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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
V SRISHANANDA
National Small Industries Corporation Ltd. – Appellant
Versus
Mysore Lamp Works Limited – Respondent
| Table of Content |
|---|
| 1. establishment of a suit for recovery based on bill discounting. (Para 2 , 3 , 4 , 5 , 6) |
| 2. arguments about continuing the suit against the second defendant based on liability. (Para 8 , 9 , 10) |
| 3. legal principles regarding liability of guarantor and impact of settlements. (Para 11 , 12 , 13 , 14) |
| 4. court's observations on miscarriage of justice and requirement for reconsideration. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23) |
| 5. conclusion to remit the matter for fresh consideration. (Para 24 , 25 , 26 , 27 , 28) |
ORDER :
V.SRISHANANDA, J.
Heard S.Krishnaswamy, learned counsel for the petitioner and Sri G.Krishnamurthy, learned Senior Counsel for the respondent No. 2.
2. Plaintiff in OS No.8468/2001 is the revision petitioner, challenging the order on memo dated 05.02.2010.
3. The facts in the nutshell are as under:
Plaintiff filed the suit for recovery of money from the defendants. Plaintiff being the company registered under the Companies Act, wholly owned by the Government of India, had extended the facility of bill discounting to the first defendant for the supply of goods to be made by the second defendant in favour of the first defendant. As and when such materials
A guarantor's liability persists unless expressly discharged or consented to changes in the obligation of the principal debtor; a settlement with the principal debtor does not automatically extinguis....
The liability of sureties remains despite the dismissal of a suit against the principal borrower if the creditor's rights are intact.
(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....
Consent decrees are valid obligations under surety bonds, unless impacted by fraud or collusion.
A suit against a guarantor can proceed independently of the principal debtor's suit dismissal if the liability remains intact, but the plaintiff must substantiate claims with adequate evidence.
The surety's liability persists despite creditor actions that do not impair the security, as established in the guarantee deed.
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