Independent guarantee liability defeats Section 68 bar where creditor sues on personal obligation, not mortgage money.

A suit on an overdraft liability supported by a promissory note and independent guarantees was not treated as a mortgage suit, so Section 68 of the Transfer of Property Act did not apply. The mortgage created by the principal debtor was not the foundation of the claim against the guarantors; the action rested on an independent personal liability. The Court reaffirmed that a surety's liability is coextensive with that of the principal debtor under Section 128 of the Contract Act, and the creditor need not first exhaust remedies against the principal debtor before suing the surety. The suit against the guarantors was therefore maintainable, and the challenge failed.

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Issues: Whether a suit founded on a promissory note and guarantees could be treated as a mortgage suit so as to attract Section 68 of the Transfer of Property Act, and whether the creditor was bound to exhaust the mortgage security or remedies against the principal debtor before proceeding against the guarantors.

Analysis: The claim was based on an overdraft liability evidenced by a promissory note and supported by independent agreements of guarantee. On construction of the pleadings, the suit was not one by a mortgagee seeking mortgage money. The mortgage created by the principal debtor was not the foundation of the action against the guarantors. Section 68 of the Transfer of Property Act applies only to a suit by a mortgagee for recovery of mortgage money, and it was held inapplicable where the personal liability arises from an independent transaction. The Court also applied the settled principle that the liability of a surety is coextensive with that of the principal debtor under Section 128 of the Contract Act, and that a creditor is not bound to exhaust remedies against the principal debtor before suing the surety. The reliance placed on the case involving impairment of security was distinguished because there was no loss of security due to the creditor's negligence.

Conclusion: The suit was maintainable against the guarantors and Section 68 of the Transfer of Property Act did not bar the action. The appeal failed and was dismissed.

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