3187347
Description
Mind Map by Rohit Beerapalli, updated more than 1 year ago
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Created by Rohit Beerapalli
over 9 years ago
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Co-extensive Liability
- Surety is liable for the whole
amount for which the principal
debtor is liable, and no more.
- Surety is liable for not only the
amount of the loan, but any
interest or charges which may
be due on it.
- Maharaja of Benares v.
Har Narain Singh
- Trial court erred in stating
that the surety was liable
only for principal amount.
- Trial court erred in stating
that the surety was liable
only for principal amount.
- Hargopal Agarwal v. SBI
- Where part of the principal has
been recovered, liability of the
surety goes down as well.
- Part of the loan was
recovered by disposing
of some goods owned by
the company.
- Part of the loan was
recovered by disposing
of some goods owned by
the company.
- Where part of the principal has
been recovered, liability of the
surety goes down as well.
- Maharaja of Benares v.
Har Narain Singh
- Surety is liable for not only the
amount of the loan, but any
interest or charges which may
be due on it.
- Condition Precedent
- Partial recognition under Section 144
- If there is a condition that
the creditor shall not act on a
guarantee until a co-surety
joins, the guarantee is not
valid till that person joins.
- If there is a condition that
the creditor shall not act on a
guarantee until a co-surety
joins, the guarantee is not
valid till that person joins.
- National Provincial Bank of England
v. Brackenbury
- The defendant signed a guarantee
that was intended to be a joint and
several liability of three other
persons with him.
- One of them did not sign
the guarantee, therefore
there was no guarantee.
- Alternately, it would be valid if the
bank and sureties had an agreement
to dispense with the signature.
- Alternately, it would be valid if the
bank and sureties had an agreement
to dispense with the signature.
- One of them did not sign
the guarantee, therefore
there was no guarantee.
- The defendant signed a guarantee
that was intended to be a joint and
several liability of three other
persons with him.
- Partial recognition under Section 144
- No need to exhaust remedies
against debtor before
proceeding against surety.
- Bank of Bihar Ltd. v.
Damodar Prasad
- The creditor trying to
make the debtor pay
would defeat the object
of the guarantee.
- It is the responsibility
of the surety to make
sure that the principal
pays, not the creditor.
- It is the responsibility
of the surety to make
sure that the principal
pays, not the creditor.
- The creditor trying to
make the debtor pay
would defeat the object
of the guarantee.
- Union of India v. Manku Narayan
- Overruled in SBI v.
Indexport Registered
- The decree can be executed, jointly,
or severably, against the debtor,
mortgaged property, and surety.
- The decree holder cannot be forced
to execute the mortgage decree,
and only then proceed on the
execution of the personal decree.
- The decree holder cannot be forced
to execute the mortgage decree,
and only then proceed on the
execution of the personal decree.
- The decree can be executed, jointly,
or severably, against the debtor,
mortgaged property, and surety.
- A creditor must proceed first
against the mortgaged property,
and only then against the surety.
- Even if there is a composite
decree against the debtor,
surety, and mortgaged property.
- Severability was
not considered.
- Severability was
not considered.
- Even if there is a composite
decree against the debtor,
surety, and mortgaged property.
- Overruled in SBI v.
Indexport Registered
- Bank of Bihar Ltd. v.
Damodar Prasad
- The mortgaged property of the
guarantor cannot be taken
possession of without notice to him.
- Amulya Lal v. Tripura
Industrial Development
Corporation Limited
- Liability of the guarantor is only
secondary. It does not arise until
default by the principal-debtor.
- Liability of the guarantor is only
secondary. It does not arise until
default by the principal-debtor.
- Amulya Lal v. Tripura
Industrial Development
Corporation Limited
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