Supreme Court of India
STATE BANK OF INDIAversusINDEXPORT REGISTERED AND ORS.
- Citation
- 1992 INSC 146
- Decided
- 30 April 1992
- Disposal
- Appeal(s) allowed
- Bench
- S RANGANATHAN
Holding
A composite decree that contains both a money decree and a mortgage decree may be executed against any judgment‑debtor, including a guarantor, without the prerequisite of first executing the mortgage decree.
Summary
The State Bank of India (SBI) granted a packing credit to a partnership and secured it by an equitable mortgage of a shop and a personal guarantee. SBI obtained a composite decree comprising a money decree against all defendants, including the guarantor, and a mortgage decree for sale of the shop. The guarantor objected to execution, arguing that the mortgage property must be sold first and only then could the guarantor be sued. The Additional District Judge and the Delhi High Court held that the composite decree required prior execution against the mortgaged property, denying execution against the guarantor. The Supreme Court held that the decree was simultaneous and jointly‑severally enforceable, and the decree‑holder may execute the money decree against any judgment‑debtor, including the guarantor, without first executing the mortgage decree. Consequently, the lower courts' orders were set aside and the appeal was allowed.
Issues considered
- The decree is a composite decree comprising a money decree against all defendants and a mortgage decree against the mortgaged property; can the decree‑holder execute the money decree against the guarantor without first executing the mortgage decree?
- Does the decree impose any condition that execution against the guarantor be postponed until the mortgaged property is sold?
Legislation cited
- Code of Civil Procedure, 1908s. Order 21 Rules 30, 46, 46A, 46F, 50, 72A, s. Order 34 Rules 4, 5, s. Section 151, s. Section 47
- Indian Contract Act, 1872s. Section 128
Subjects
composite decreeexecution of decreeguarantor liabilitymortgage decreemoney decreeCivil Procedure CodeIndian Contract Actsuretyshipjoint and several liability
Judgment
STATE BANK OF INDIA A
v.
~ INDEXPORT REGISTERED AND ORS.
APRIL 30, 1992
(S. RANGANATHAN, V. RAMASWAMI AND YOGESHW AR B
DAYAL, JJ.]
~
Civil Procedure Code, 1908:
---- r-
Order 21, Rules 30, 46, 46A, 468, 46F, 50, 72A and Order 34, Rules 4
and 5 and Sections 47 and 151-Execution of Composite decree comprising
a money decree personally against all defendants-judgment debtors, and also
c
a mortgage decree against one of the partners in respect of shop mortgaged
;....-· by him-Whether decree-holder can execute the decree first against the guaran-
tor without proceeding against the mortgaged property-Wlietlzer guarantor
can be sued without even suing the principal debtor-Guarantor's D
/iability-Wliether co-atensive with that of principal debtof"-Wl1ether execut-
ing. court can go beyond tlze decree-Contract Act, 1872: Section 128.
The appellant-Bank had granted a Packing Credit facility to the
extent of Rupees one lakh to the Respondent No. 1- Firm, consisting of E
Respondent No. 2 and the deceased son of Respondent No. 3. Respondent
No. 2 had created an equitable mortgage of his shop as security and
Respondent No. 4, father of the deceased partner, had executed a Deed of
Guarantee in favour of the appellant-Bank.
__.., The appellant-Bank filed a suit against the respondents including F
Respondent No. 3 who was impleaded in place of her deceased son, for a
money decree and also ·for a preliminary decree against Respondent No.
2, and for a direction that if he committed default, a final decree be passed
""-...-41( against him, with permission to the appellant to apply for a personal
decree against him for any deficiency after the sale of the morgaged
G
property. The suit was decreed by the trial court.
,.
No appeal was filed by the Respondent No. 4 - Guarantor, and the
decree became final. Al the time of execution of the decree Respondent No.
4 objected to it on the ground that since no steps were taken against the
·,.:..._,
mortgaged property i.e. shop, no action by way of execution could be taken H
1031
1032 SUPREME COURT REPORTS (1992) 2 S.C.R.
A for proceeding against the guarantor till the mortgaged shop was sold and
only if the realisation from tht: sale of the shop was deficient, then the }-
balance could be recovered from the judgment-debtors personally.
