SUBBARAYA PILLAI Vs. SATHANATHA PANDARAM

JUDGEMENT

(1.) The sole question raised in this second appeal is whether Section 145 of the Code of Civil Procedure applies to surety bonds taken by the judgment-creditors outside Court. The counter-petitioner in the case executed a surety bond in favour of the plaintiff in Original Suit No. 110 of 1913 in the Court of the District Munsif of Tirutnraipundi, in consideration for which the plaintiff-petitioner stayed execution of his decree against the defendant. He now seeks execution of the decree against the surety and objection is raised that Section 145 does not apply. The District Munsif held that Section 145 applies to cases in which the surety bond was put into Court before final orders were passed on the prior execution petition. The District Judge, on appeal, held that the section is of general application and allowed execution to proceed. It is somewhat remarkable that the exact point has not been decided before now and it seems to be generally admitted that the proceedings under this section have not generally been taken in respect of surety bonds not given before the Court. My learned brother, who has an unrivalled experience in these matters, tells me that he has never known of such an application. It cannot be denied, however, that the language of the section is, wide enough to include such surety bonds. But it is argued that the Sub-sections (a), (b) and (c), which describe the classes of surety bonds affected by the section, all in terms refer to bonds taken before the Court under the provisions of the Code and that, therefore, the application of the section must be so limited. Sub-section (a) for the performance of any decree or part thereof" would certainly apply to a provision for staying execution under Order XLI, Rule 5, clause 3 (c), on the appellant giving security for the due performance of such decree or order as may ultimately be binding on him. Sub-section (b) "for the restitution of any property taken in execution of a decree" undoubtedly applies to Order XLI, Rule 6, which requires the Court which passed the decree, on sufficient cause being shown by the appellant, to take security from the respondent for the restitution of any property which he seeks to take in execution of the decree. Sub-section (c) "for the payment of any money, under an order of the Court in any suit or in any proceedings consequent thereon" in terms applies to Order XXVIII, Rule 2, Clause (2), namely :"Every surety for the appearance of a defendant shall bind himself, in default of such appearance to pay any sum of money which the defendant may be ordered to pay in the suit." In the same Sub-section (c) the words "for the. fulfilment of any condition imposed on any person under an order of the Court, etc.," would in terms apply to any condition, for the stay of execution imposed under Order XXI, Rule 26, Clause (3), and also to a realisation of security in default of a judgment-debtor applying to be made insolvent under Section 55, Sub-section (4). In all these oases the security might contain a surety bond and the bond would, of course, be given before the Court. Sub-sections (6) and (c) in the Section 145 are new. The corresponding section of the old Code, Section 253, ran as follows: Whenever a person has, before the passing of a decree in an original suit, became liable as surety for the performance of the same or of any part thereof, the decree may be executed against him to the. extent to which he has rendered himself liable, in the same manner as a decree may be executed against a defendant. The same question would, therefore, arise on the construction of this section, but the only oases dealing with this section are those that raised the question whether the words "before the passing of a decree in an original suit" apply to suretyships for the due performance of appellate decrees, on which there was a difference of opinion in the different Sigh Courts of this country. There is a decision of the High Court of Calcutta reported as Lakshmi Narain Khanna v. Guru Datta Mehra 16 Ind. Cas. 859, which is against the appellant. In that case a warrant was issued for the arrest of a judgment debtor which directed it to be stayed if the judgment debtor furnished security. The judgment-debtor was arrested and brought before the Court. Then the following entry was made in the order-sheet: "The judgment- debtor has been brought after being arrested. The decree holder s Pleader states that the judgment-debtor s father-in law has deposited with him Government promissory notes of the value of Rs. 2,000 as stated in his petition as security for the decretal amount; so he asks the Court to release the judgment-debtor from custody. The judgment-debtor is released." The decree-holder applied for execution against the surety and prayed that he promissory notes in his custody might be sold. Objection was taken that Section 145 was not applicable, because the appellant did not become surety by an application to the Court or by a bond filed in the proceedings. The Bench held that the section does not provide that this liability must have accrued upon an application presented to the Court or a surety bond filed in the proceedings, and proceeds as follows: "We cannot limit the application of the section to cases where the liability of the surety is undisputed or is a matter of record." The facts