Dismissed

Sreejesh a. Nair, v. the Kerala State Financial Enterprises Ltd. (Ksfe)

Kerala HC16 Feb 2022WP(C)/3021/2022

Case brief

AI extract

What is this about?

Petitioner, a surety for a loan obtained by his former superior, filed a writ petition challenging recovery action against his salary. The court held that once the surety's liability is admitted, the creditor is justified in recovering the amount from the surety's salary under Section 12 of the Indian Contract Act, 1872, as the liability is co-extensive with the principal debtor's.

What did the court decide?

Writ petition dismissed; no relief granted to the petitioner regarding recovery from salary.

Sreejesh a. Nair, Vs the Kerala State… — Contract and Commercial Disputes | Kerala HC (2022)

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WP(C) NO. 3021 OF 2022 1

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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WEDNESDAY, THE 16TH DAY OF FEBRUARY 2022 / 27TH MAGHA, 1943

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WP(C) NO. 3021 OF 2022

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PETITIONER:

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SREEJESH A. NAIR,
AGED 38 YEARS

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S/O.T.V. AJAYAKUMAR, 'SHYAMNIVAS' KODUNGANOOR P.O., VATTIYOORKAVU P.O., THIRUVANANTHAPURAM 695 013.

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BY ADVS.
SHABU SREEDHARAN
JINSON OUSEPH
CHITRA VIJAYAN
SHYAM KUMAR M.P

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RESPONDENTS:

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1 THE KERALA STATE FINANCIAL ENTERPRISES LTD. (KSFE), REPRESENTED BY ITS MANAGING DIRECTOR, BHADRATHA, MUSEUM ROAD, P.B. NO. 510 THRISSUR 680 020.

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2 THE BRANCH MANAGER, KSFE VAZHUTHACAUD BRANCH, CENTRE PLAZA BUILDING, 2ND FLOOR, VAZHUTHACAUD P.O., THIRUVANANTHAPURAM 695 014.

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3 THE BRANCH MANAGER, KSFE SASTHAMANGALAM BRANCH, 2ND FLOOR, SOWPARNIKA TOWER, OPP. RKDNSS HSS SASTHAMANGALAM, THIRUVANANTHAPURAM 695 010.

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4THE REGIONAL DIRECTOR,
INDIAN COUNCIL FOR CULTURAL RELATIONS (ICCR), C2,
STREET C, ELANKOM GARDENS, VELLAYAMBALAM,
THIRUVANANTHAPURAM 695 010.

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BY ADV K.A.SALIL NARAYANAN, SC, R1 TO R3

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 16.02.2022, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:

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WP(C) NO. 3021 OF 2022 2

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JUDGMENT

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Dated this the 16^th day of February, 2022

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The petitioner, who is working as LD Clerk under the Indian Council for Cultural Relations (ICCR), has approached this Court seeking to command respondents 2 and 3 to proceed against the Principal Debtors Sri.Karthikeshan C. and Sri.Vijayakumar R. for recovering the outstanding balances in the loan accounts covered by Exts.P5 and P6 letters.

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The petitioner submits that he is a B.A Graduate having a family consisting of his mother, wife and two children. He is getting a salary of `41,719/- per month. One Karthikeshan C., who was the superior officer of the petitioner, obtained a loan from the 3^rd respondent. Under compulsion, the petitioner signed blank forms and stood as surety to the said Karthikeshan C. Subsequently, a case was registered against the said Karthikeshan C. for taking loan from KSFE using forged

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WP(C) NO. 3021 OF 2022 3

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documents. One Mr.Vijayakumar R. was also an accused in the said crime.

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The petitioner states that he has not availed any

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amount from respondents 2 and 3. The petitioner is shown as a surety for the said loans. The petitioner has not in fact stood as a surety. However, the petitioner was told by the 4^th respondent that 2^nd and 3^rd respondents issued letters to the 4^th respondent requesting to effect recovery of 20,000/- per month from the petitioner's salary and remit it to 2<sup>nd</sup> and 3<sup>rd</sup> respondents, till liability to the tune of 5 lakhs and `1,10,000/- due from the Principals are fully discharged. The petitioner is aggrieved by the said action.

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The petitioner would state that he has not availed any loan from the respondents. The petitioner is only a surety for the loan advanced to Mr.Karthikeshan C. The petitioner is finding it very difficult to meet all expenses of his family including huge EMIs of his own housing loan, educational expenses of children and treatment expenses in respect of his aged mother. The

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WP(C) NO. 3021 OF 2022 4

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respondents are proceeding to recover amount from the salary of the petitioner without taking steps, whatsoever to realise the outstanding from Karthikeshan C. and Vijayakumar R. This is highly illegal and arbitrary. Unless the respondents are directed to effect recovery from the Principals before taking any steps to recover it from the petitioner’s salary, the petitioner will be put to untold hardship and loss, contended the learned counsel for the petitioner.

