Surety liability is co-extensive: creditor may proceed against the guarantor without first exhausting remedies against the borrower.

A creditor is not required to exhaust remedies against the principal borrower or secured assets before proceeding against the guarantor, because the surety's liability is co-extensive with that of the principal debtor unless the contract provides otherwise. The creditor may pursue the borrower and guarantor in parallel, and the doctrine of election does not impose a prior-remedy requirement. On that basis, supervisory interference under Article 227 to stay proceedings before the Debts Recovery Tribunal was inconsistent with the settled principle on surety liability and was not justified.

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Issues: Whether the creditor was bound to exhaust its remedy against the principal borrower before proceeding against the guarantor, and whether the High Court was justified in staying proceedings before the Debts Recovery Tribunal under its supervisory jurisdiction.

Analysis: The liability of the surety is co-extensive with that of the principal debtor unless the contract provides otherwise. A creditor is not required, as a condition precedent, to proceed first against the borrower or to exhaust remedies against secured assets before suing or proceeding against the guarantor. The legal position is that the creditor may choose the forum and the remedy available against the principal debtor and the surety, and the doctrine of election does not compel a prior exhaustion of remedies against the borrower. In that view, the High Court's interference under Article 227 to stay the Tribunal proceedings was inconsistent with the settled principle governing surety liability.

Conclusion: The guarantor could be proceeded against without first exhausting remedies against the principal borrower, and the High Court was not justified in staying the Tribunal proceedings.

Final Conclusion: The appeal succeeded and the stay granted by the High Court was set aside, leaving the creditor free to pursue the guarantor in parallel with proceedings against the borrower.

Ratio Decidendi: A creditor is not bound to exhaust remedies against the principal debtor before proceeding against the surety, because the surety's liability is co-extensive and enforceable independently unless the contract provides otherwise.

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