The Additional District Judge held that since it was a composite
decree, and the mortgaged property was also involved, the decree-holder
B should have proceeded first against the mortgaged shop and, since it had
not done so, the execution application against the objector (guarantor) did
not lie. The appellant-decree-holder challenged this decision before the
High Court which also dismissed the revision petition. Hence the appeal
by the decree- holder.
c
Allowing the appeal, this Court,
HELD : 1. The decree is a money decree against all the defendants-
respondents and a mortgage decree only against defendant-respondent No.
2 so far as the shop is concerned. The decree does not put any fetter on
D the right of the decree-holder to execute it against any party, whether as a
money decree or as a mortgage decree. The execution of the money decree
is not made dependent on first applying for execution of the mortgage
decree. The choice is left entirely with the decree-holder. There is no
preliminary mortgage decree either. It is a final mortgage decree for sale
E of shop after three months: The decree is not in the prescribed Form No.
S of Appendix 'D' to the Code of Civil Procedure. The decree does not
postpone the execution. It is simultaneous and is jointly ant'. severally
against all the defendants-respondents, including the guarantor. It is the
right of the decree-bolder to proceed with it in a way he likes. There is
nothing in law which provides a composite decree to be first executed only
F against the property. (1037 C~E, 1038 E]
1.2 The decree for money is a simple decree against the judgment-
debtors, including the guarantor and in no way subject to the execution of
the mortgage decre~ against the judgment debtor No. 2- Respondent No.
G 2. If, on principle, a guarantor could be sued without even suing. the
principal-debtor ttlere is no reason, even if the decretal amount is covered
by the mortgage decree to force the decree-holder to proceed ag·linst the
mortgaged"property first and then to proceed against the guarantor.
(1040 H, 1041 A]
H 1.3 If the composite f,lecree is a decree which is both a personal
. I
S.B.I. v. INDEXPORT 1033
decree as well as a mortgage decree, without any limitation on itS execu- A
tion, the decree-holder, in principle, cannot be forced to first exhaust t~
remedy by way of execution of the mortgage decree alone and told that only
if the amount recovered is insuffident, he can be permitted to take
recourse to the execution of the personal decree. For a simple mortgage
decree as prescribed in Form No. 5 of Appendix 'D' of the Code of Civil B
Procedure it could be so because the decree provides like that. It is only
when the sum realised on sale of the mortgaged property is insufficient
then the judgment-debtor can be proceeded with personally. rt041 C-D]
Union Bank of India v.Manku Narayana, AIR 1987SC1078, differed~
Bank of Bihar Ltd. v. Damodar Prasad & Anr., [1989) 1 SCR 620, C
relied on.
The Hukumchand Insurance Co. Ltd. v. The Bank of Baroda & Ors.,
AIR 1977 Kamataka 204; Jagannath Ganeshram Agarwala v. Shivnarayan
Bhagirath & Ors., AIR 1940 Bombay, 247 and Muthuvelappa Goundan & D
Anr. v. Palaniapa Chettiar & Ors., 1937 Madras Weekly Reports 373,
approved.
Raja Raghunandan Prasad Singh & Anr. v. Raja Kirtyanand Singh
Bahadur, AIR 1932 P.C. 131, distinguished.
E
Pollock & Mulla on Indian Contract and Specific Relief Act, Tenth
Edition. p 728; Chitty on Contracts 24th Edition Volume 2, p. 1031, para-
graph 4831 & Halsbury's Laws of England Fourth Edition paragraph 159
p. 87, referred to.
