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of <h1>Guarantors' Liability Upheld in Recovery Proceedings</h1> The court held that the petitioners, acting as guarantors, could not be restrained from recovery proceedings initiated by the respondents. The court ... Enforcement of security interest Issues:1. Whether the petitioners, acting as guarantors, can be restrained from recovery proceedings initiated by the respondents.2. Whether the recovery can be made from the estate of the deceased principal debtor without exhausting all remedies against the principal debtor.Analysis:1. The petitioners filed a writ petition seeking to restrain the respondents from recovering a loan taken by the deceased principal debtor, for which the petitioners stood as guarantors. The petitioners argued that as guarantors, they should not be subjected to recovery proceedings. However, the court noted that the liability of guarantors is co-extensive with that of the principal debtor, as established in the case of Bank of Bihar Ltd. v. Dr. Damodar Prasad. The court emphasized that a surety cannot dictate terms to the creditor and must fulfill their obligations, even if the principal debtor is solvent. The court dismissed the argument that recovery should be made from the principal debtor first before turning to guarantors, citing legal precedents that support immediate liability of sureties.2. The court addressed the issue of whether recovery can be made from the estate of the deceased debtor without exhausting all remedies against the principal debtor. Referring to various legal judgments, including State Bank of India v. Saksaria Sugar Mills Ltd., the court clarified that the liability of a surety is immediate and not contingent upon the creditor exhausting remedies against the principal debtor. The court highlighted that a guarantor can be held liable without the creditor first attempting recovery from the principal debtor. Therefore, the court concluded that the recovery from the estate of the deceased debtor was justified, and the petitioners, as guarantors, could not object to the proceedings. The court found no merit in the petition and dismissed it accordingly.
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