A creditor can proceed against a guarantor without first exhausting remedies against the principal borrower if the debtor has sufficient means to satisfy the decree.

O R D E R

Challenging the Order of Civil arrest passed by the Executing Court in the execution proceedings, the present Civil Revision Petition has been filed.

2. Brief background of the case is as follows :

The decree holder had filed a case before the Registrar of Chits for recovery of a sum of Rs.23,94,906/- and award has been passed for recovery of the said amount along with interest at the rate of 24% as per the contract and for cost of Rs.1,30,912/-. As the amount has not been paid, the execution has been levied as against the revision petitioners. A stand has been taken by the revision petitioners that the first judgment debtor has already given security for the award amount and without invoking execution against the first judgment debtor, execution proceedings cannot be proceeded as against the revision petitioners. According to them, they are only guarantors.

3. The executing Court after assessing the evidence produced on the side of the decree holder in this regard and satisfied itself that the judgment debtors have means to pay the amount, particularly relying on the income tax returns filed by the judgment debtor has Ordered arrest of the revision petitioners. Challenging the same, the present revision petition has been filed.

4. The main contention of the revision petitioners is that as against the principal borrower Execution Petition has already been filed and immovable property of the principal debtor has been attached and sale paper has also been filed. Therefore, once execution petition has also been taken out in respect of the property of the principal borrower, according to the revision petitioners, only in order to harass the guarantor, the execution petition has been filed.

5. It is relevant to note that as far as the legal position is concerned, before ordering arrest, the execution Court has to satisfy itself that the judgment debtor has means to satisfy the decree amount. Once it is established before the Executing Court that the judgment debtor has satisfied itself, the arrest can be ordered. Infact, P.W.1 has been examined and Ex.P.1 to Ex.P.17 have been marked on the side of the decree holder and further taking note of the income tax returns of the judgment debtors at the relevant point of time, the Executing Court has ordered arrest. The judgment debtors have also not produced any contra evidence and not even let in oral evidence. Therefore, the contention of the judgment debtors that since principal debtor is also proceeded in the execution petition, the guarantors cannot be proceeded, has no legs to stand.

6. The law is well settled that the creditor is not bound to exhaust his remedy against the principal borrower before suing the surety and a suit may be maintained against the surety though the principal has not been sued. Hence, the decree holder can levy execution against the guarantors even without proceeding against the principal debtor. This view has been reiterated in the judgment in Industrial Investment Bank of India Limited Vs. Biswanth Jhunjhunwala reported in [2009] 9 Supreme Court Cases 478 Hence, there is no bar under law to proceed simultaneously as against the judgment debtor's person and property. At the most the Court can exercise its discretion to refuse such execution as per Order XXI Rule 21. In the present case, execution petition has also been filed against the property of the principal borrower and simultaneous execution has not been refused by the Court. Whereas, arrest is sought against the guarantors/revision petitioners. Therefore, this Court is of the view that as the means have been proved and arrest has been ordered, judgment debtors cannot challenge that Order of arrest merely on the ground that the property of the principal debtor is also a subject matter of the execution proceedings.