When A Guarantee Is Sought To Be Enforced, Ordinarily, The Same Must Be Done Through A ‘Court’ Having Appropriate Jurisdiction

1.         A PROVISION SEEKING TO BAR JURISDICTION OF A CIVIL COURT REQUIRES STRICT INTERPRETATION                                 

            Hon’ble Supreme Court in Karnataka State Financial Corporation Vs N. Narasimahaiah & Ors {2008 AIR 1797, 2008 (5) SCC 176; Decided on 13/03/2008} has, inter alia, observed as follows.

 

“12. If special provisions are made in derogation to fakeapwatch.com the general right of a citizen, the statute, in our opinion, should receive strict construction. “(emphasis supplied)

 

Further, Hon’ble Supreme Court in Dwarka Prasad Agarwal v. Ramesh Chander Agarwal, [(2003) 6 SCC 220] has, inter alia, observed as follows.

 

“22. Bar of jurisdiction of a civil court is not to be readily inferred. A provision seeking to bar jurisdiction of a civil court requires strict interpretation. (emphasis supplied)

 

ORDINARILY, WHEN A GUARANTEE IS SOUGHT TO BE ENFORCED, THE SAME MUST BE DONE THROUGH A ‘COURT’ HAVING APPROPRIATE JURISDICTION                                     .

2.         Hon’ble Supreme Court in Karnataka State Financial Corporation Vs N. Narasimahaiah & Ors {2008 AIR 1797, 2008 (5) SCC 176; Decided on 13/03/2008} has, inter alia, observed as follows.

 

“14. Section 29 of the Act nowhere states that the corporation can proceed against the surety even if some properties are mortgaged or hypothecated by it. The right of the financial corporation in terms of Section 29 of the Act must be exercised only on a defaulting party. There cannot be any default as is envisaged in Section 29 by a surety or a guarantor. The liabilities of a surety or the guarantor to repay the loan of the principal debtor arises only when a default is made by the latter.

 

“18. Apart from the defences available to a principal borrower under the provisions of the Indian Contract Act, a surety or a guarantor is entitled to take additional defence. Such additional defence may be taken by the guarantor not only against the corporation but also against the principal debtor. He, in a given situation, would be entitled to show that the contract of guarantee has come to a not. Ordinarily, therefore, when a guarantee is sought to be enforced, the same must be done through a court having appropriate jurisdiction. In the absence of any express provision in the statute, a person being in lawful possession cannot be deprived thereof by reason of default on the part of a principal borrower.” (emphasis supplied)

 

Thus, Hon’ble Supreme Court held that ordinarily, therefore, when a guarantee is sought to be enforced, the same must be done through a court having appropriate jurisdiction.

DRT Has No Jurisdiction

























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