In the instant case, the guarantor never took any plea in the suit to F
.the effect that his liability is only contingent if remedies against the
principal debtors fail to satisfy the dues of the decree-holder. If such a
plea had been taken and the court trying the suit had considered the plea
and gave any finding in favour of the guarantor, then it would have been
a different position. But on the face of the decree, which has become final, G
the court c.annot construe it otherwise than its tenor. No executing court
can go beyond the decree. All such pleas as to the rights which the
guarantor had, had to be taken during trial and not after the decree while
execution is being levied. (1042 G, 1043 A]
1.5 The orders of the High Court and of the Additional District Judge H
1034 SUPREME COURT REPORTS [1992) 2 S.C.R.
A are set aside. The decree-holder is entitled to proceed against the guarantor
(judgment-debtor No. 4) for the execution of the decree in question. [1043 BJ '!-
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1888 of
1992.
B f'.rom the Judgment and Order dated 23.5.1990 of the Delhi High
Court in Civil Revision No. 587 of 1989.
G. Ramaswamy, Harish N. Salve, Rajiv Kapur and R.P. Kapur for
the Appellants.
C J.C. Batra, Vijay Kumar, H. Chawla, S. Prasad and Ms. Sangeeta
Aggarwal for the Respondents
The Judgment of the Court was delivered by
YOGESHWAR DAYAL, J. Special leave granted.
D,
This appeal is directed against the judgment of the High Court of
Delhi dated 23rd April, 1990 whereby the High Court was pleased to
dismiss the revision petition filed by the appellant-Bank against the judg-
ment of the Additional District Judge, Delhi dated 5th May, 1989 whereby
E the Additional District Judge, Delhi, relying upon the decision of this Court
in Union Bank of India v. Manku Narayana, AIR 1987 SC 1078, dismissed
the Execution Application No. 39of1985 against respondent No .. 4 Gudg- .J,....,
ment debtor-Guarantor).
The question involved in the appeal really is whether the said
F decision is correct. In Manku Narayana's case (supra) this Court took the
view that:
"The decree in execution is a composite decree, personally
against the defendants including the respondent and also
against the mortgaged property. We do not pause to consider
G whether the two portions of the decree are severable or not.
We are of the view that since a portion of the decreed amount
is covered by the mortgage, the decree-holder Bank has to
proceed against the mortgaged property first and then proceed
against the guarantor. Since the High Court was not told that
H such steps were taken, we do not think we will be justified in
S.B.I. v. INDEXPORT (YOGESHWAR DAYAL, J.) 1035
holding that the High Court was in error in making the direc- A
tion which is under challenge before iis."
Before we go into the question o1the correctness or otherwise of the
aforesaid decision a few facts of the ptekent case may be noticed.
The appellant, one of the Na•tonalis'd Banks, is a decree-holder.
I .
B
M/s. Indexport Registered, respondWnt No. 1, is a partner firm. Shri
Janeshwar Kumar Jain, respondent No. 2, was a partner of respondent No.
1 along with one Shri Ajay Kishan Mehta (since deceased and now repre-
sented by his mother Smt. Savitiri Devi, respondent No. 3). Shri Ram
Kishan, respondent No~ 4, is a guarantor. C
The appellant-Bank had grant~d to respondent No. 1 a Packing
Credit Facility to "the extent of Rs. 1,00,000 and respondent No. 4 had
executed a Deed of Guarantee in favour of the appellant-Bank. Shri Ajay
Kishan Mehta, having died prior to the filing of the suit, Smt. Savitiri Devi, D
was impleaded in place of her deceased son as his legal representative. As
a security, respondent No. 2, had also created an equitable mortgage of his
shop situated in Rori Bazar, Sirsa, Haryana, in favour of the appellant.
The appellant was obliged to file a suit against the respondents for
a money decree for Rs. 33,705.22. The appellant also prayed for a prelimi- E
nary decree against the respondent No. 2 with a direction that if he
commits a default in payments, a final decree be passed against him with
permission to the appellant to apply for a personal decree against him for
any deficiency after the sale of the mortgaged property. The suit was
contested by the respondents. In paragraph. 12 of its judgment, while .f
deciding issue No. 7 relating to the relief, the learned trial court observed
as under:-
"12. In view of my findings recorded above, the present suit
succeeds and decreeing the same, I hereby pass a decree in
" favour of the plaintiff for recoyery of Rs. 33,705.22 p. with costs. G
The defendants shall pay future interest at the rate of 7% per
annum (as agreed in the letter Ex. PAPW 5/4) from the date
of the institution of the suit till its realisation. The plaintiff Bank
shall also be entitled to the amount by way of sale of the shop
in case the decretal amount is not paid within a period of three H·
1036 SUPREME COURT REPORTS (1992) 2 S.C.R.
A months from today, decree in question will also be deemed to
be a personal decree against all the defendents, but, however,
decree will be executable against defendant No. 3 qua the estate
inherited by her from Ajay Kishan Mehta. Decree-sheet be
prepared and the file be consigned to the record room."
