THALLURI LAKSHMINARASAYYA Vs. NARELLA APPALASWAMI

JUDGEMENT

(1.) The petitioner is a decree-holder who on 3rd August 1946 filed an execution petition to enforce a bond against a surety who had executed a bond under Section 55, Civil P. C. on behalf of the judgment-debtor on 28th December 1942. The judgment-debtor had been arrested in execution and been produced in Court when on security being furnished he was released. In the bond the surety undertook to pay the entire decretal amount if the judgment-debtor did not file an insolvency petition within a month and did not prosecute it; or if he failed to produce the judgment-debtor whenever called upon. The insolvency petition was dismissed for non deposit of gazette notification charges on 13th September 1943. The learned District Munsif held that this execution against the surety was time barred on the very curious ground that as execution was barred against the judgment-debtor himself, it was barred against the surety also. It appears to have been conceded quite wrongly before the learned District Munsif that execution against the judgment-debtor was barred because the execution petition in which this bond was filed was dismissed on 3rd April 1943 and more than three years had elapsed since the present execution petition was filed on 3rd August 1916. I observe that the bond under Section 55 has only been executed by the surety and not as it should have been also by the judgment-debtor himself. The view taken by the learned District Munsif that if execution is barred against the judgment-debtor, it is also barred against the surety is quite erroneous. Execution so far as the surety is concerned is clearly in time as the bond executed became enforceable only on 13th September 1943 when the insolvency petition filed by the judgment-debtor was dismissed for non-prosecution. The decree-holder clearly had three years from this date in which to enforce this bond in execution, the date of the dismissal of the original execution petition in which this bond was filed namely 3rd April 1943, not being any criterion date at all. Article 182 (7) is the applicable article of limitation prescribing as it does three years and the time from which the period begins to run where the application is to enforce any payment which the decree or order directs to be made at a certain date, "such date." In this case the surety amount becomes payable on a specified date of default. The decree-holder clearly has three years from this date in which to execute this bond. Execution against the surety is clearly in time, quite apart from any other considerations.

(2.) The learned District Munsif has also made an erroneous assumption that in computing time, as the insolvency petition was not prosecuted to the stage of adjudication the period covered by the insolvency petition cannot be excluded in calculating the three years from the date of the last order on the execution petition. The learned advocate for the respondent has argued at length that the period from the date of presentation of the insolvency petition cannot be excluded under Section 78(2), but only the period from the date of adjudication upto the date of the order of annulment. He has relied on the decision of Sambayya v. P. Subbayya, 1937-2 M. L. J. 703: (A. I. R. (25) 1938 Mad. 19) which dealt with the period of limitation in a suit filed by a plaintiff on two promissory notes. Creditors filed an insolvency petition against this debtor on 7th November 1922 and the order of adjudication was passed on 21st March 1923 and it was annulled in 1928. The plaintiff sought to exclude the whole period from the presentation of the insolvency petition upto the annulment of the adjudication with reference to Section 78(2) read with Section 28(7) by which an order of adjudication shall relate back and take effect from the date of the presentation of the petition on which it is made. The ratio decidendi of this decision is that it was open to the creditor to have filed a suit even after the creditors had filed an insolvency petition with leave of the Court and that if he did not do so and no order of adjudication was made he may find his claim barred. The facts in the present case are really answered in the following observation of Venkataramana Rao J. in that decision:

(3.) The petition is allowed with costs.