1992 (5) TMI 200

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....nd conditions were accepted by all the three. Proprietor of defendant No. 1 executed a demand promissory note on 10-2-1981 in favour defendants Nos. 2 and 3 who endorsed the same in favour of plaintiff. An agreement for cash credit was executed by Proprietor of defendant No. 1. Defendans Nos. 2 and 3 also executed a deed of guarantee on the same day; Proprietor operated the cash credit transaction. However, he did not pay the dues for which suit was filed to recover ₹ 1,76,193.31 paise with pendente lite and future interest. 3. Defendants Nos. 1 and 3 filed at joint written statement. They did not specifically dispute assertions of plaintiff. Since the industry was sick they requested for payment by instalments. 4. Defendant No. 2 i....

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....ayment of dues by instalments does not absolve the guarantors from their liability. He relied upon the decision reported in AIR 1969 SC 297 : (1969 All LJ 475), The Bank of Bihar Ltd. v. Dr. Damodar Prasad, in support of his contention in respect of liability of a guarantor. His contention is that solvency of the debtor is not a ground for the surety or guarantor to avoid payment. 8. Under Section 128 of the Contract Act, save as provided in the contract, liability of surety is co-extensive with that of the principal debtor. His liability is immediately. It is not deferred until the creditor exhausted his remedies against the principal. This has been observed in the aforesaid decision. It was further observed: ".........The Court re....