B On an application of the appellant-Bank the· execution of the decree
was transferred to Delhi and on notice being issued by the Court of the
Additional District Judge, Delhi, guarantor-respondent No. 4 filed objec-
tions. The main objection was that no 6teps were taken against the
mortgaged property i.e. shop and no action by way of execution could be
C taken for proceeding against the guarantor till the mortgaged shop is sold
and it is only if the realisation from the sale of the shop is deficient that
the balance could be recovered from the judgment debtors personally.
The Additional District Judge, Delh~Jollowing the decision of this
D Court in Manku Narayana's case (supra) took the view that it is a com-
posite decree, personally against the principal debtor and the guarantor
and also against the mortgaged property of defendant No. 2, and therefore,
since it is a composite. decree and the mortgaged property is also involvi;d,
the decree-holder should have proceeded first against the mortgaged shop
and since it has not done so, the execution application against the objector
E
(guarantor) does not lie. The decree-holder challenged this decision dated
5.5.1989 by way of a revision petition before the High Court and the High
Court also, following the decision of this Court in Manku Naraya11a's case
(supra), dismissed the revision petition and it is against this decision that
the present appeal arises.
F
It will be noticed· that the loan was taken by the firm, namely,
respondent No. 1, which consisted of Sh. Dhaneshwar Kumar Jain, respon-
dent No. 2 (defendant No. 2) and Sh. Ajay Kishan Mehta (since deceased).
The respondent No. 2 (defendant No. 2) had created an equitable
G mortgage of his shop and respondent No.4, who is a father of late Sh. Ajay
Kishan Mehta stood guarantor for the loan to respondent No. 1. The very
wordings of the decree quoted above shows that it is a personal decree
against all the defendants/judgment-debtors. Respondent No. 4 was defen-
dant No. 4, so it is a money decree against defendant No. 4 as well. It is
,H also a mortgage decree against the mortgagor, namely-defendant No. 2
S.B.I. v. INDEXPORT [YOGESHWAR DAYAL, J.) 1037
only. The decree specifically mentions that a money decree iS being passed A
~ for recovery of Rs. 33,705.22 with costs and the defendants shall pay
interest @ 7% per annum from the date of the institution of the suit till its
realisation. There is also a decree passed in favour of the Bank entitling it
to sell the shop in case decretal amount is not paid within three months
from the date of the decree and the decree specifically mentions that it will B
~ be deemed to be a personal decree against all the defendants (respon-
dents). Only qua defendant No. 3 it can be executed only to the extent the
mother inherited the estate of her son Shri Ajay Kishan Mehta. It is thus
---,
clear from the decree that it is a money decree against all the defendailts
(respondents) and a mortgage decree only against defendent No. 2
(respondent No. 2) so far as the shop in concerned. The decree does not
c
put any fetter on the right of die decree-holder to execute it against any
y ' party, whether as a money decree or as a mortgage decree. The execution
of the money decree is not made dependent on first applying for execution
of the mortgage decree. The choice is left entirely with the decree-holder.
The question arises whether a decree which is framed as a composite D
de-'::ree, as a matter of law, must be executed against the mortgage property
first or can a money decree, ·which covers whole or part of decretal amount
covering mortgage decree can be executed earlier. There is nothing in ~aw
which' provides such a composite decree to be first executed only against
the property. It will be noticed that there is no preliminary mortgage decree E
• either. Ii is a final mortgage decree for sale of shop after three months .
The decree is not in the prescribed form No. 5 of Appendix 'D' to the
Code of Civil Procedure.
