Moot Court New

BEFORE THE HON’BLE SUPREME COURT OF INDIA
UNDER ARTICLE 133 OF CONSTITUTION OF INDIA
IN THE MATTER OF
BANK OF BIHAR ….
PETITIONER
V.
DAMODAR PRASAD .…
RESPONDENT
WRITTEN SUBMISSION ON BEHALF OF THE RESPONDENTS
COUNSEL APPEARING ON BEHALF OF THE RESPONDENTS

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TABLE OF CONTENTS
A. INDEX OF AUTHORITIES………………………………………………PG NO - 2
B. STATEMENT OF FACTS………………………………………………...PG NO - 4
C. ISSUES RAISED…………………………………………………………..PG NO - 5
D. SUMMARY OF ARGUMENTS…………………………………………..PG NO - 6
E. ARGUMENTS ADVANCED……………………………………………..PG NO - 7
1. THAT THE APPEAL IN THE PRESENT CASE IS NOT MAINTAINABLE

BEFORE THE HONOURABLE SUPREME COURT OF INDIA
1.1 IT DOES NOT INVOLVE A SUBSTANTIAL QUESTION OF LAW
1.2 TRIAL COURT ACTED WITHIN ITS JURISDICTION
2. THAT THE SURETY CAN RESTRAIN EXECUTION AGAINST HIM

UNTIL THE CREDITOR HAS EXHAUSTED HIS REMEDIES AGAINST
THE PRINCIPAL
2.1 SOLVENCY OF PRINCIPAL DEBTOR
2.2 NO BREACH OF CONTRACT
F. PRAYER………………………………………………………………..PG NO - 10
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INDEX OF AUTHORITIES
STATUTES
1. The Constitution of India
2. Civil procedure code 1908
3. Indian contract act 1872
CASES
1. Sir Chunilal V. Mehta And Sons, Ltd vs The Century Spinning And Mfg Co. ltd. AIR
1314, 1962 SCR Supl. (3) 549
2. SBI v/s S.N. Goyal (2008) 8 SCC 92
3. Union Bank of India V Manku Narayan, AIR 1987 SC 1078
BOOKS & ARTICLES

1. Mahendra P. Singh: Constitution of India (11th Edn)
2. MP Jain: Indian Constitutional Law
3. Universal: Constitution of India (Bare Act)
4. O Hood Philips: Constitutional Law (2nd Edn.)
5. Universal: Indian Contract Act 1872 (Bare Act)
6. R.K. Bangia
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WEBSITES
1. www.lawinsider.in
2. www.indiankanoon.org
3. www.indianconstitution.in
4. www.legalserviceindia.in
5. www.lawyerservices.in
6. www.manupatrafast.com
7. www.casemine.com
8. www.indiatoday.in
9. www.livelaw.in
10. www.pathlegal.in
11. www.lawoctopus.in
12. www.barandbench.in
13. www.lrgal500.in
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STATEMENT OF FACTS
 INTRODUCTION OF THE PARTIES IN CASE:

The plaintiff in the case is “Bank of Bihar limited (Creditor)” who has filed the case
for the recovery of the loan amount. The defendant no.1 is “Damodar Prasad
(Principal debtor)”who has borrowed the loan from the bank and defendant no.2 is
“Parasnath Sinha (Surety)” who is a guarantor in the instant case.
 INTRODUCTION OF THE CASE:
The plaintiff Bank lent moneys to defendant No. 1 Damodar Prasad on the guarantee
of defendant No. 2 Paras Nath Sinha. On the date of the execution of recovery
Damodar Prasad was indebted to the plaintiff for Rs. 11,723.56 on account of
principal and Rs. 2,769.37 on account of interest. In spite of demands neither he nor
the guarantor paid the dues. The appeal will lie at the civil judge junior division
because the valuation of the case is below Rs. 5,00,000 and then First appeal to the
high court under revision petition and then second appeal to the Supreme Court under
Civil Appellate Jurisdiction with the certificate of high court.
 INITIATION OF THE SUIT AT CIVIL COURT:
The plaintiff filed a suit against them in the Court of the Subordinate Judge, 1st Court,
Patna, claiming a decree for the amount due. The Trial Court decreed the suit against
both the defendants. While passing the decree, the Trial Court directed that the
"plaintiff bank shall be at liberty to enforce its dues in question against defendant No.
2 only after having exhausted its remedies against defendant No. 1
 PETITION AT HIGH COURT OF PATNA:
The plaintiff got affected by the judgment/direction of the Civil court (J.D.), the
plaintiff has approached to the high court where the plaintiff filed an appeal
challenging the legality and propriety of this direction. The High Court dismissed the
appeal of the plaintiff without going into the merit of the case.
 PETITION AT SUPREME COURT:
The appellant filed a second appeal on this matter before the honourable supreme
court of India.
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ISSUES RAISED
ON MAINTAINABILITY:-
1.THAT THE APPEAL IN THE PRESENT CASE IS NOT MAINTAINABLE BEFORE

