BANK OF BIHAR LTD. versus DAMODAR PRASAD & ANR.

The direction restraining execution of the decree against the surety until remedies against the principal debtor are exhausted is invalid and must be set aside, as the surety's liability is immediate and not contingent on pursuit of remedies against the principal debtor.

Parties: Appellant: Bank of Bihar Ltd.; Respondent No. 1: Damodar Prasad; Respondent No. 2: Paras Nath Sinha
Jurisdiction: India
Judgment Date: 08 August 1968
Procedural Posture: Civil Appeal / Appeal From Judgment and Decree of Patna High Court
Outcome: Appeal allowed
Legal Topics: Surety Liability, Execution of Decrees, Postponement of Payment

Contract Law Civil Procedure Surety Liability Execution of Decrees Postponement of Payment

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Full judgment text Legal principles 3 Authorities cited 6 Party arguments 2 Amounts and remedies 3

Parties

Bank of Bihar Ltd.

Appellant

Damodar Prasad

Respondent No. 1

Paras Nath Sinha

Respondent No. 2

Procedural Posture

Civil Appeal / Appeal From Judgment and Decree of Patna High Court

Legal Issues

1 Whether the Trial Court can direct the creditor to enforce the decree against the surety only after exhausting remedies against the principal debtor
2 Whether solvency of the principal debtor is a ground for postponing execution against the surety

Ratio Decidendi

Court Disposition

Appeal allowed

Orders

The direction that plaintiff-bank shall be at liberty to enforce its dues against defendant No. 2 only after having exhausted remedies against defendant No. 1 is set aside.
Respondent Dr. Paras Nath Sinha shall pay to the appellant costs in this Court and in the High Court.