine is very clearly expressed in the notes in Rees v. Barrington 2 White & Tudor's L.C., 4th Edn. at p. 1002 As a surety, on payment of the debt, is entitled to all the securities of the creditor, whether he is aware of their existence or not, even though they were given after the contract of surety ship, if the creditor who has had, or ought to have had, them in his full possession or power, loses them or permits them to get into the possession of the debtor, or does not make them effectual by giving proper notice, the surety to the extent of such security will be discharged. A surety, moreover, will be released if the creditor, by reason of what he has done, cannot, on payment by the surety, give him the securities in exactly the same condition as they formerly stood in his hands." Subject to certain variations, which are not material for the matter under discussion, Section 141 of the Contract Act Incorporates the rule of English law relating to the discharge from liability of a surety when the creditor parts with or loses the security held by him.” 22. In case of State Bank Of Saurashtra vs Chitranjan Rangnath Raja And Anr. (supra), the Apex Court held that section 141 comprehends a situation where the debtor has offered more than one security one of which is the personal guarantee of the surety. Even if the surety of personal guarantee is not aware of any other security offered by the principal debtor, yet once the right of surety against the principal debtor is impaired by any action or inaction, which implies negligence appearing from lack of supervision undertaken in the contract, surety would be discharged under the combined operation of sections 139 and 151 of the Indian Contract Act. 23. In case of Saranjit Singh Vs. Punjab National Bank(supra), Madhya Pradesh High Court held that if the creditor had omitted to do any act which his duty to surety required him to do and eventual remedy of surety himself against principal debtor was thereby impaired, surety would certainly stand discharged. 24. Considering the above legal position, reliance placed by the petitioner on the decision in case of Central Bank of India Vs. C.L Vimla and ors.(supra) would not be applicable in the facts of the case inasmuch as there is no dispute that the liability of the guarantor would be co-extensive with that of principal borrower but that would be subject to rider of fulfillment of requirements as per the provisions of sections 139 and 141 of the Indian Contract Act, 1872 on part of the petitioner bank. Admittedly in the facts of the case, the petitioner bank has remained negligent and has failed to discharge duties cast upon it to carry out verification of the purchase of the computers for which the loan was advanced to respondent no.5 and further it also emerges from the record that the petitioner bank has not placed on record the purchase bills of the computer and loan was advanced merely on the basis of quotation. 25. In such circumstances, the surety given by the respondent nos.3 and 4 stands discharged. Both the authorities below have rightly come to the conclusion by discharging respondent nos. 3 and 4 from liability of payment of outstanding dues of the petitioner-bank. 26. In view of concurrent findings of fact arrived at by the authorities below and in view of the foregoing reasons, no interference is required to be made while exercising extraordinary jurisdiction under Article 227 of the Constitution of India. 27. The petition therefore, being devoid of any merit, is hereby dismissed. Rule is discharged.