Law: Contract Act, 1872

Section: 126,127,128,145,2(d),124,140

Law: Contract Act, 1872

Section: 126,127,128,145,2(d),124,140

Law: Companies Ordinance, 1984

Section: 318

Civil Procedure Code (V of 1908)-------O. VII, R.2---Contract Act (IX of 1872), Ss.2(d), 126, 127, 128 & 145---Suit for recovery of amount---Contract of guarantee, consideration for---Liability of surety---Surety's right to indemnity---Defendant/borrower obtained loan from bank and the plaintiff stood surety to the repayment of said loan to the bank---According to letter of lien, plaintiff/surety took to repay the loan amount with interest accrued thereto and he also authorized the bank to appropriate from his account in the same bank, any amount that could be necessary to adjust the loans taken by the borrower, without any reference to the plaintiff/surety---Borrower having failed to repay amount of loan to bank, same was recovered/adjusted by the bank from account of plaintiff surety---Plaintiff filed suit for recovery of said amount against defendant borrower---Said suit was dismissed by the Trial Court, but lower Appellate Court set aside and decree passed by the Trial Court and decreed the suit---Validity---Recovery of amount having been made from the account of plaintiff, in the light of the terms and conditions of the letter of lien, proceedings between the bank and plaintiff were blessed with statutory sanction as provided under S.126 of Contract Act, 1872---Plaintiff being surety had paid loan amount to the bank on failure of borrower to pay the same---Plaintiff had legal right to demand the return of amount which he paid/adjusted towards the payment of loan obtained by the borrower---Under provisions of S.145 of Contract Act, 1872 borrower had to indemnify the surety and the surety was entitled to recover from the borrower the amount which had been paid by the surety---Right of plaintiff had sufficiently been protected under the law---Surety was entitled for the amount paid by him to the bank as surety of the borrower---Defendant borrower was bound to pay the disputed amount to the plaintiff surety---Judgment and decree passed by lower Appellate Court, which was lawful and not suffering from any illegality, irregularity and jurisdictional error, was maintained. UBL v. Shahryar Textile Mills and others 1996 CLC 106; (Raja) Jagannath Bakhsh Singh v.…

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