The liability of a guarantor is immediate and coextensive with that of the principal debtor, allowing creditors to pursue guarantees without first exhausting debtor remedies.

ORDER :

1. This matter is taken up by virtual/physical mode.

2. The Petitioner, who stood as guarantor for a loan of Rs.30,00,000/- (rupees thirty lakhs) availed by his friend, late Ganeswar Mohanta, from Union Bank of India, Karanjia Branch in the district of Mayurbhanj in connection with business in the P.T.O. name and style “M/s. Ganesh Traders” has filed this writ petition craving for following reliefs:

“*** issue a writ of mandamus/certiorari or any other Writ by quashing the e-auction notice dated 29/07/2022 for sale of the property of the petitioner as per Annexure-4 (to be read as Annexure-1) and opposite party bank may kindly be directed to recover the amount from the legal heirs of deceased Ganeswar Mohanta namely the principal borrower ***.”

3. Dr. Sujata Dash, Advocate for the petitioner submitted that the friend of the Petitioner who was the loanee (died on 10.09.2020) left behind legal heirs with huge property which is sufficient to liquidate the loan liability. It is complained that during the pendency of Original Application bearing No.376 of 2021 filed by the opposite party-bank in the Debts Recovery Tribunal at Cuttack under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, particularly so when the petitioner has already filed his written statement on 25.05.2022 before the said Tribunal, action under the SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT , 2002 (for brevity hereafter referred to as “SARFAESI Act”), for e-auction sale fixing date on 30.08.2022 has unjustly been taken by the opposite party No.3-Union Bank of India, Regional Office in the district of Balasore vide Notice dated 29.07.2022 placed at Annexure-1. It is also submitted by the learned counsel for the petitioner that though the opposite party-bank is well aware of the fact that the original loanee-late Ganeswar Mohanta has left sufficient landed property to meet the loan amount, yet the property stands as collateral security belonging to the petitioner-guarantor is proceeded with for e-auction without serving any notice thereunder. It is next contended by the counsel for the petitioner that as none of the mandatory process given out under Rules 5, 8 and 9 of the Security Interest (Enforcement) Rules, 2002, is followed, the petitioner has filed a petition for grant of stay of e- auction sale which could not be taken up for consideration due to non-availability of Presiding Officer of the Debts Recovery Tribunal at Cuttack and, therefore, approaching this Court by way of writ petition under the provisions of Article 226/227 of the Constitution of India, the petitioner-guarantor seeks reliefs as already mentioned in the foregoing paragraph.

4. Bearing in mind what has been stated in Ram Kishun Vs. State of Uttar Pradesh , (2012) 11 SCC 511 to the effect that public money should be recovered and recovery should be made expeditiously, the contentions of the petitioner are untenable in the eye of law inasmuch as the liability of the surety as per Section 128 of the Contract Act, 1872, is coextensive with that of the principal debtor and once the debtor failed to clear the debts then the surety will become liable and the liability will be immediate. The creditor does not need to exhaust his remedies against the debtor first prior to going against the guarantor. The Contract Act uses the word “surety” for guarantor and thereof clearly states that “the liability of the surety is coextensive with that of the principal debtor, unless it is otherwise provided by the contract”, which means the guarantor will not only be liable for the principal loan amount, but also for any i