-- In.Bank of Bihar Ltd. v. Damodar Prasad and another, [1%9) 1 SCR F
620 the facts were that the plaintiff Bank lent money to Damodar Prasad,
defendant No. 1, on the guarantee of Paras Nath Sinha, defendant No. 2.
On the date of the suit Damodar Prasad was indebted to the Bank for Rs.
~ -...-,(,
11,723.56 on account of principal and Rs. 2,769.37 on account of interest.
In spite of demands neither the principal debtor nor the guarantor paid .
the dues. The plaintiff Bank then filed a suit •claiming a decree for the
G
amount due. The trial court decreed the suit against both the defendants
·but while passing the decree the trial court directed that the plaintiff Bank
shall be at liberty to enforce its dues against defendant No. 2 only after
,A having exhausti;d its remedies against defendant No. 1. The plaintiff went
in appeal challenging the legality ancl propriety of this direction. The.High ft
1038 SUPREME COURT REPORTS [1992) 2 S.C.R.
A Court dismissed the appeal, whereupon on certificate, the matter came
before this Court. Bachawat, J. speaking for the Court held that the
direction must be set aside. It was observed that :
"It is the duty of the surety to pay the decretal amount. On such
payment he will be subrogated to the rights of the creditor
B under Section 140 of the Indian Contract Act, and he may then
recover the amount from the principal. The very object of the
guarantee is defeated if the creditor is asked to postpone his
remedies against t~e surety. In the present case the creditor is
banking company. A guarantee is a collateral security usually
c taken by a banker. The security will become useless if his rights
against the surety can be so easily cut down."
The Court further held that such directions are neither justified '...(
under Order XX rule 11(1) or under the inherent powers of the Court
under Section 151 of the Code of Civil Procedure to direct postponement
D of the execution of the decree.
In the present case before us the decree does not postpone the
execution. The decree is simultaneous and it is jointly and severally against
all the defendants including the guarantor. It is the right of the decree-
holder to proceed with it in a way he likes. Section 128 of the Indian
E Contract Act itself provides that "the liability of the surety is co-extensive
with that of the principal debtor, unless it is otherwise provided by the
contract".
F
In Pollock & Mulla on Indian Contract and Specific Relief Act,
Tenth Edition, at page 728 it is observed thus :
"Co-extensive-Surety's liability is co-extensive with that of the
·-
principal debtor.
A surety's liability to pay the debt is not removed by reason of
the creditor's ommission to sue the principal debtor. The
G
creditor is not bound to exhaust his remedy against the prin-
cipal before suing the surety, and a suit~may be maintained
against the surety though the principal has not been sued."
In Chitty on Contracts 24th Edition Volume 2 at page 1031 para- ,.!.._
.H graph 4831 it is stated as under: -
S.B.I. v. INDEXPORT [YOGESHWAR DAYAL, J.] 1039
........
"Prima facie the surety may be proceeded against without A
demand against him, and without first proceeding against the
principal debtor."
In Halsbury's Laws of England Forth Edition paragraph 159 at page
87 it has been observed that "it is not necessary for the creditor, before
proceeding against the surety, to request the principal debtor to pay, or to B
sue him, although solvent, unless this is expressly stipulated for."
-
In The Hukumchand Insurance Co. Ltd. v. The Bank of Baroda and
others, AIR [1977) Karnataka 204, a Division Bench of the High Court of
,,- Karnataka had an occasion to consider the question of liability of the surety c
vis-a-vis the principal debtor. Venkatachaliah, J. (as His Lordship then
y was) observed : -
"The question as to the liability of the surety, its extent and the
manner. of its enforcement have to be decided on first principles
D
as to the nature and incidents of suretyship. The liability of a
principal debtor and the liability of a surety which is co-exten-
sive with that of the former are really separate liabilities,
although arising out of the same transaction. Notwithstanding
the fact that they may stem from the same transaction, the two
liabilities are distinct. The liability of the surety does not also, E
in all cases, arise simultaneously.".
