CHARAN SINGH Vs. SECURITY FINANCE PRIVATE LIMITED

JUDGEMENT

(1.) he short but interesting legal point has been raised in this appeal as to whether the fact that after the money decree had been passed against the principal debtor and a surety and the decree holder enters into a settlement with the principal, debtor and agree to accept some less amount from the principal debtor and decides not to proceed for recovering remaining amount from the principal debtor has the effect of discharging the surety judgment debtor or not ?

(2.) The facts, in brief, are that the decree holder-M/s. Security Finance Private Limited had obtained a decree for recovery of Rs. 30,155.00, against Bhiku Ram, Attar Singh and Charan Singh. Admittedly, Bhiku Ram and Attar Singh were the principal debtors while Charan Singh, the appellant before me, was a surety. Attar Singh had died during the pendency of the execution proceedings and the decree holder did not pursue the execution against any legal heirs of Attar Singh as the decree holder could not find out the legal heirs of said Attar Singh, judgment debtor. During the execution proceedings a compromise was made by decree holder with the other principal debtor-judgment debtor, namely, Bhiku Ram agreed to pay a sum of Rs. 10,000.00, in instalments and in case the said amount was to be paid, the decree holder was not to proceed against Bhiku Ram for recovering the balance amount of decree. The decree holder pressed for executing the decree against Charan Singh for recovering the balance amount of decree. Admittedly, Bhiku Ram had paid Rs. 10,000.00, to the decree holder. The appellant filed objections before the executing court pleading that as the decree holder had entered into a compromise with the principal debtor-judgment debtor, namely, Bhiku Ram and had given facility of instalments to said judgment debtor without the consent of the surety/judgment debtor/appellant, hence, the appellant's liability in the decree stood discharged. This objection petition was 20 strongly opposed by the decree holder pleading that the liability of the appellant, who is a co-judgment debtor, has not ceased in any manner. I may mention, the other pleas taken were that the execution application was barred by time and with the death of one of the judgment debtors the execution application could not further proceed. The following issues arose from the pleas : 1. Whether execution petition is time barred ? 2. Whether the execution petition is inexecutable because of death of Attar Singh ? 3. Whether the court has no jurisdiction to execute the decree ? 4. Whether the execution petition is not maintainable against the judgment debtor No. 3 because amount has to be realised first from Bhiku Ram and compromise has been arrived at with Bhiku Ram ? An additional issue was also framed as follows : Additional Issue "Whether the decree is based upon fraud or is unexecutable ?"

(3.) The objections were dismissed by Shri Bharat Bhushan, Sub Judge, vide his order dated November 18, 1978. Undisputably the decree holder- company had gone into liquidation and by virtue of Section 454-A of the Companies Act, the period of limitation for filing the execution application stood extended. Decree was passed on October 25, 1973 and the execution application was filed on September 30, 1975. The winding up order was made by the court on July 17, 1969 in a winding up petition dated February 19, 1968. So, keeping in view the said period, the execution application was rightly held to be within time. Counsel for the appellant could not advance any arguments on this point. In respect of issue No. 2 also counsel for the appellant has nothing to say because there is no law that if one judgment debtor had died the execution application cannot proceed against other co-judgment debtors. So, the finding of the Sub Judge on issue No. 2 is also correct. As this issue No. 3 was not pressed before the lower Court, the same also has not been referred to by the learned counsel for the appellant in his arguments. Even no arguments have been advanced by the learned counsel for the appellant in respect of additional issue. The only contention raised before me by the learned counsel for the appellant is with regard to the finding of the learned Sub Judge in respect of issue No. 4 that the appellant's liability has not ceased even though the decree holder has effected a compromise with one of the judgment debtors, namely, Bhiku Ram.