Co-extensive guarantor liability under SARFAESI allows enforcement without first exhausting remedies against the borrower.

A secured creditor may enforce security against a guarantor without first exhausting remedies against the borrower, because the guarantor's liability is co-extensive with that of the principal debtor unless the contract provides otherwise. The SARFAESI framework permits action under Sections 13(2), 13(4) and 14 for recovery of secured debt, so the challenge to enforcement against the guarantor failed. Writ jurisdiction under Article 226 should ordinarily not be invoked where the Act provides an efficacious statutory remedy under Sections 17 and 18, with civil court interference barred by Sections 34 and 35. The writ petition ought not to have been entertained and the interim restraint was unsustainable.

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Issues: (i) Whether a secured creditor can proceed against the guarantor under the SARFAESI Act without first exhausting remedies against the borrower; (ii) Whether the High Court should entertain a writ petition under Article 226 when an efficacious statutory remedy is available under the SARFAESI Act.

Issue (i): Whether a secured creditor can proceed against the guarantor under the SARFAESI Act without first exhausting remedies against the borrower.

Analysis: The liability of the surety or guarantor is co-extensive with that of the principal debtor unless the contract provides otherwise. The secured creditor is not required to postpone enforcement against the guarantor until proceedings against the borrower are exhausted. The statutory scheme of the SARFAESI Act permits enforcement of security interest and recourse against the guarantor for recovery of secured debt. The borrower's default and the existence of security in favour of the creditor justified action under Sections 13(2), 13(4) and 14 of the Act.

Conclusion: The secured creditor was entitled to proceed against the guarantor, and the challenge to such action failed.

Issue (ii): Whether the High Court should entertain a writ petition under Article 226 when an efficacious statutory remedy is available under the SARFAESI Act.

Analysis: The SARFAESI Act creates a complete recovery mechanism with remedies under Section 17 and further appeal under Section 18, and civil court interference is barred by Sections 34 and 35. In fiscal and recovery statutes, writ jurisdiction is ordinarily not to be invoked where the statute provides an effective remedy. The case did not disclose any exceptional ground warranting bypass of the statutory forum, and the High Court ought to have insisted on exhaustion of the remedy under the Act before granting interim restraint.

Conclusion: The writ petition ought not to have been entertained, and the interim restraint order was unsustainable.

Final Conclusion: The impugned order was set aside, and the bank was permitted to proceed under the SARFAESI Act against the secured asset and the guarantor.

Ratio Decidendi: A secured creditor may enforce its rights against a guarantor without first proceeding exhaustively against the borrower, and writ jurisdiction should ordinarily not be exercised where a special statute provides an efficacious and complete remedy for recovery and redressal.

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