The guarantor also cannot insist that the creditor must first exhaust all remedies against the principal debtor before recovering the debts from the surety holders, says the apex court
New Delhi: The guarantor of a loan is liable to pay it if the debtor fails to clear it, the Supreme Court has ruled, while maintaining that financial institutions too cannot act like property dealers in recovering the debts, reports PTI.
A bench of justices BS Chauhan and Dipak Misra also said the guarantor cannot insist that the creditor must first exhaust all remedies against the principal debtor before recovering the debts from the surety holders.
"There can be no dispute to the settled legal proposition that in view of the provisions of Section 128 of the Indian Contract Act, 1872, the liability of the guarantor / surety is co-extensive with that of the debtor.
"Therefore, the creditor has a right to obtain a decree against the surety and the principal debtor.
"The surety has no right to restrain execution of the decree against him until the creditor has exhausted his remedy against the principal debtor for the reason that it is the business of the surety/ guarantor to see whether the principal debtor has paid or not," said Justice Chauhan, writing the judgement for the bench.
The apex court gave the ruling on an appeal by one Ganga Kishun, who had stood as a guarantor to a bank loan, raised by one Ganga Prasad, who had died without clearing it. Ganga Kishun had come to the apex court against the Uttar Pradesh government's decision to recover the loan arrears from him after the death of principal debtor Ganga Prasad.
While dismissing Ganga Kishun's appeal, the apex court, however, faulted the government's decision to auction Ganga Kishun's entire stretch of land for Rs25,000 to recover an arrear worth Rs8,500 only and not confining the auction to only 1/3rd of the land which could have fetched the arrears.
According to the Janata Party chief, poverty cannot be the criteria for giving quotas as per the government rules and for this reason, Brahmins, Muslims and Christians, who are poor, cannot qualify for quotas
New Delhi: Janata Party chief Dr Subramanian Swamy on Tuesday condemned the government's decision to challenge the Andhra Pradesh High Court order quashing the proposed 4.5% reservation to minorities within the other backward class (OBC) quota, reports PTI.
"I condemn the decision of the Union government to file a special leave petition in the Supreme Court against the order of the AP High Court quashing quotas for minorities proposed by government," Dr Swamy said in a statement.
Dr Swamy said quotas for backward classes are only for those who were never ruling classes in India whereas under the government's proposal they are being extended to classes which have no socially imposed disabilities.
"Poverty, therefore, cannot be the criteria for giving quotas. For this reason, Brahmins who are poor cannot qualify for quotas. So, too Muslims and Christians since they had been ruling classes for centuries," he said in the statement.
Law Minister Salman Khurshid has said the High Court order on minority sub-quota is not a setback to the Centre which has decided to challenge it in the Supreme Court.
The government proposes to create a 4.5% sub-quota for notified minority groups out of the 27% reservation meant for OBCs.
POSCO has completed construction of its first steel plant, a 0.45 million tonne per annum continuous galvanised line facility in Maharashtra even as the steel company is awaiting clearances for its $12 billion plant in Orissa
New Delhi: Still awaiting clearances to begin work on its much-hyped $12 billion project in Orissa, South Korean steel major POSCO has completed construction of its first steel mill in India at a cost of $240 million.
"POSCO has completed construction of its first steel plant in India -- a 0.45 million tonne per annum continuous galvanised line (CVL) facility at Maharashtra," a company official, who did not wish to be quoted, told PTI.
"The facility was inaugurated by Posco-India chairman and managing director Yong-Won Yoon yesterday and a brief test run was done. It will be fully operationalised as soon as a minor clearance, which is pending, is given by the state government," the official added.
The project entailed a total investment of $240 million (about Rs1,339.35 crore), the official said adding the hot galvanised plate facility would cater to the high-end galvanised coil needs of automakers in and around Pune besides those of home appliances.
The world's fourth largest steelmaker is set to start production any day and supply products to automakers in Pune.
Maharashtra is home to a host of automobile plants including that of Volkswagen, Tata Motors, Mahindra & Mahindra, General Motor, Audi, Mercedes Benz, Skoda, Premier Auto and Bajaj Auto.
POSCO has also plans to set up an electric steel plate facility and a cold-rolled mill in Maharashtra.
About much-hyped $12 billion ( around Rs52,000 crore) plant at Jagatsingpur in Orissa, the official said work would begin on the project soon after the state government hands over the required land.
In a setback to Posco's Orissa project, the country's single largest foreign direct investment (FDI), the National Green Tribunal on 30th March had suspended the green clearance granted on 31 January 2011 to the much-awaited project. The tribual directed the Ministry of Environment and Forests (MoEF) to review afresh the clearance.
The Tribunal pointed out that memorandum of understanding between the Orissa government and Posco states that the project is for steel production of 12 million tonnes per annum (MTPA) but the environment impact assessment (EIA) report has been prepared only for 4 MTPA in the first phase.
The Tribunal decision came close on the heels of Prime Minister Manmohan Singh assuring South Korean President Lee Myung-bak in Seoul earlier this year that the project will be implemented and there was progress on it.
The steel plant, proposed at Jagatsinghpur district in Orissa, is hanging fire for over six years now due to land acquisition hurdles. It requires 4,004 acres of land for it.