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Showing contexts for: revocation of guarantee in T. Raju Setty vs Bank Of Baroda on 20 December, 1990Matching Fragments
(2) If a suit for recovery of money filed against the principal debtor and sureties making a claim jointly and severally and seeking a decree jointly and severally, abates against the principal debtor on the failure of the plaintiff to bring the legal representatives of the principal debtor on record, whether it can be proceeded with against the sureties, i.e, the other defendants Nos. 2 and 3 ?
(3) Whether a decree could be passed against sureties ?
11. Point No. 1. - Chapter VIII of the Indian Contract Act, 1872 (hereinafter referred to as "the Act"), deals with indemnity and guarantee. Section 124 defines the expression "contract of indemnity"; section 125 defines "right of indemnity holder when sued; section 126 defines the expressions "contract of guarantee ", "surety", "principal debtor" and "debtor"; section 127 provides regarding the consideration for guarantee; section 128 deals with "surety's liability"; section 129 states the "continuing guarantee"; sections 130 and 131 deal with revocation of continuing guarantee and revocation of continuing guarantee by surety's death respectively; section 132, 133, 134, 135 and 136 deal with liability of the sureties and discharge of their liabilities; section section 137 provides that the creditor's forbearance to sue the principal debtor or to enforce any other remedy against him does not, in the absence of any provision in the guarantee to the contrary discharge the surety; section 138 provides that where there are co-sureties, a release by the creditor of one of them does not discharge the others; neither does it free the surety so released from his responsibility to the other sureties; section 139 deals with the discharge of the surety by creditor's act or omission impairing the surety's eventual remedy; sections 140 to 141 deal with the rights of the surety on payment or performance and surety's right to benefit of creditor's securities respectively; sections 142 to 144 deal with the guarantee; section 145 deals with the implied promise to indemnify surety; section 146 deals with co-sureties liable to contribute equally and, lastly, section 147 deals with liability bound for different sums. Thus, it is relevant to notice that all these provisions contained in Chapter VIII of the Indian Contract Act are closely linked together and one is connected with another. Therefore, all these provisions pertaining to surety and guarantee and the principal debtor have to be read together and not in isolation. Section 128 of the Act specifically provides that the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. In the other provisions contained in Chapter VIII relating to the rights of the sureties, we do not find the words "unless it is otherwise provided by the contract" or "subject to the contract as may be arrived at by the parties." Therefore, different views are expressed by the High Court as to whether it is open to contract outside the provisions of Chapter VIII of the Act, pertaining to rights of the sureties.