Liability of guarantor

2023 CLC 638 ISLAMABAD Judicial Precedent

S.128Liability of guarantorWord "co-extensive"ScopeLiability of guarantor under S.128 of Contract Act, 1872, is co-extensive with that of principal debtorGuarantor cannot be made to pay for principal debtor's liability which does not arise from contract of guarantee

Word "co-extensive" in S.128 of Contract Act, 1872 denotes extent of liability and can relate only to quantum of principal debt

Guarantor is liable to creditor for principal debtor's liability under an agreement or instrument referred to in the contract of guarantee.

2018 CLD 250 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 2(c), 2(d) & 7Contract Act (IX of 1872) Ss. 126, 127 & 128Suit for recoveryContract of guaranteeSurety, principal debtor and creditorConsideration for guaranteeSurety's liabilityScope of terms "customer" and "obligation" under Financial Institutions (Recovery of Finances) Ordinance, 2001Liability of guarantorScope

Liability of guarantor was co-extensive with that of a principal debtor unless in the letter of guarantee, it was provided otherwise

Any promise made, thing done for the benefit of the principal debtor, under law, was sufficient consideration as far as surety was concerned for giving guarantee

Contract for guarantee was a contract to perform a promise and/or to discharge a liability of a third person in case of occurrence of default by principal debtor.

2013 CLC 1310 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 14(5A) & 99Constitution of Pakistan, Arts.62 & 63Loan defaulterLiability of guarantorNomination papers filed by respondent candidate were accepted by Returning Officer during scrutiny

Appellant bank preferred direct appeal before High Court alleging that respondent candidate was wilful defaulter of loan

Plea raised by respondent was that he was guarantor and not principal debtor

Validity

Decree was passed against respondent and the same had been upheld by Supreme Court but it remained unsatisfied

Liability of guarantor was co-extensive with that of principal debtor, therefore, respondent was liable to pay decretal amount

Respondent did not disclose fact of passing of decree against him in his nomination papers

Respondent was not only adjudged defaulter in terms of S.14 (5A) of Representation of the People Act, 1976, but was also guilty of concealment of facts

Candidature of respondent was hit by provisions of Arts.62 & 63 of the Constitution read with S.14 (5A) of Representation of the People Act, 1976

Election Tribunal directed to delete name of respondent from list of validly nominated candidates of the constituency and his nomination papers were rejected

Appeal was allowed accordingly.