Question

Priyanka Sharma (hereafter mentioned as PS), is the owner of a new boutique called PS Designs. On 10th March, 2019, she approached BW Financial Corporation (hereafter mentioned as BW), a financial institution, for a loan of INR 35,00,000/-. A mortgaged deed was also executed as a security to the loan,  which stated that in case, PS fails to pay the principal amount along with interest and other monies due, BW shall be entitled to realise its dues by sale of the mortgaged properties and other assets.  On the same day, a surety agreement was also executed by Ashwin (hereafter mentioned as Mr A), and Tridev (hereafter mentioned as Mr T), who agreed to stand as sureties with shares 15% (INR 5,25,000) and 16% (INR 5,60,000) respectively for PS against the total loan from BW.  On 19th July, 2020, PS was able to pay back only INR 2,00,000/- to BW. BW decided to get in touch with PS’s sureties. Unfortunately, it was informed that Mr T recently passed away due to critical medical conditions. On the other hand, Mr A informs that he will not pay his share since the death of Mr T discharged him as well from the surety agreement. He also stated that BW already had different sources through which he could get back the amount. But the latter was only looking for an excuse to torment him for the money. BW files a suit against Mr A. On the other hand, BW filed an action for repayment of balance against PS on 29th November, 2020. PS argued that on 25th September, 2020, BW sold off the mortgaged properties along with the other assets amounting up to INR 15,00,000/-. She claimed that all the agreed sources for repayment have been at BW’s disposal. Therefore, she was no longer liable to pay a penny further.  

From the above factual matrix, discuss the final outcome of the suits filed by BW against Mr A and PS, respectively, with appropriate arguments.​

Answer 1

Explanation:

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