APPU NAYAR Vs. KOCHUKRISHNAN NAYAR

JUDGEMENT

(1.) This second appeal is by a surety for a Receiver. His complaint is that his liability as surety has been found too high and without warrant, in respect of these matters. I will consider those on by one.

(2.) Firstly in respect of the interest liability shouldered on the Receiver. The surety says that the bond he had executed does not contain any reference even remotely in regard to this matter. I have heard the bond read and I notice that the contention of the surety is correct. The question then is whether because the liability now fixed against him does not exceed the maximum which he has undertaken to be liable for, he should be made liable for the interest. This is the ground on which the court below fixed the liability on him for interest though it disallowed interest on interest. Certainly the approach of the court below was wrong. Learned counsel for the respondent, says that the bond, on proper construction would impose liability on the surety for the consequences which could be vested on the Receiver on account of his non payment. But this is going too far. In Maharaja of Banares v. Har Narain Singh, 28 All. 25, the sureties undertook the liability of the lessees in respect of rent due. It was held that they could be made liable only for arrears of rent and not also for interest. This case was cited with approval and followed in a parallel case, Chacko v. Chandy, 1956 KLT 242 . I therefore hold that the interest liability as fixed by the court below amounting to Rs. 575-1-1 will stand deleted as against the appellant.

(3.) Secondly, value of paddy due for the 1128 Kanni crop. It would appear that out of 345 paras collected and to be accounted for by the Receiver, he had sold to Government 176 paras at the scheduled rate of Rs. 1-14-0. Nevertheless the surety was made liable for all the 345 paras at the rate of Rs. 3 because it had been agreed to as between the parties as recorded in order of Court dated 2-3-1955. Obviously the agreement must have been with regard to paddy or price not properly accounted for. This aspect was not considered by the court below because apparently it was not well stressed before it. Anyhow the liability at Rs. 3 per para will stand fixed only to the extent of 169 paras, if the sale to Government alleged is made out on further scrutiny.