AYTHA VENKATA SESHAIAH Vs. DAGGUMATI RADHAKRISHNAIAH

JUDGEMENT

(1.) In a suit for dissolution of partnership and for accounts of several firms, a preliminary decree for dissolution was passed on 12th February, 1963 in respect of three of those firms, namely,, "Daggumati Radhakrishnaiah and Aytha Venkata Seshayya, New account" and its subsidiary concern "Murthy Textiles" which were declared to have been dissolved as from the date of the suit. It is necessary to point out that, in passing the preliminary decree, the learned judge of the trial court was of the opinion that "Suresh Textiles" was a sham company which the 1st defendant himself was running with his investments and stocks and the 3rd defendant had no real interest in it. It was, however, observed therein that the extent to which the 1st defendant had utilised the funds of the suit firm "Suresh Textiles" could be ascertained only when the accounts of the suit firm as well as of ''Suresh Textiles" were taken and the 1st defendant had thereafter to account for those funds and the profits resulting therefrom. Separate appeals were filed from the preliminary decree by'the 1st defendant and by the 3rd defendant and in the appeal filed by the 3rd defendant, a stay was granted on respondent No. 2 and respondent No. 3 giving security in favour of "Sri A.L.Narasimha Rao Panthulu Garu, M.A., LL.B., District judge, Nellore, and his successors in-office and assigns". In the operative part of that security bond, it was provided as follows;

(2.) On 30th January, 1964 the appeals filed both by the 1st defendant as well as by the 3rd defendant were dismissed, and the Second Appeals filed therefore were dismissed by this court on 27th October, 1967. A final decree was thereafter passed by the trial court on 31st December, 1968 whereby it was orderd that the 1st defendant was to pay to the plaintiff Rs. 15,715-7-6 with intrest at 6% per annum, and was also to pay Rs. 2,775-63 paise as being the costs of that suit. The plaintiff-appellant thereafter filed an execution application against respondent No.2 add 3rd respondent to sell the immovable properties given as security under the security bond dated 1st April, 1963. That Execution Application was dismissed by the trial court on 3rd March. 1971 on the ground that it was not maintainable without the accounts of Suresh Textiles being taken, and it was an admitted fact that the same had not been taken. That order was confirmed on appeal by the lower appellate court on 30th August, 1974 on the said grounds, as well as on the ground that the plaintiff-decree-holder was not entitled to enforce the bond in view of the fact that the same had not been assigned to him by the District Judge. It is from that order of the lower appellate court that the present Second Appeal has been preferred by the plaintiff-decree-holder.

(3.) Two questions really arise in this second appeal and they are: first, whether the Execution application out of which this appeal arises is maintainable in the admitted absence of the assignment of the Security bond in favour of the plaintiff-appellant; and secondly whether the said security bond can be enforced without the accounts of Suresh Textiles being taken the admitted position being that the same have not been taken. As far as the first of those questions is concerned, it must at the outset be pointed out that it was conceded by the learned counsel for the respondent s in the trial court that as the security bond has been executed in favour of the Presiding Officer of that court representing the decree-holder, no assignment thereof was necessary in favour of the decree-holder. That would, however, be in the nature of an admission on a point of law and it is now settled by the Supreme Court in the case of Banarsi Das v. Kanshi Ram (1) A.I.R. 1963 S.C. 1165 Para-12, that an admission on the point of law is not binding. 1 must, therefore, proceed to consider this question apart from that admission. Fortunately for me, the legal position seems to be well-settled by two decisions of separate Division Benches of this court. In the case of Yarlagadda Bapanna V. Devata China Yerakayya(2) A.I.R. 1966 Andhra Pradesh, 151, it has been held that a bond executed by the judgment-debtor as surety in favour of the court can be proceeded with in execution proceedings under section 151 of the Code of Civil Procedure when what is sought to be enforced is not the personal liability contained therein, but the charge created thereby on the property of the person who gave that security bond. It was observed that since what was sought to be enforced was not the personal liability under that bond, section 145 of the Civil Procedure Code would have no application. In a very recent decision of this court in the case of Jaladu Amanthe Raghuram Arya V. Jaidu Navalaxmi Devi (3) 1973(II) An.W.R. 72, it has been held by a Division Bench that where, however, a security bond is executed in favour of a particular Presiding Officer by name, the bond cannot be enforced without tiie named officer assigning the same in favour of the decree-holder and that in such a case the question of exercising the court's inherent powers under seciton 151 C.P.C. would not arise. It was further observed that the attention of the learned Judges had not been drawn to a single case in which the inherent powers of the court were exercised when the security bond had been executed in favour of a particular named officer who happened to function for the time being as the presiding officer of the court in question. The ratio that emerges from these two decisions is, in my opinion, clear, and that ratio is that where a charge created by a security bond in favour of a named presiding officer of that court is sought to be enforced, an assignment in favour of the decree-holder is necessary; but where a charge was created by a security bond which had been executed in favour of the court and not in favour of a named presiding officer of that court, the inherent powers of the court under section 151 C.P.C, can be invoked and the charge enforced in execution proceedings without a separate suit having to be filed in respect of the same.