JAGDISH SINGH GARCHA Vs. STATE OF HARYANA

JUDGEMENT

(1.) Arguments were heard on 31/10/2018 and the judgment was reserved. The judgment is being released.

(2.) Whether a surety can be absolved of the liability only on the ground that the Government did not take action against the principal debtor swiftly? Undisputed facts are that in a public auction, contract of quarries for extracting the minor minerals was granted in favour of defendant No.1. The plaintiff-appellant stood surety and made himself liable for defaulted amount, if any. The plaintiff signed the indenture/contract entered into between the Government, defendant No.4-The Metal Corporation of India, the Contractor. The Contractor was required to deposit the security and pay the contracted amount in the installments. Clause 2 of the agreement provided that if the Contractor fails to pay any installment of contract money or any part thereof, the amount shall be payable with 15% interest thereon. The relevant Clauses of the agreement are extracted as under:-

(3.) It is not in dispute that the Contractor committed default in payment of monthly installment. Various notices were issued to the Contractor but since the payment was not made, ultimately the Contracts were terminated after giving sufficient opportunity to the Contractor vide order dtd. 30/10/1989 and the possession of the mine was taken over.