| Case ID |
20c6c1ea-ff27-4eb9-9e85-d7bd7d2720c8 |
| Body |
View case body. Login to View |
| Case Number |
Civil Petition No. 233-L of 2003 |
| Decision Date |
Aug 04, 2004 |
| Hearing Date |
|
| Decision |
The Supreme Court dismissed the petitioner's appeal against the Lahore High Court's decision, which had denied the petitioner's objections in execution proceedings initiated by the Bank for recovery of a loan amounting to Rs.38,51,238.70. The petitioner, who was a guarantor, argued that recovery should first be sought from the principal debtor before proceeding against him. The Court held that the liability of the guarantor is coextensive with that of the principal debtor under Section 128 of the Contract Act, 1872. The Court emphasized that the guarantor cannot avoid responsibility by insisting that the creditor first pursue the principal debtor. The petition was deemed to lack merit, and leave to appeal was refused. |
| Summary |
This case addresses the liability of a guarantor in loan recovery proceedings in Pakistan. The petitioner, Rafique Hazquel Masih, contested the execution of a decree against him by Bank Alfalah Ltd. for a loan that was primarily secured by his guarantee. The Supreme Court of Pakistan ruled that the liability of a guarantor is equal to that of the principal debtor, as per Section 128 of the Contract Act, 1872. The Court clarified that a guarantor cannot demand that the bank first pursue the principal debtor before initiating recovery actions against him. This case is significant for understanding the enforceability of guarantees and the rights of financial institutions in recovery processes. It highlights the importance of clear contractual obligations and the legal framework surrounding financial guarantees in Pakistan. The decision reinforced existing legal principles governing the relationship between guarantors and creditors, ensuring that guarantees are honored in accordance with contractual commitments. This case is relevant for legal practitioners, financial institutions, and individuals involved in loan agreements, providing clarity on the obligations of guarantors under Pakistani law. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Not available
|
| Judges |
FAQIR MUHAMMAD KHOKHAR,
TASSADUQ HUSSAIN JILANI
|
| Lawyers |
Ch. Muhammad Amin Javed,
Mahmud-ul-Islam,
Syed Ali Zafar,
Tanvir Ahmed
|
| Petitioners |
RAFIQUE HAZQUEL MASIH
|
| Respondents |
others,
BANK ALFALAH LTD.
|
| Citations |
2005 SLD 1535,
2005 CLD 95
|
| Other Citations |
1994 PSC 751,
AIR 1969 SC 297,
1981 CLC 89,
PLD 1982 Kar. 577,
1998 CLC 1152,
2000 CLC 85,
2000 CLC 451
|
| Laws Involved |
Financial Institutions (Recovery of Finances) Ordinance, 2001,
Contract Act, 1872,
Constitution of Pakistan, 1973
|
| Sections |
19,
128,
185(3)
|