--
It will be noticed that the guarantor alone could have been sued,
without even suing the principal debtor, so long as the creditor satisfies the
court that the principal debtor is in default.
F
In JaganlJ.ath Ganeshram Agarwala v. Shivnarayan Bhagirath and
) . ...-.t' others, AIR {1940) Bombay 247, a Division Bench of the Bombay High
Court (Kania and Wassoodew JJ.) held that the liability of the surety is co-
extensive, but is not in the alternative. Both the principal debtor and the
surety are liable at the same time to the creditors. G
In Muthuvelappa Goundan and another v. Palaniapa Chettiar and
others {1937) Madras Weekly Reports 373, the facts were that the plaint
combined two claims, one against defendants 1 to 3 and their children on
the basis of a promissory note Ex. A executed by defendants 1 to 3 and H
1040 SUPREME COURT REPORTS (1992) 2 S.C.R.
A one Kasiappa, deceased, on 29th August, 1931 and the other a claim
against Kasiappa's sons (defendants 4 and 5) not merely on the promissory
note but also on a security bond Ex. B executed by Kasiappa on 17th April,
1932 in respect of the amount due wider Ex. A. The suit was decreed. An
appeal was filed by defendants 1 to 3 against certain directions contained
B in the decree of the lower court as to manner in which the decree is to be
executed. The Subordinate Judge had to consider the contention put
forward on behalf of Kasiappa's sons that the properties covered by Ex. B
should be sold only after the plaintiff had exhausted his remedies against
defendants 1 to 3 ·and their family properties. The defendants 1 to 3
C contended to the contrary. The trial court directed that the plaintiff should
bring the secured properties to sale after exhausting the personal remedy
against the defendants, meaning the remedy personally against defendants
-
1 to 3, and also the remedy against the family ·property of all the defen- ·-..,/
dants. The appeal was filed by defendants 1 to 3 before the High Court. It
was contended on behalf of the appellants that the lower court should have
D directed the plaintiff to proceed in the first instance against the security
properties and only after they had been sold should the plaintiff have been
. permitted to proceed against the appellants. personally. This contention
was sought to· be supported before the High Court by the analogy of a
decree to be passed in mortgage suits. It was pleaded that provisions of
E Section 68 of the Transfer of Property Act should be applied as the remedy
in respect of charge is governed by it. It was also urged on behalf of the
appellants that on the true construction of Section 68, the course con-
-
tended for by him would be the proper course. This contention of the
appellants was negatived by the High Court. The High Court observed that
p this can apply only as between the mortgagor and the mortgagee and the
appellants had nothing whatever to do with the security bond. The relation-
ship of the appellants was not of the mortgagor at all, and, therefore,
Section 68 could not be invoked.
It will be noticed that in the present case no appeal was filed by the
G guarantor against the passing of the decree and the decree has become
final.
The decree for money is a simple decree against the judgment
debtors including the guarantor and in no way subject to the execution of .Jo...
H the mortgage decree against the judgment debtor No. 2. If on principle a
S.B.I. v. INDEXPORT (YOGESHWAR DAYAL, J.] 1~41
guarantor could be sued without even suing the principal debtor there is A
no reason, even if the decretal amount is covered by the mortgage decree,
to force the decree-holder to proceed against the mortgaged property first
and then to proceed against the guarantor. It appears the above quoted
observations in Manku Narayana's case (supra) are n?t based on any
established principle of law and/or reasons, and in fact, are contrary to law. B
It, of course depends on the facts of each case how the composite decree
is drawn up. But if the composite decree is a decree which is both a
personal decree as well as a mortgage decree, without any limitation on its
execution, the decree-holder, in principle, cannot t>e forced to first exhaust
--- the remedy by way of execution of the mortgage decree alone and told that
only if the amount recovered is insufficient, he can be permitted to take C
recourse to the execution of the personal decree. For a simple mortgage
decree as prescribed in Form No. 5 of Appendix D of t~e Code of Civil
Procedure it could be so beeause the decree provides like that. It is only
when the sum realised on sale of the mortgaged property is insufficient
then the judgment~debtor can be proceeded with personally. But the D
observations of the Court in Manku Narayana's case (supra) that even if
the two portions of the decree are severable and merely because a portion
of the decretal amount is covered by the mortgage decree, the decree-
holder, per force has to proceed against. the mortgaged property first are
not based on any principle of law. With all due respect to the learned E
Judge, in the light of the observations made by us earlier, we are con-
strained to observe that Manku Narayana's case (supra) was not correctly
decided.
