A decree passed in favour of creditor against the debtor and the surety, stipulates that the decree shall not be executed against the surety, before the creditor has taken all steps to execute it against the debtor. Is the stipulation sustainable?
The stipulation in question that the decree shall not be executed against surety before the creditor has exhausted his remedies against debtor, is against law and, therefore, shall not be sustainable. Section 128 of the Indian Contract Act, 1872 makes the liability of the surety coextensive with that of the principal debtor, unless the
contract provides otherwise. Since no such provision is stated to have been so provided, the liability of the surety arises as soon as principal debtor defaults. Any such provision that the remedies be first exhausted against debtor will tantamount to postponement of surety's liability which shall be against the spirit of the provisions of the Indian Contract Act as stated above.
Hence, the decree passed in favour of creditor with the said stipulation is not valid and the creditor may proceed against the decree of the lower court and get the judgement rectified.
The stipulation in question that the decree shall not be executed against surety before the creditor has exhausted his remedies against debtor, is against law and, therefore, shall not be sustainable. Section 128 of the Indian Contract Act, 1872 makes the liability of the surety coextensive with that of the principal debtor, unless the
contract provides otherwise. Since no such provision is stated to have been so provided, the liability of the surety arises as soon as principal debtor defaults. Any such provision that the remedies be first exhausted against debtor will tantamount to postponement of surety's liability which shall be against the spirit of the provisions of the Indian Contract Act as stated above.
Hence, the decree passed in favour of creditor with the said stipulation is not valid and the creditor may proceed against the decree of the lower court and get the judgement rectified.
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