(1.) THE respondent filed a suit against the State for a declaration that he was owner of the property specified in the plaint. The suit was decreed, and the State has filed an appeal. During the pendency of the appeal an order was made on December 14, 1970 directing sale of the mature forest trees situated in the property, and deposit of the sale proceeds in the State Bank of India, Simla. It appears that some trees were sold and the sale proceeds were paid over to the Registrar of this Court for depositing in the Bank. The respondent then applied for permission to withdraw Rs. 60,000/- out of the said amount and on May 10, 1974 this Court granted the prayer subject to the respondent furnishing security to the satisfaction of the Registrar for re-payment of that amount in case the appeal was allowed. The respondent filed a surety bond before the Registrar, and an objection has been taken by the learned Advocate General on behalf of the State that the surety bond requires to be registered under the Indian Registration Act and also that its terms are not properly framed so as to sufficiently bind the surety. The objection is now before us.
(2.) THE surety bond has been executed by one Surat Ram Jhingta, and recites:
(3.) THE first question is whether the surety bond needs to be registered under the Indian Registration Act. There is a sharp cleavage of opinion between the courts in India on this question. One view is expressed in Kasturi Lal v. Goverdhan Dass, AIR 1934 Lah 138 (FB), where a Full Bench of the Lahore High Court has laid down that no registration is required. The other has been enunciated in Bishnath Sahu v. Prayag Din, AIR 1958 All 820 where a Division Bench of the Allahabad High Court has held that registration is mandatory. In our judgment, the view taken by the Lahore High Court should be preferred. The learned Judges of the Lahore High Court approved of the view taken by the Bombay High Court in Javappa Lokappa v. Shivangouda Dyamangouda, AIR 1928 Bom 42 where it was pointed out that documents of this kind are not executed between the decree holder and the surety, but between the surety and the Court, and are steps in judicial proceedings and therefore, they fall within the purview of the broad general principle laid down by the Privy Council that proceedings of the Court do not require registration. In this regard reference was made to the opinions of the Privy Council in Bindesri Naik v. Ganga Saran Sahu, (1898) ILR 20 All 171 (PC), Pran Lal Annee v. Lakhshmi Annee, (1899) ILR 22 Mad 508 (PC), and Hemanta Kumari Debi v. Midnapur Zamindari Co., AIR 1919 PC 79. It is apparent, as the learned Judges observed, that it is not the execution of the bond which affects the transfer of rights in the property described therein so as to make it available for the satisfaction of the decree which might be passed by the appellate court, but it is the order of the Court accepting the bond which creates those rights. The bond does not become operative so long as it is not accepted by the Court, and that would be so even if the bond has been duly registered immediately after its execution. It was pointed out that if by reason of the insufficiency of the security or on some other ground the court chose not to accept the bond, it would remain a wholly ineffectual and inoperative document despite the fact that it contained all the terms of the transaction and had been duly executed and registered. Accordingly, as it is the order of the Court accepting the bond which makes it an operative document the case would fall within the provisions of sub-section 2 (vi) of Section 17 of the Indian Registration Act. The bond will thus be excluded from the necessity of registration required by Section 17 (1) of the Act. This view has been followed by the Nagpur High Court in Dadoo Balaji v. Kanahaialal Dhanaram AIR 1947 Nag 26, by the Madhya Pradesh High Court in Hajijiwakhan v. Gulabchand Harakchand AIR 1961 Madh Pra 2, by the Mysore High Court in B. Rama Bhatta v. B. Kodandarama Bhatta AIR 1963 Mys 332 and by the Delhi High Court in M/s. Label Art Press v. M/s. Indo European Machinery Co. (P) Ltd., AIR 1974 Delhi 136.