KAMLA DEVI Vs. TAKLIATMAL

JUDGEMENT

(1.) This appeal by Special leave raises, inter alia, the question of construction of the terms of a surety bond.

(2.) The material facts are as follows:On August 26, 1947, Seth Takhatmal, respondent 1, filed Civil Suit No. 9-A of 1947 in the Court of the First Additional District Judge, Jabalpur, against Mulkraj Malhotra, the second respondent, for dissolution of their partnership and rendition of accounts. On August 27, 1947, the first respondent applied for attachment before judgment of all the bills payable to "M. R. Malhotra and Company", as per description given in Schedule A attached thereto and for the issue of an order to C. M. A. S. C., Poona, prohibiting them from issuing any cheques due to M. R. Malhotra and Company, and on the same day the Court issued notice of the said application. On August 28, 1947, the Court issued a conditional order of attachment before judgment in respect of the said bills. On September 9, 1947, the second respondent applied for vacating the order of attachment. On September 11, 1947, the second respondent offered to give security if time was granted to him. On October 17, 1947, five surety bonds were executed by the appellant and 4 others for different amounts and presented to the Court. The Court accepted the bonds and withdrew the order of attachment. The appellant's surety bond to the Court was for a sum of Rs. 12,000/-. Under that bond she agreed, if the second respondent made a default in producing and placing at the disposal of the Court when required the properties specified in the Schedule attached thereto or the value of the same or such portion of the same as may be sufficient to satisfy the decree, to pay to the Court a sum not exceeding Rs. 12,000/-. On October 13, 1948, a preliminary decree was made in the said suit. On August 1, 1951, the second respondent was adjudged as an insolvent by the High Court at Calcutta. On September 20, 1951, a final decree was passed in the said suit against the second respondent for a sum of Rs. 1,74,906/4/0 plus Rs. 7,868/10/0 as costs. On October 19, 1951, the first respondent filed an application for execution of the decree by enforcement of the surety bonds under S. 145 of the Code of Civil Procedure. On December 7, 1951, the appellant filed objections raising various pleas inter alia, contending that the decree was passed without jurisdiction and that the surety bond was void. On May 28, 1952, the second respondent filed an application under S. 5 of the Displaced Person (Debts Adjustment) Act, 1951 (LXX of 1951), hereinafter called the Act, before the Tribunal at Dehra Dun for adjustment of his debts under the provisions of the Act. On July 9, 1952, the adjudication of the second respondent as an insolvent was annulled. On August 2, 1952, the appellant filed an application before the District Court under S. 15 of the Act for stay of the execution proceedings and for the transfer of all the records to the Tribunal at Dehar Dun. On August 20, 1956, the Tribunal at Dehra Dun, holding that it had no territorial jurisdiction to entertain the application filed by the second respondent under the Act, returned it for presentation to a proper tribunal. On August 22, 1952, the executing Court rejected all the contentions of the appellant. On August 29, 1956, the second respondent preferred an appeal against the order of the Tribunal at Dehra Dun returning his application filed under S. 5 of the Act. It is represented to us by the learned counsel for the respondent on instructions that the said appeal was dismissed. The appellant preferred Miscellaneous First Appeal No. 44 of 1952 against the order of the executing Court rejecting her objections to the High Court of Judicature at Nagpur. That Court, by its order dated October 1, 1956, dismissed the appeal. The Letters Patent Appeal No. 212 of 1956 preferred by the appellant against the order of the single Judge of the High Court was also dismissed by a division Bench of that Court on March 12, 1957. The present appeal has been preferred by the Andhra Pradesh by special leave.

(3.) Mr. Mathur, learned counsel for the appellant raised before us the following points:(1) The executing Court acted without jurisdiction in refusing to stay the execution proceedings against the appellant contrary to the express provisions of S. 15 of the Act. And (2) a surety bond has to be strictly construed and if so construed it would be obvious on the express terms of the bond that the necessary conditions for its enforceability were not fulfilled.