GIRRAJ SINGH Vs. MUL CHAND

JUDGEMENT

(1.) This appeal arises out of a suit of a somewhat peculiar nature. In the Bulandshahr district there lived one Rao Umrao Singh who owned large estates. He had in his employ one Mul Chand, an old and trusted servant, who had been in his service since the Mutiny, In 1870, Mul Chand wished to purchase some property, and for that purpose he applied to Udai Ram, a money-lender of the Meerut district, for a loan. As Mul Chand was not a resident of those parts and had no property, Udai Ram refused to lend him the money, but offered to let him have the sum he wanted, namely, Rs. 2,000, if his master, Umrao Singh, stood security for him.

(2.) Mul Chand accordingly applied to Rao Umrao Singh, and the latter, at Mul Chand's request, executed a bond for Rs. 2,000 in favour of Udai Ram and his father. This bond is printed at page 12 of appellant's book in F.A. No. 236 of 1897. It bears date the 3 of November 1870, and begins as follows: "I Rao Umrao Singh, declare as follows: I have borrowed Rs. 2,000 of the Queen's coin from Lala Khub Chand, and brought it to my use." The obligor covenanted to pay the money on demand with interest at the rate of Rs. 1-8-0 per cent, per mensem. The loan. not having been repaid, the bond was renewed on the 25 October 1876, by the execution of a fresh bond by Rao Umrao Singh for Rs. 3,500, being the principal and interest due on the first bond. In this bond Rao Umrao Singh admitted the money to be due by him and agreed to pay it on demand with interest at the same rate as that fixed in the first bond. The second bond not having been satisfied, Rao Umrao Singh executed on the 35 of November 1879 a third bond in favour of Udai Ram for Rs. 4,000 on account of the amount due by him under the bond of the 25 of October 1876. He covenanted to pay this amount in two years with interest at the same rate as that specified in the previous bonds. This debt not having been paid, Rao Umrao Singh, on the 1 of November 1887, executed a fourth bond for the sum of Rs. 15,000, which, as the bond recites, had been found due by him on account of the bond, dated the 15 of November 1879. He covenanted to pay this amount within two years with interest at the rate of 1 percent, per mensem. All these bonds were registered, and it will be noticed that in none of them is any mention made of Mul Chand. Mul Chand was examined as a witness in the suit which Udai Ram brought to recover the amount due under the last mentioned bond. His deposition is printed at page 13 of the appellant's paper book in this case. With reference to the bonds he says, at page 17 (h);--"On none of the occasions when the bonds were renewed, did the plaintiff (i.e., Udai Ram), consent to my joining the Rao Sahib in the execution of the bond." The last bond not having been satisfied, Udai Ram, on the 30 of October 1895, i.e., just within the six years period of limitation from the date when the money was payable, instituted a suit against Rao Umrao Singh to recover the amount due under the bond which by this time had swelled to upwards of Rs. 37,000. On the 23 of August) 1897 the then Subordinate Judge dismissed Udai Ram's suit on a preliminary point. The plaintiff appealed to this Court, and, on the 12 April 1899, the decree of the Subordinate Judge dismissing the suit was set aside by this Court and the case remanded under Section 562 of the Civil P. C. for decision on the merits. Before the suit could be disposed of Rao Umrao Singh died and his sons were brought upon the record as his legal representatives. On the 2 January, 1900 the Subordinate Judge passed a decree against them for Rs. 37,139-6-6, together with interest pendente lite and costs; in all for Rs. 48,288-5- 11, with future interest at the rate of 6 per cent. per annum. Against this decree the sons appealed to this Court, but, acting on the advice of their counsel, they compromised the case, undertaking to pay a sum of its. 51,000 to the plaintiff, and the appeal was thereon withdrawn. Out of this amount of Rs. 51,000, the sons of Umrao Singh paid Rs. 40,000 to Udai Ram on the 5 of November 1902. On the 14 of July 1903 they instituted the suit out of which this appeal arises, to recover from Mul Chand the amount they had paid, namely, Rs. 40,000, together with Rs. 954-9-3, being the costs which they had incurred in the High Court. The suit has been dismissed by the Subordinate Judge, and the plaintiffs come here in appeal.

(3.) The costs of the High Court were paid by the plaintiffs on the 29 of the March 1900, i.e., upwards of three years before the institution of the present suit, and the claim for that item is clearly time-barred. Although a plea is taken in the memorandum of appeal in regard to this item, it is not supported. In the plaint in the present suit it is alleged that all the bonds mentioned above were executed by Rao Umrao Singh as surety for the satisfaction of the creditor and for the benefit of the defendant." It is quite clear, however, from the bonds and from the evidence in the case that Umrao Singh was indebted to Udai Ram as a principal and not as a surety, the only resemblance to a surety being that the himself did not benefit by the money which Udai Ram lent to him on his credit, and that the money was handed over to Mul Chand. The main defences to the suit were that the claim was barred by limitation and that the payment of Rs. 40,000 by the plaintiffs was in reality a gratuitous payment which they were not obliged to make. The learned Subordinate Judge found for the plaintiffs on the issue as to limitation, but he held that the act of the plaintiffs in compromising the case was a wrongful act. He further held in regard to the bond that the transaction, namely, the execution of the bond by Rao Umrao Singh; was, so far as Udai Ram was concerned, that of a surety for Mul Chand that Mul Chand was the principal debtor that Udai Ram's claim as against him was barred, and that the surety i. e., Umaro Singh, was therefore absolved from his obligations, to discharge the debt. In my opinion this view of the Subordinate Judge cannot be supported. On the bond as it stood the obligor, Umrao Singh, had no defence to Udai Ram's suit as by it he rendered himself liable as a principal for the amount secured thereby. It appears to me impossible to hold that Rao Umrao Singh was absolved from liability by the failure of Udai Ram to institute a suit against) Mul Chand. The evidence leaves no doubt whatever that the money was borrowed by Umrao Singh from Udai Ram for Mul Chand's benefit and at his request, and that the bonds were renewed from time to time at Mul Chand's request. It is further proved in my opinion that Mul Chand undertook to discharge the bonds when they fell due, that is, he undertook to indemnify Udai Ram. The evidence discloses both an express and implied contract to hold Umrao Singh free from liability under the bonds. In his deposition in the suit of Udai Ram, Mul Chand said [see page 15 of the appellant's book; between letters (g) and (h): "If a decree be passed against the Rao Sahib, he will bring a suit against me."