THE HONOURABLE SUPREME COURT OF INDIA
ON MERITS:-
1.THAT THE SURETY HAS A RIGHT TO RESTRAIN EXECUTION AGAINST HIM

UNTIL THE CREDITOR HAS EXHAUSTED HIS REMEDIES AGAINST THE
PRINCIPAL.
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SUMMARY OF ARGUMENTS
1. THAT THE APPEAL IN THE PRESENT CASE IS NOT MAINTAINABLE

BEFORE THE HONOURABLE SUPREME COURT OF INDIA
The case does not involve a substantial question of law as per article 133 of the
constitution of India, as the order of preference of liability of payment does not affect
the subject matter of the suit and the right of the part. Further, the trial court was well
within its jurisdiction and acted within its discretionary power while passing the
order.
2. THAT THE SURETY HAS A RIGHT TO RESTRAIN EXECUTION AGAINST

HIM UNTIL THE CREDITOR HAS EXHAUSTED HIS REMEDIES
AGAINST THE PRINCIPAL
The principal debtor is solvent and capable of paying his debt and as the contract
between the principal debtor and the creditor is the primary contract because of which
the contract of guarantee arose, therefore the obligation of payment of debt by the
principal debtor is primary and obligation of surety is secondary.
There is no breach of contract, the creditor is entitled to receive his full payment from
principal debtor and surety, he is just directed to exhaust his remedies against
principal debtor and then against surety.
Hence, it is most humbly submitted before the honourable court that there is no
breach of contract and the creditor shall exhaust his remedies against the principal
debtor first.
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ARGUMENTS ADVANCED
1. THAT THE APPEAL IN THE PRESENT CASE IS NOT

MAINTAINABLE BEFORE THE HONOURABLE SUPREME
COURT OF INDIA
1.1 IT DOES NOT INVOLVE A SUBSTANTIAL QUESTION

In the context of Article 133 of the constitution of India and as per Chunilal V. Mehta and
Sons Ltd. v. Century Spg. & Mfg. Co. Ltd1, the proper test for determining whether a question
of law raised in the case is substantial would be whether it directly and substantially affects
the rights of the parties and if so whether it is either an open question in the sense that it is not
finally settled by this Court. Further, it should not be a mere question of law but a substantial
question of law. Hence, they have to satisfy this test to acquire jurisdiction under Section 100
of the CPC to entertain second appeals.
The question of preference of liability of payment of the principal debtor and surety is a mere
question of the manner and procedure through which the debt may be paid off and not a
substantial question, as it is not affecting the substantial right of the creditor is to receive
payment and performance of the obligation.
Differentiating between the question of law and the substantial question of law, it was
observed in SBI v S.N. Goyal2 that the former “arises incidentally or collaterally, having no
bearing in the final outcome” while the latter will influence the final outcome of the case. The
question involved in the case does not affect the overall outcome of the case, the creditor is
entitled to receive payment from the parties and the condition of preference is not
prejudicially affecting the entitlement of the creditor. Hence it is most humbly submitted
before the honourable court that the appeal is not maintainable as it does not involve a
substantial question of law.
1 .Sir Chunilal V. Mehta And Sons, Ltd vs The Century Spinning And Mfg Co. ltd. AIR 1314, 1962 SCR
2. SBI v/s S.N. Goyal (2008) 8 SCC 92

