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NATIONAL CONSTRUCTION LTD. versus STANDARD INSURANCE CO. LTD.


Sections 126 and 128 guarantee guarantee liability, subject to the coordination of the principal indemnity, but in the absence of agreement to the contrary if the default is proved to be the default, in the case of the plaintiff suing the principal Failure will not cause defeat. Do not end your treatment against it

1984 C L C 286

[Karachi]

Before lbadatyar Khan, J

NATIONAL CONSTRUCTION LTD,‑Plaintiff.,

versus

STANDARD INSURANCE Co. LTD.‑Defendant

Suit No. 552 of 1981, decided on 5th October, 1983.

(a) Contract Act (IX of 1872) ‑

‑‑Ss. 126 & 128‑Surety‑Liability‑Liability of surety, held, co extensive with that of principal debtor but in absence of a contract to contrary in case of proved default, plaintiff's action against surety would not be defeated because of failure to sue principal debtor having not exhausted his remedies against him.

A I R 1919 Lah. 355 ; A I R 1919 Sind 103 ; P L D 1982 Kar. 577 and P L D 1968 S C 83 ref.

(b) Contract Act (IX of 1872)‑

‑‑Ss. 126 & 128‑Surety‑Liability‑Expression liability of surety co‑extensive with that of principal debtor'‑Context in which expressions used explained‑Existence of liability in first instance, held, must be established and‑,liability cannot occur until there exists a default or failure or breach on part of principal debtor‑Until--such time that a liability against principal debtor determined any action against surety, held further would be premature.

(c) Civil Procedure Code (V of 1908)‑

‑‑O. I, r. ifs‑‑‑Contract Act (IX of 1872), Ss. 126 & 128‑Liability of surety and principal debtor co‑extensive‑Surety's application for joining principal‑debtor to be allowed to avoid multiplicity of legal action and possibly contradictory findings on same issues.

A I R 1948 Nag. 123 ref. '

(d) Contract Act (1X of 1872)‑

‑‑Ss. 126 & 128‑‑Surety‑Liability..‑Proved default of principal debtor, held, must pre‑exist before a right of creditor to enforce his right against surety would co‑exist with principal debtor.

(e) Civil Procedure Code (V of 1908)‑

‑‑‑O. 1, r. 10‑Contract Act (IX of 1872), Ss. 126 &.128‑Surety‑Liability‑‑Impleading of principal debtor, as necessary party Neither agreed failure nor adjudicated default on part of principal- debtor existing‑Impleading principal debtor as necessary party in suit against surety, held, not only proper but necessary.

A I R 197,7 Goa 4 ; Montgomery v. F. O. Y. (1895) 2 G 8 321 ; A I R 1929 Mad. 443 ; P L D 1965 Kar. 632 ; P L D 1965 Dacca 56 and Pakistan v. Abdul Wall Khan P L D 1975 S‑ C 463 ref.

Mansoorul Arfin

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