GOKULCHAND RAMGOPAL Vs. LAXMINARAYAN MARWADI

JUDGEMENT

(1.) 1. This is an application to revise an order passed by the Additional District Judge, Anaraoti, on 16th March 1931, respecting the security bond executed by Champatrao, non-applicant 2, on 20th June 1929, for payment of the amount which Laxminarayan would be liable to pay to Gokulchand under a decree that would ultimately be passed by this Court in which an appeal was pending Under that security bond Champatrao hypothecated some property as security. Now Gokulchand who succeeded in the Judicial Commissioner's Court seeks to enforce the liability undertaken by Champatrao under his security bond dated 20th June 1929. It was contended by Champatrao that the decree bolder could not proceed against the property hypothecated by him until be had exhausted his remedies against his judgment debtor Laxminarayan. It was also contended that an order passed on 4th July 1920 operated as res judicata The lower Court held, on construction of the surety bond, that the decretal amount had to be first recovered from the judgment-debtor and if it was-not possible to recover the amount from him then the surety might be proceeded against. The order dated 4th July 1930 was also held to operate as res judicata. It is against this order that this revision application has been filed. It appears that the aggrieved party is entitled to prefer an appeal against the order since Champatrao is deemed to be a party to the suit under the terms of Section 145, Civil P. C. I would treat this revision petition as an appeal. The material portion of the security bond, dated 20th June 1929, is as follows: Accordingly, I, Champatrao, of my own free will stand security to the extent of Rs. 12,000 mortgaging the properties specified in the schedule hereunto annexed, and covenant that if the decree of the first Court be confirmed or varied by the appellate Court, the defendant shall duly act in accordance with the decree of the appellate Court and shall pay whatever may be payable by him thereunder, and if he should fail therein then any amount so payable shall be realized from the properties hereby mortgaged, and if the proceeds of the sale of the said properties are insufficient to pay the amount due,. 1 and my legal representatives will be personally liable to pay the balance.

(2.) IT is contended for the respondent that the expression the defendant shall duly act in accordance with the decree and shall pay whatever may be payable by him thereunder implies that the decree holder was to exhaust the resources of legal process for recovering his decretal amount from his judgment-debtor. I cannot accede to this forced interpretation of the terms of the security bond which are plain in themselves. The words used clearly show that the decree-holder was entitled to proceed against the surety as soon as there was a failure oh the part of the judgment-debtor to pay the decretal amount. The terms embody an assurance to the decree-holder that the judgment-debtor would voluntarily pay the amount Non-payment by the judgment-debtor of the decretal amount would give a cause of action to the decree-holder to proceed against him and it is that event which is contemplated by the parties to give rise to the obligation of the surety. The terms contemplated a definite point of time, viz., the non-payment, which necessarily means voluntary non-payment. The failure by the decree holder to recover his amount by coercive process such as arrest of the judgment-debtor or attachment and sale of the property cannot, by any means be treated as being implied by the expression "if the judgment debtor failed to pay." If the parries bad intended that the obligation of the surety was to accrue after the decree-holder exhausted the resources of law, the parties would have expressly said so. But there is nothing in the document which could convey even the faintest suggestion of this nature. The lower Court committed a patent error in its interpretation of the security bond. The error was obviously due to the reliance on some cases which, on perusal, I find are not apposite. I therefore hold that the surety's obligation originated when the judgment-debtor Laxminarayan failed to pay the decretal amount which invested the decree-holder with the right to proceed against him in execution.

(3.) THE learned Counsel for the respondent invites my attention to Order 21, Rule 64, Civil P. C., and argues that it is discretionary with the executing Court to-determine the order in which the various items of property are to be sold. As an abstract proposition of law I accede to the argument, but in view of the facts of the case this argument cannot prevail to sustain the lower Court's order, since it never purported to exercise any discretion in the matter. The lower Court's order is set aside and the appeal is allowed. The decree-holder is free to enforce the obligation incurred by Champatrao on his surety bond subject to the discretion of the executing Court, under Order 21. Rule 64, Civil P. C. The respondents will pay the appellant's costs in this appeal. Pleader's fees Rs. 50.