Order Sheet

IN THE HIGH COURT OF SINDH, BENCH AT SUKKUR

I^st Appeal No. D – 22 of 2018

Before :

Mr. Justice Muhammad Shafi Siddiqui

Mr. Justice Rasheed Ahmed Soomro

Date of hearing: 05.12.2018.

Mr. Abdul Hafeez Irfan, Advocate for the appellant.

O R D E R

MUHAMMAD SHAFI SIDDIQUI, J. – This petition is arising out of an order passed in Banking Suit No.52 of 2012 filed by the appellant against creditor bank M/s Habib Bank Limited.

2. Leave was filed by the respondents, which was granted.

3. The appellant filed affidavit-in-evidence and he stated to have been cross-examined, which cross-examination is available at page 115 (Annexure ‘F’), whereas, the witness of the respondents did not appear for the purpose of cross-examination and, hence, his examination-in-chief / affidavit-in-evidence was scored off from consideration.

4. The issues were framed and on 19.04.2018, the Suit was dismissed.

5. It was a case of the appellant that the amount has been wrongly deducted from another account of the surety / appellant, which is not permissible under the law and that no notice was given before deduction. He considered the act of deduction from another account in another branch of Habib Bank Limited as not permissible since no loan was obtained from the other branch.

6. We have heard the learned counsel and perused the material available on record.

7. The only point as raised by the appellant in the instant case is that the outstanding amount of the principal borrower was deducted from the account of surety i.e. appellant from another account which he is maintaining in another branch of the same bank i.e. Habib Bank Limited.

8. There is no cavil to this proposition that the appellant stood as surety in terms of Section 126 of the Contract Act and, hence, his liability as being surety is co-extensive with that of the principal debtor i.e. principal borrower. The appellant is, thus, liable for all the outstanding of the principal debtor in pursuance of the guarantee that he executed for the repayment of the amount mentioned therein.

9. Section 128 of the Contract Act provides that the liability of the surety is co-extensive with that of the principal debtor unless otherwise provided by the contract. This liability is enforceable under the law and the principal borrower was also liable for the repayment of the outstanding loan. The surety has guaranteed the performance of an agreement which principal borrower failed and, hence, deduction of the amount from surety’s account is within the frame of the guarantee that he executed. Though in the cross-examination, he has admitted to have received the loan amount from Habib Bank Limited, Ghotki and that he had not paid the loan amount to the concerned bank within time, however, he also stated that he stood guarantor of the haris who obtained loan. The loan application was in his name and the pass book, khasra girdwari also stood in his name duly mortgaged with the bank. The finance agreement was also executed in his name and so also in the names of haris. This evidence is neither here nor there to benefit the appellant.

10. We do not see any reason to interfere in the order passed by the Banking Court No.I, Sukkur at Sukkur in Suit No.52 of 2012, which is impugned in this appeal and accordingly, this appeal was dismissed by a short order dated 05.12.2018 and these are the reasons for the same.

J U D G E

Abdul Basit