Sureties remain liable for debts even if terminal benefits are paid to legal heirs; creditor can recover dues from either principal debtor or sureties.

JUDGMENT

P.V.BALAKRISHNAN,J This Original Petition under Article 227 of the Constitution of India, is filed by the applicants in OA No.529/2022, aggrieved by the order dated 23.05.2025, passed by the Central Administrative Tribunal, dismissing their original application.

2. The petitioners/applicants are the employees under the first respondent. One Mr.Satheesh, who was also an employee of the first respondent, had availed three loans from the 3^rd respondent-Credit Co-operative Society and the petitioners stood as sureties for these loan transactions. Satheesh committed default in repaying the loan and he committed suicide on 02.06.2021. Since the loan amount remained unpaid, notices were issued by the 3^rd respondent to the petitioners calling upon them to pay the defaulted amounts. Petitioners submitted Annexures A6 to A8 representations requesting the Society to recover the amount due from the terminal benefits of late Satheesh. They also submitted Annexures A9 and A10 representations to the 2^nd respondent requesting him not to deduct the defaulted amount from their salary. But, the 2^nd respondent effected deductions from the salary of the petitioners as per the recovery schedule issued by the 3^rd respondent. It is in such circumstances, the petitioners approached the Central Administrative Tribunal by filing the afore OA, seeking the following reliefs :

“i) This Honourable Tribunal may be pleased to set aside Annexure A14 to A16 communication issued by the 2^nd respondent rejecting the request to not to recover the amount from the salary for the amount outstanding in the Loan account of Late Satheesh.M.B.

ii) This Honourable Tribunal may be pleased to pass a direction directing the 2^nd respondent Accounts Officer to not to recover amount from the salary of the petitioners towards the amount demanded by the 3^rd respondent Society on account of Loan availed by the deceased Satheesh.M.B.”

3. The learned Tribunal, after considering the materials on record and hearing both sides, dismissed the O.A.

4. Heard Adv.G.Krishnakumar, the learned counsel appearing for the petitioners, Adv. K.R.Krishnakumari, the learned counsel appearing for the first respondent and Adv. Pratap Abraham Varghese, the learned counsel appearing for the 3^rd respondent. 5. The learned counsel for the petitioners submitted that the petitioners stood as sureties only on the reason that in case of death/retirement of the principal debtor, respondent No. 3 will recover the amount due from the terminal benefits of the employee.

He submitted that even though the 3^rd respondent Society has issued a communication intimating the 2^nd respondent, with the undertaking/consent of late Satheesh, to deduct the amount due in the loan account from the DCRG/terminal benefits of the deceased, the 2^nd respondent failed in doing so. He argued that it is only because of the fault of the 2^nd respondent, the petitioners are being penalised and therefore, the 2^nd respondent has no authority to deduct the amount from the salary of the petitioners. He contended that even as per Annexure A4 order, the controlling officer is bound to deduct the amount from the retiral benefits of the deceased and that the 2^nd respondent has, by flouting the norms, released the entire retiral benefits to the legal heirs of the deceased. He further submitted that by the said act, it can be safely inferred that the 3^rd respondent has settled the matter with the Principal Debtor and hence, the petitioners, as sureties, will be discharged from the liability.

6. Per contra, the learned counsel appearing for respondents 1 to 3 supported the impugned order and contended that there are no grounds to interfere with the same. They argued that the liability of the petitioners is co-extensive with the liability of de