Guarantor liability need not await exhaustion of the principal debtor's mortgaged assets absent a statutory mandate.

A decree-holder or recovery authority is not, as a matter of general law, required to exhaust the principal debtor's mortgaged property before proceeding against the guarantor. The court applied the Supreme Court ruling in State Bank of India v. Indexport Registered and treated the contrary view as overruled. A decision relied on by the petitioner was distinguished because it turned on a special statutory scheme that expressly required prior sale of the debtor's property, and no statutory mandate governed the present recovery proceedings. The petitioner could not insist on first proceeding against the company and its assets before enforcing recovery against the guarantor.

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Issues: Whether the creditor was bound to proceed first against the company and its mortgaged assets before initiating recovery against the guarantor and the guarantor's property.

Analysis: The governing principle applied was that a decree-holder or recovery authority is not compelled, as a matter of general law, to exhaust the remedy against the principal debtor's mortgaged property before proceeding against the guarantor. The decision relied on the binding Supreme Court authority in State Bank of India v. Indexport Registered and treated the contrary view as overruled. The decision cited by the petitioner was distinguished as arising under the special scheme of the Uttar Pradesh Public Moneys (Recovery of Dues) Act, 1972, where the statutory text expressly required prior sale of the principal debtor's property. No similar statutory mandate was shown to govern the present recovery proceedings.

Conclusion: The petitioner was not entitled to insist that recovery must first be proceeded against the company and its assets before proceeding against the guarantor. The challenge failed.

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