of this case, however, show that execution was stayed under an order of the Court and the debtor released on the surety being given, although the security was certainly taken outside Court. In the present case no order has been passed by the Court at all, so that although the language of the Judges seems wide enough to cover the present case and though they specifically decide that the security need not be taken before the Court, there is still the difference that it was the Court that stayed its hand and not the decree-holder. In Thirumalai v. Ramayyar 13 M. 1 : 4 Ind. Dec. (N.S.) 711 the main question was whether Section 253 of the old Code could be availed of where security had been given on behalf of the respondent to an appeal under Section 546 of the Code for the due performance of the decree, that is under Order XLI, Rule 6, of the present Code. The Court held that execution could be had against the sureties and used the following language : The obligation which the surety undertakes is an obligation to fulfil the decree which may be passed against the defendant or appellant in the original suit or in appeal, and the obligation is contracted before the Court and is as much a matter of record as the decree undertaken to be fulfilled. There is no apparent reason for directing the successful party to obtain a fresh decree against the surety, whilst the very obligation is to fulfil the decree against the defendant or the appellant." The reasoning of the Court here is inconsistent with the contention of the respondent and with the wide language in Lakshmi Narain Khanna v. Guru Datta Mehra 16 Ind. Cas. 859, but is not inconsistent with the actual decision in 16 Ind. Cas. 859. Then there were some decisions under Section 204, of Act VIII of 1859, which were as follows: " Whenever a person has become liable as surety for the performance of a decree, etc.," which section it is to be noted has not got the words in Section 253 of the Code of 1882, "before the passing of the decree in an original suit." In a case reported, as Baboo Ram Kishin Doss v. Hurkhoo Sing 7 W.R. 329 it seems to have been assumed that Section 204 applies to cases such as that of parties who become sureties under Section 76 or 83 of the Code. In Gujendro Narain Roy v. Hemanginee Dossee 13 W.R. 35 : 4 B.L.R. App. 27 it is held that a security bond entered into subsequent to a judgment cannot be enforced under Section 204. These two cases were considered by the High Court of Calcutta in a later decision reported as Abdool Kureem v. Abdool Huq Kazee 15 W.R. 21 : 8 B.L.R. 205. There the judgment debtor had been arrested upon a warrant in execution of a decree and applied for his discharge on the ground that he had up means of paying the debt. He was released on a bond given to the Munsif by two sureties under a provision corresponding to Section 55, sub Section 4 of the present Code. The Munsif held that as the bond was given subsequent to the judgment it could not be enforced under Section 201. The Court distinguished the two prior cases in Baboo Ram Kishen Doss v. Hurkhoo Singh 7 W.R. 329 and Gujendra Narain Roy v. Hemanginee Dossee 13 W.R. 35 : 4 B.L.R. App. 27. on the ground; that the liability of the surety in those two oases did not arise in the course of or out of proceedings in the suit but upon distinct and independent contracts made between the sureties and the creditor, and seemed to be of opinion that in such circumstances the section would not have been applicable. It is to be noted, however, that the decision of the two earlier cases did not go on this question at all. But this is an indication of the view of the Court that bonds taken outside the Court are not within the section. The position then is that there are contradictory rulings under the old Code in the Calcutta High Court and language in a modern decision by the High Court of Calcutta which is against the appellant, while the language in Thirumalai v. Ramayyar 13 M. 1 : 4 Ind. Dec. (N.S.) 711 seems to be in his favour. I find it impossible to express a confident opinion on the point But as at present advised I think that considering that the language of the various Sub-sections can be referred to specific provisions of the Code, and considering that the object of the section is to allow execution against a person who is not a party to the suit or legal representative, it is more proper to confine it to cases where the liability has been entered into in the face of the Court or has been recorded by the Court in accordance with the provisions of the Code.

(2.) The result will be that the civil miscellaneous second appeal succeeds and the judgment of the District Munsif must be restored with costs here and in the lower Appellate Court. Sadasiva Aiyar, J.

(3.) I agree and only wish to add with the greatest respect to the learned Judges who decided the case in Lakshmi Narain Khanna v. Guru Datta Mehra 16 Ind. Cas. 859 that I agree neither with the reasons for the decision nor with the actual decision, even having regard to the particular facts of that case. I do not think that the fact that the Court itself stayed the execution on the report made to it of security having been given outside the Court, would enable the Court to allow the security to be realised in execution. The only security which could be so realised is one to be furnished to the Court or at least filed in Court.