ORDER
T.S. Doabia, J.
The brief facts which have led to the filing of this petition be noticed as under :-
1. A money suit was filed by Canara Bank. It was filed against all the parties who figure in this petition. M/s S. D. Enterprises who figure as respondent No. 5 in this petition was the principal borrower. Manohar Singh who has since died and who is represented by respondents Nos. 1, 2, 3 and 4 also figured as defendant as surety! The present petitioner also figured as defendant in the aforementioned suit as surety. The suit filed by Canara Bank was decreed. Manohar Singh paid the decretal amount. After the payment was made, Manohar Singh filed a Civil Suit claiming reimbursement from the present petitioner as also from M/s S. D. Enterprises. In this an application was preferred for deletion of the name of the present petitioner/defendant. It was alleged that Manohar Singh is entitled to reimbursement only from the principal borrower and not from the co-surety. This contention did not find favour with the trial Court. The contention raised by the present petitioner was rejected. It is against the above order the present revision petition has been filed.
2. The learned counsel for the petitioner places reliance on the provision of Section 140 of the Contract Act. He submits that the amount can be recovered only from the principal debtor and not from the surety. The learned counsel for the respondent has however placed reliance on Sections 69 and 70 of the Contract Act. According to him the amount can be recovered even from a co-surety also. Before noticing further the factual and legal submission, it would be apt to note the relevant statutory provisions i.e. Sections 69, 70 and 140 of the Contract Act. These reads as under :
“Section 69. Reimbursement of person paying money due by another, in payment of which he is interested. – A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other.”
Section 70. Obligation of person enjoying benefit of non-gratuitous act. – Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.”
Section 140. Rights of surety on payment or performance. – Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor.”
3. A bare reading of Section 140 of the Act indicates that surety has a right against a principal borrower only.
4. Section 140 of the Contract Act embodies the general rule of equity expounded by Sir Samuel Romilly as counsel and accepted by the Court of Chancery in Crythorne v. Swinburne, 1807 14 Ves 160 namely : ‘The surety will be entitled to every remedy which the creditor has against the principal debtor, to enforce every security and all means of payment to stand in the place of the creditor; not only through the medium of contract, but even by means of securities entered into without the knowledge of the surety having a right to have those securities transferred to him, though there was no stipulation for that; and to avail himself of all those securities against the debtor. This right of a surety also stands, not upon contract but upon a principles of natural justice.”
5. Section 140 expressly lays down that the surety upon payment of all that he is liable for is immediately invested with all the rights which the creditor had against the principal debtor. The condition laid down by the section for this right to arise is the payment by the surety of all that he is liable for, and not the payment of all that may be due to the creditor who holds the securities. A surety for a part only of a debt is on payment of that part entitled pro tanto to the security held by the creditors has cover for the debt as a whole.”
6. A surety thus gets subrogated to all the remedies against principal debtor but not against a co-surety. Even Sections 69 and 70 would confer no right on the surety to claim refund from co-surety. If there is a direct contractual relationship between the parties, Section 69 of the Contract Act, shall not be applicable. See : Subbakke Shettithi v. Anthamma Shettithi, AIR 1934 Mad. 628.
Sections 69 and 70 of the Contract Act contemplate persons who not being themselves bound to pay, do it under circumstances which give them a right to recover from the other side. This is not the position in this case. The petitioner and plaintiff, respondents were under an obligation to pay and these sections would not be applicable.
I am of the view that Section 140 of the Contract Act provides a remedy to a surety against the principal debtor alone. If it was otherwise then it would set into motion an endless chain reaction whereby one surety would be chasing and litigating against the other. By way of illustrations if respondent recovers the money from the petitioner (Both respondent and petitioner are sureties) then a counter action would be maintainable by the petitioner. A surety would be pursuing another surety and a vicious circle would come into existence. This is not the intention of law.
7. In view of the above discussions, this petition is allowed. The name of the petitioner shall stand deleted from the array of defendants. There would be no order as to costs.