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1.2 TRIAL COURT ACTED WITHIN ITS JURISDICTION
Further, a substantial question of law arises when the subordinate court exercises jurisdiction

not vested in it by law. But under Order 20 Rule 11(1) and Section 151 of the Civil Procedure
code, the Court passing the decree had the power to impose the condition that the creditor
would not be at liberty to enforce the decree against the surety until the creditor has
exhausted his remedies against the principal. As Order 20 Rule 11(1) provides that "where
and insofar as a decree is for the payment of money, the Court may, for any sufficient reason
at the time of passing the decree, order that payment of the amount decreed shall be
postponed or shall be made by instalments, with or without interest, notwithstanding anything
contained in the contract under which the money is payable".
It is most humbly contented that the trial court exercised its discretionary power as vested in
by law.
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2. THAT THE SURETY CAN RESTRAIN EXECUTION AGAINST HIM

UNTIL THE CREDITOR HAS EXHAUSTED HIS REMEDIES
AGAINST THE PRINCIPAL DEBTOR
2.1 SOLVENCY OF PRINCIPAL DEBTOR
The principal debtor is solvent and capable of paying his debt and as the contract between the
principal debtor and the creditor is the primary contract because of which the contract of
guarantee arose, therefore the obligation of payment of debt by the principal debtor is
primary and obligation of surety is secondary. Also, in a similar case of Union Bank of India
v. Manku Narayan3, it was held that the appellant-Bank had to proceed first against the
mortgaged property and the principal debtor and then only against the guarantor.
2.2 THERE IS NO BREACH OF CONTRACT
There is no breach of contract as the right of creditor and contractual obligation of principal
debtor and surety is not extinguished, only the order and manner in which such obligation is
to be performed is changed. So the creditor is entitled to receive his full payment from
principal debtor and surety, he is just directed to exhaust his remedies against principal debtor
and then against surety.
Hence, it is most humbly submitted before the honourable court that there is no breach of
contract and the creditor shall exhaust his remedies against the principal debtor first.
3. Union Bank of India V Manku Narayan, AIR 1987 SC 1078

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PRAYER
Wherefore in the light of the issues raised, arguments advanced and authorities
cited, it is humbly requested that this Honourable Court may be pleased to
adjudge and declare:
1. That the appeal is not maintainable before the honourable supreme court
of India
2. That the order of trial court of is valid and the creditor has to first exhaust
all his remedies against principal debtor
3. That the appellant is liable to pay for all legal expenses incurred in
defending this suit
And pass any such order, writ or direction as the Honourable Court deems fit
and proper, for this the Respondents shall duty bound pray.
ALL OF WHICH IS RESPECTFULLY SUBMITTED
COUNSEL FOR RESPONDENTS

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BEFORE THE HON’BLE SUPREME COURT OF INDIA

UNDER ARTICLE 133 OF CONSTITUTION OF INDIA

WRITTEN SUBMISSION ON BEHALF OF THE RESPONDENTS

COUNSEL APPEARING ON BEHALF OF THE RESPONDENTS

1. THAT THE APPEAL IN THE PRESENT CASE IS NOT MAINTAINABLE

2. THAT THE SURETY CAN RESTRAIN EXECUTION AGAINST HIM

2. SBI v/s S.N. Goyal (2008) 8 SCC 92

3. Union Bank of India V Manku Narayan, AIR 1987 SC 1078

BOOKS & ARTICLES

 INTRODUCTION OF THE PARTIES IN CASE:

1.THAT THE APPEAL IN THE PRESENT CASE IS NOT MAINTAINABLE BEFORE

1.THAT THE SURETY HAS A RIGHT TO RESTRAIN EXECUTION AGAINST HIM

1. THAT THE APPEAL IN THE PRESENT CASE IS NOT MAINTAINABLE

2. THAT THE SURETY HAS A RIGHT TO RESTRAIN EXECUTION AGAINST

1. THAT THE APPEAL IN THE PRESENT CASE IS NOT

1.1 IT DOES NOT INVOLVE A SUBSTANTIAL QUESTION

2. SBI v/s S.N. Goyal (2008) 8 SCC 92

1.2 TRIAL COURT ACTED WITHIN ITS JURISDICTION

Further, a substantial question of law arises when the subordinate court exercises jurisdiction

2. THAT THE SURETY CAN RESTRAIN EXECUTION AGAINST HIM

2.1 SOLVENCY OF PRINCIPAL DEBTOR

2.2 THERE IS NO BREACH OF CONTRACT

3. Union Bank of India V Manku Narayan, AIR 1987 SC 1078

ALL OF WHICH IS RESPECTFULLY SUBMITTED

COUNSEL FOR RESPONDENTS

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