Sampuran Singh vs Haryana Financial Corporation

J.M. Tandon, J.

Chander Bhanrespondent raised a loan of Rs 29,000/ from Haryana Financial Corporation (respondent No. 1) for purchase of a vehicle. The petitioner and Lakhmi Chand respondent No. 3 stood as guarantors for the repayment of the loan taken by respondent No. 2. They pledged their immovable property with the Haryana Financial Corporation. Chander Bhan having not repaid the loan, proceedings for the recovery of the amount were initiated. The Corporation issued recovery certificate under the Haryana Public Moneys (Recovery of Dues) Act, 1979, (hereafter the Act) against the petitioner and Lakhmi Chand respondent No. 3. The petitioner and respondent No. 3 filed a suit for permanent injunction against the Corporation and Chander Bhan wherein they prayed for a temporary injunction restraining the Corporation from effecting the recovery from them during the pendency of the suit. The trial Court issued the temporary injunction prayed for which has been vacated by learned District Judge, Faridabad, vide order dated January 16, 1984, in an appeal filed by the Corporation against the order of the trial Court. The petitioner has assailed the order of the Appellate Court in this revision.

The learned counsel for the petitioner has argued that proceedings for the recovery of the loan amount cannot be initiated against him and respondent No. 3 till the remedies are exhausted against Chander Bhan who is the principal loanee. Reliance has been placed on section 4 of the Act and on the decision in C.R. No. 2461 of 1983 decided on February 27, 1984. The contention is without merit. The term ''defaulter'' is defined in section 2 of the Act. The petitioner being the surety is also covered by the term ''defaulter''. There is nothing to suggest in section 4 of the Act that the recovery proceedings cannot be initiated against the surety as a defaulter before exhausting the remedies against the principal loanee. The ratio of the decision C.R. No. 2461 of 1983 decided on February 27, 1984, cannot be justifiably pressed in support of the proposition canvassed by the learned counsel for the petitioner.

In the result, the revision fails and is dismissed with no order as to costs.