BHARATBHAI SAGALCHAND THAKKAR Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The appellant has filed this appeal under Clause 15 of the Letters Patent challenging oral order dated 13.12.2018 passed by the learned Single Judge in Special Civil Application No.13339 of 2015 confirming the order dated 13.03.2015 passed by the Gujarat State Cooperative Tribunal, Ahmedabad, in Appeal No.438 of 2006 arising from the Summary (Lavad) Case No. 367 of 2004.

(2.) There is no dispute for certain facts recorded in paras 2.1 and 2.2 of order dated 13.12.2018 and for ready reference paras 2.1 and 2.2 are reproduced hereunder:

(3.) Mr.Bachani, learned counsel for the appellant, however, would contend that though the Board of Nominees discharged the appellant from his liability, the reversal of the order of Board of Nominees by the Tribunal was uncalled for inasmuch as individually the appellant was not liable to pay the loan amount. Since loan was disbursed in favour of original borrower and even society was not clear about the entire loan transaction, the decision taken by the Board of Nominee was just and proper and within four corners of law. It is further submitted that ordinarily, duty is cast upon the cooperative society or the bank, as the case may be, first to recover loan advanced to borrower and then to take steps against the guarantor. By referring to cross-examination Exh.47 conducted by learned advocate of plaintiff society wherein it was stated that he knew respondent No.2 as his friend and admitted that he put his signatures as surety in the documents of the loan transaction and also admitted further that his signatures might have been obtained at the time of renewal. By inviting our attention to section 141 of the Indian Contract Act, 1872, which pertains to right of the surety to benefit of creditor''''''''s securities, it is submitted that a surety is entitled to the benefit of every security which the creditor has against the principal debtor at the time when the contract of surety ship is entered into, and that whether the surety knows of the existence of such security or not, and if the creditor loses, or without the consent of the surety, parts with such security, the surety is discharged to the extent of the value of the security.