Background:

1. In R.P. No. 856 of 2015, the petitioners are the guarantors, and the 4th respondent is the principal borrower; whereas the 3rd respondent is the creditor Bank.

2. In R. P. No. 857 of 2015, the petitioner is the guarantor, and the respondents 4 and 5 are the principal borrowers; whereas the first respondent is the creditor Bank. In both the cases, the principal borrowers, having been subjected to disciplinary proceedings, were made to retire compulsorily.

3. Since both the review petitions raise the same questions of law and fact, this Court has decided to dispose of them together through a common order. For ease of reference and convenience, I take into consideration the facts in R.P. No. 856 of 2015.

Facts:

4. Briefly stated, the petitioners are guarantors for the loan obtained by the 4th respondent from the first respondent Bank. When, on the default committed by the 4th respondent, the first respondent Bank initiated recovery proceedings-according to the petitioners-exclusively against the guarantors, both of them approached this Court and filed W.P.(C) No. 29304 of 2013.

5. To put the issue in context, I may observe that, after obtaining the loan, the 4th respondent faced disciplinary proceedings and earned a compulsory retirement. Out of service, the 4th respondent was not getting the regular salary, except having D.C.R.G. (Death-cum-Retirement Gratuity) to his credit. It is the contention of the petitioners that the creditor Bank could as well recover substantial amounts from the defaulter’s D.C.R.G.

6. In the course of time, this Court disposed of the writ petition through a judgment dated 31.08.2015, inter alia, holding that in terms of Section 128 of the Contract Act, it is the prerogative of the creditor to have the recovery either from the principal borrower or from the guarantors, or in the alternative, from all of them together.

7. This Court, in essence, has held that the liability being joint and several, the guarantors cannot be heard complaining that they cannot be singled out or discriminated against. Now the petitioners have come up with the review petition.

8. The singular grievance of the petitioners is that this Court, while rendering the judgment dated 31.08.2015, did not take into account the impact of Section 37 of the Kerala Co-operative Societies Act (‘the Societies Act’ for brevity) on the principle of joint and several liability as has been incorporated under Section 128 of the Contract Act.

Submissions:

The Review Petitioners’:

9. Sri. S. Subhash Chand, the learned counsel for the petitioners, has strenuously contended that Section 128 of the Contract Act is to be read in conjunction with Section 37 of the Act. According to him, since the Co-operative Societies Act has received the Presidential assent, even if there were to be any repugnancy, the provisions of the said Act prevail over the Indian Contract Act, a central enactment though.

10. In further elaboration of his submissions, the learned counsel has drawn my attention to a specific statutory stipulation in Section 128 of Contract Act to the effect that the liability of a surety is coextensive with that of the principal debtor unless the contract otherwise provides. The learned counsel has laid much emphasis on the expression in the nature of a conditional clause: ‘unless it is otherwise provided by the contract’.

11. The learned counsel has also taken me through Section 37 of the Act to contend that once the employee volunteers and executes an agreement with the creditor-society authorising the employer to effect deductions from his salary, it is mandatory that the recovery should be against the said person also, simultaneously. In other words, whatever be the protective cover the said employee has under any provision of law, it stands removed in the light of the agreement he has voluntarily entered into under Section 37 of the Act.

12. The learned counsel has, in the same vein, submitted that in Ext.P4 demand notice, the very thir