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HEMANT CHANDANGOUDAR
SSA Constructions – Appellant
Versus
Andra Bank Gandhi Nagar Branch – Respondent
ORDER :
Hemant Chandangoudar, J.
Petitioner No. 1, a partnership firm called M/s. SSA Constructions (the mortgagor-borrower), and Petitioner No. 2, its managing director and alleged surety, obtained various loan facilities from Respondent No. 1, the mortgagee creditor bank. They have filed this writ petition, challenging the dismissal of I.A. No. 674/2014 in O.A. No. 963/2011 by the Debt Recovery Tribunal (DRT), Bangalore, in an order dated 22.05.2015. In their application, the petitioners requested that the properties of Respondent Nos. 2 and 3 be included for issuing a recovery certificate under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act).
2. Respondent No. 1 had approved credit facilities for the petitioners and M/s. SSA Constructions (Defendant No. 3 in O.A. 963/2011, not listed here). The properties of the petitioners, co-borrowers, and guarantors were offered as security for the repayment of these loans.
3. On 08.03.2007, the term loan limit was reduced from Rs. 200 lakhs to Rs. 60 lakhs, and the properties of Respondent Nos. 2 and 3, which the petitioners now want to include, were released.
4. After the borrower defaulted on
The release of one co-surety does not discharge the others; the creditor can recover from either the principal debtor or any surety, and the Debt Recovery Tribunal has limited powers to recall its or....
(1) Liability of Surety – Liability of surety is co-extensive with that of principal-debtor, unless contract of guarantee provides otherwise – Liability of surety extends only to what contract he gua....
A surety is not discharged unless the creditor's wrongful act or negligence can be proven to have caused the loss of security.
The surety's liability persists despite creditor actions that do not impair the security, as established in the guarantee deed.
The liability of sureties remains despite the dismissal of a suit against the principal borrower if the creditor's rights are intact.
The Debt Recovery Tribunal has limited jurisdiction and cannot adjudicate complex issues like fraud and fabrication without a full trial.
The main legal point established in the judgment is the need to exhaust statutory remedies before seeking relief under Article 226 of the Constitution of India, particularly in matters involving the ....
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