GRANDHI KAMARAJ Vs. GOVERNMENT OF ANDHRA PRADESH

JUDGEMENT

(1.) : The two questions which were unsuccessfully urged before the learned single Judge are also urged in this appeal, viz., whether in respect of a loan advanced by the respondent No. 3-corporation, it can proceed agains the surety for recovery of the loan instead of first proceeding against the loanee; and, secondly, whether the provisions of Section 32-G of the State Financial Corporations Act, 1951 and Section 52-A of the A.P. Revenue Recovery Act, 1864 cannot be made applicable for recovery of the amount as the amount could not be called land revenue.

(2.) The learned single Judge held both the questions against the appellants though in respect of the second contention he took the view that Section 52-A of the A.P. Revenue Recovery Act, 1864 could be held to be ultra vires, and that G.N. Venkataswamy v. Tamil Nadu Small Industries Development Corporation Ltd. (1) AIR 1980 Mad 318, has taken a similar view, yet in view of the decision of this Court in Tamarind Seeds Products of India v. State of Andhra Pradesh (2) 1980 (2) ALT, 429, the question is no longer res Integra, and that though it was open for him to refer the matter to a larger Bench, yet because of amendment to the State Finance Corporations Act, 1951 by addition of Section 32-G to that Act, the question no longer remains as one to be decided.

(3.) The law is by nowfar well settled that the liability of the surety in respect of a loan is coextensive with that of the debtor and that it is open to the creditor to proceed against either the debtor or the surety or both. The leading decision on the question is Bank of Bihar v. Damodar Prasad (3) AIR 1969 SC 297, which has been subsequently followed in many other cases. Section 128 of the Contract Act makes the liability of the surety co-extensive with that of the debtor. The question, hence is no longer open to be canvassed.