ABOOBACKER Vs. AYISHU

JUDGEMENT

(1.) This case reveals an unfortunate feud between a son and mother. The mother, plaintiff was a surety for the defendant, her son for a loan of Rs.75,000/- availed of from a bank to purchase a jeep. As security, the plaintiff had to mortgage her property. The defendant, the principal debtor committed default. This resulted in a suit filed by the bank. The suit was obviously decreed. That led to execution of the decree against the defendant as well as the plaintiff. The plaintiff had to pay Rs.10,000/- at one instance to avert sale of the property offered as security. The defendant did not pay back that amount to the plaintiff. Therefore, the suit was filed to recover the said amount. The suit was decreed and the defendant is assailing the concurrent decree.

(2.) It is an admitted case that the defendant did not pay the entire amount due in terms of the said decree to the bank, but paid only a part. It is further admitted that no amount is now due from the defendant towards the said decree debt. Obviously, the decree debt had been paid, except to the extent the defendant discharged the liability, by the plaintiff on payment of the said Rs.10,000/- and other subsequent payments. Consequently, Inspite of Ext. B2 that there was an understanding between the parties that the guarantor was liable to pay the amount the suit was decreed. The decree was confirmed by the lower appellate court. It is in the above circumstances, this S.A., mainly raising a substantial question of law centered around S.140 of the Indian Contract Act, 1872. It is contended that as the amount claimed in the suit does not satisfy the entire liability, the plaintiff is not entitled in terms of the said Section to be subrogated and that without paying the entire debt, the guarantor cannot realise a portion of the debt paid, from the principal debtor, as he has not performed "all that he is liable for" in terms of S.140.

(3.) In support of these contentions, the appellants relied on the decisions reported in Darbari Lal and Anr. V. Mahbub Ali Mian and Others (AIR 1927 Allahabad 538 (2)), Garr Lazarus Philipe and Others V. Alfred Earnest Mitchell and Others (AIR 1930 Calcutta 17) and Amrit Lal Govardhan Lal (dead) by his legal representative v. State Bank of Travancore and Others ( AIR 1968 SC 1432 ). It is held in the first among the three decisions that a guarantor is liable to pay whole of the indebtedness of the principal debtor. This preposition can never be disputed. In the second decision, it is held that a guarantor can get back the security only on payment of the entire amount due in terms of the transaction. That also is beyond doubt. The Supreme Court has held in the third decision that a guarantor will step into the shoes of the creditor when the guarantor discharges his obligations in terms of the contract. What is to be considered is whether these three decisions have any bearing on substantial question of law involved in the case.