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The learned Standing Counsel for the respondents filed a statement and contested the writ petition. The learned Standing Counsel pointed out that the petitioner has admitted that he has stood as a surety for the loan/financial facility availed by Sri.Karthikeshan C. The petitioner therefore cannot wriggle out of the liability contending that the creditor should first seek to recover the amount from the principal debtor.

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The learned Standing Counsel pointed out that the liability of the surety is co-extensive with that of the Principal Debtor in view of Section 12 of the Indian Contract Act, 1872.

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WP(C) NO. 3021 OF 2022 5

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The petitioner had undertaken to discharge the liability of Sri.Karthikeshan C., where the loan amount is `5 lakhs. The petitioner has also stood as a surety to the prized money availed by one Sri.Vijayakumar R. The respondents have requested the employer of Sri. Karthikeshan C. to recover the terminal benefits and other amounts payable to Sri.Karthikeshan C. so as to secure the interest of the KSFE. In the circumstances, the writ petition is without any merit, contended the learned Standing Counsel.

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I have heard the learned counsel for the petitioner

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and the learned Standing Counsel representing the respondents.

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The case of the petitioner is that he was forced to

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stand as a surety to Mr. Karthikeshan C., who was his superior officer. Blank papers were got signed by the petitioner. Further case of the petitioner is that the respondents are proceeding against the petitioner without making any attempt to realise the debt amount from the principal debtor.

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WP(C) NO. 3021 OF 2022 6

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As long as the signature of the petitioner is admitted in the Guarantee Forms, the petitioner cannot be heard to contend that he is not aware of the transaction and he is forced to be a surety. If the petitioner alleges fraud or manipulation of documents, the petitioner has to approach appropriate Courts of law for remedying his grievances.

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As far as the allegation of the petitioner that the respondents are not taking any steps to realise the amount from the Principal Debtor, a Statement filed by the learned Standing Counsel would show that they have received information that Sri.Karthikeshan C. stands terminated from service and the respondents have requested the employer of Sri.Karthikeshan C. to withhold terminal benefits and other amounts payable to Sri.Karthikeshan C.

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The respondents have already proceeded against the Principal Debtor. In view of Section 12 of the Indian Contract Act, 1872, the liability of the petitioner is co-extensive with that of the Principal Debtors. Therefore, respondents 1 to

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WP(C) NO. 3021 OF 2022 7

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3 will be justified in proceeding to recover the amount from the

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salary of the petitioner.

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The writ petition is therefore without any merit and it is

dismissed.

Sd/-

N.NAGARESH

JUDGE

hmh

WP(C) NO. 3021 OF 2022 8

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APPENDIX OF WP(C) 3021/2022

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PETITIONER EXHIBITS

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`Exhibit P1`	`THE TRUE COPY OF` `PETITIONER DATED` `DECEMBER 2021.`	`THE SALARY SLIP OF THE` `NIL FOR THE MONTH OF`
`Exhibit P2`	`TRUE COPY OF THE` `ISSUED BY THE IND` `20.11.2021.`	`LOCAL CERTIFICATE` `IAN BANK DATED`
`Exhibit P3`	`TRUE COPY OF THE` `2020 OF MUSEUM PO` `THIRUVANANTHAPURA`	`FIR IN CRIME NO. 738 OF` `LICE STATION,` `M DATED 1.10.2020.`
`Exhibit P4`	`TRUE COPY OF THE` `THE 3RD RESPONDEN`	`COMPLAINT PREFERRED BY` `T DATED 29.9.2020.`
`Exhibit P5`	`THE TRUE COPY OF` `18.08.2021 ISSUED`	`THE LETTER DATED` `BY THE 2ND RESPONDENT.`
`Exhibit P6`	`THE TRUE COPY OF` `22.10.2021 ISSUED`	`THE LETTER DATED` `BY THE 3RD RESPONDENT.`
`Exhibit P7`	`THE TRUE COPY OF` `EMAIL COMMUNICATI` `SENT BY THE PETIT` `RESPONDENT.`	`THE SCREEN SHOT OF` `ON DATED 28.12.2021` `IONER TO THE 4TH`
`RESPONDENT’S EXH`	`IBITS`
`ANNEXURE R1 A`	`TRUE COPY OF TH` `FORM`	`E SURETY APPLICATION`

Sreejesh a. Nair, v. the Kerala State Financial Enterprises Ltd. (Ksfe)

Case brief

What is this about?

What did the court decide?

Sreejesh a. Nair, v. the Kerala State Financial Enterprises Ltd. (Ksfe)

Case brief

What is this about?

What did the court decide?

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