Mr. Batra on behalf of the respondent/guarantor submitted that since F
the plaintiff/decree-holder chose to fi~e the suit at Sirsa only with a view
that the mortgage property is situated there, he should, therefore, take
recourse to the execution of the mortgage decree alone in the first instance.
It will be noticed that we are dealing with the matter at the execution stage
and are not concerned with the correctness or otherwise of the decree
under execution. Therefore, this submission of the learned counsel has got G
no basis. Learned counsel for the guarantor then brought to our notice the
following decisions: -
Raja Raghunandan Prasad Singh and another v. Raja Kirtyanand
Singh Bahadur, AIR f1932) P.C. 131. This case has not application to the H
1042 SUPREME COURT REPORTS (1992) 2 S.C.R.
A present case as it dealt with the construction of the surety bond furnis~
during appeal in a decree pass~d in a mortgage suit.
State of Madhya Pradesh v. Kaluram, AIR (1967) SC 1105. This again
has no relevance as it relates to the question when the security gets
discharged.
B
The Bank of Bihar v. The State of Bihar and others, AIR (1971) SC
1210. This was a case of pledge of the goods and, therefore, has .no
relevance to the facts of the present case.
C Look Karan Sethia etc. v. Ivan E. John and others etc., (1977) 1 SCR
853 at 871. This again was a case relating to dissolution of partnership and
for rendition of accounts.
The State Bank of Saurashtra v. Chitranjan Rangnath Raja and
another, J\IR (1980) SC 1528. It will be noticed that in this case plea was
D taken in the suit and the matter was not reiating .to the execution of the
decree.
State Bank of India v. Mis. Saksaria Sugar Mills Ltd. and others, AIR
(1986) SC 868. In this case even when the sugar Mills were taken over it
E was held that the Bank's rights as secured creditors and their remedies are
not affected.
Deep Chand v. Punjab National Bank and another, 1 (1990) BC 50;
This case again is relating to the interpretation of the decree ·and has no
relevance to the facts of the present case.
F
Kumar Sudhendu Narain Deb v. Renuka Biswas (Mrs.) and others..
This again has no application to the question posed before us. ·
The guarantor in the present suit never took any plea to the effect
that his liability is only contingent if remedies..ag(!inst the principle debtor
G fail to satisfy the dues of the decree-ho1der. If such a plea had been taken
.and the court trying the suit had considered the plea and gave any findini
in favour of the guarantor, then it would have been a different position.
But in the present case, on the face of the decree, which lias become final,
.~ ( '
the court cannot construe it otherwise than its tenor; ~o executing court
H· can go beyond the decree. All such pleas as to the rights which the
S.B.I. v. INDEXPORT {YOGESHWAR DAYAL, J.) 1043
guarantor ~ad, had to be taken during trial and not after the decree while A ·
execution is being levied.
The result is. that the appeal is allowed and the impugned orders of
the High Court dated 23rd May, 1990 and of the learned Additional
District Judge dated 5th May, 1989 are set aside and it is held that the
decree-holder is entitled to proceed against the guarantor Gudgment debt- B
or No. 4) for the execution of the aforesaid decree.
It appears that in pursuance of th~ orders of this Court dated 19th
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February, 1990 respondent No. 4 bas furnished a bank guarantee in favour
of the appellant-bank to the extent of Rs. 70,000. In view of the resuh of · C
the appeal, the decree-holder bank will be entitled to proceed against
judgment-debtor No. 4 to the extent of the decretal amount recoverable
from the bank guarantee furnished by him and also to proceed in execution
in accordance with law for the balance amount, if any.
N.P.V. Appeal Allowed.
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'A
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