Eapen Chacko vs Korathu chandy and Others

Nandana Menon, J.—The sole question that arises for consideration here is about die liability of the first Appellant as a surety. Lie stood as a surety for the Defendant in O.S. 882 of 1088. The bond executed is not before Court. But it is admitted that as j?er the bond he undertook to discharge the decree liability to the extent of Rs. 3,000. After the decree became final execution was taken out by the decree-holder. The one wide which we are concerned now is E. P. 843 of 1124 filed on 21-11-1124. The decree was sought to be executed against the first Appellant, the first surety, it being stated that no relief was wanted as against the other two sureties. The first Appellant filed C. M. P. 3207 of 1125 by way of objection, one of the contentions raised being that he was not liable for any interest on the amount specified in the surety bond, there being no provision regarding the same. The decree-holder has no case that there was any definite stipulation making "the surety liable to pay any interest, his only contention in C. M. P. 4832 of 1950 filed by, him in reply to die objections being that the objection of the surety regarding interest cannot stand and that interest as allowed by the decree can be recovered from the surety also. So what has to be considered is whether when the bond stipulates that the liability of die surety is for Rs. 3,000 in a case a decree was passed, against the judgment-debtor he can be made liable for interest also on the ground that the decree had provided for the same and his liability was co-extensive with that of the judgment-debtor. Both the Courts below have held that the surety is liable for the interest. What the lower appellate Court says is that there being no objection Tiled by the surety in prior execution petitions and in view of the admitted liability for the principal amount he is also liable to pay interest on die said amount and hence as per Section 31 of the Travancoro CPC then in force the surety was liable for interest to the extent of Rs. 3,000. Now, on behalf of the first Appellant it is contended that the surety ''bond is to be strictly interpreted, diat when there is no provision in it making die surety liable for interest a Court cannot allow the decree-holder any relief with regard to the same and ho was at liberty to raise this objection even dough it be for the first time in the present execution proceedings themselves. It is a well-known principle that in equity and in law a surety bond is to be strictly construed. When a third party undertakes the liability ho cannot be fastened with any which he does not consciously agree to. The surety bond is tho document which embodies the details of his liability. In Maharaja of Benares v. Har Narin Singh, ILR 28 All 25 (A), cited on behalf of the Appellants the sureties undertook to pay arrears of rent of the lease-liold which was the subject matter of did suit in case the lessee defaulted. In execution of the decree the decree-holder claimed that under the bondl the sureties were liable for interest also. It was held data when the bond reefers only to the liability to pay arrears of rent that sureties cannot be fastened with a liability for into reset. There at page 27 it was observed as follows after referring, to the relevant provision in the bond 4| there:

It seems to us that upon die true construction of this surety bond, the executants intended to be, responsible for the rent, and for the rent alone. If it had been in the contemplation of die parties to give security not merely for the arrears of rent butgi also for interest it would, we think have been stated, and tho passage in the bond to which W6|jr have referred would have contained some such words*! as "with interest diereon". Therefore, this we think, a case to which the ordinary rule according to which die liability of a surety is co-extensive wit the liability of die principal is applicable.

Chacko Joseph v. Raman Pillai Bhaskaran Nai 1950 Ker LT 203 (B), also supports the appellant'' position that he is not liable for any other item that specifically mentioned in the surety bond, the present case also it is not proved diat there it a provision in the bond regarding the liability of the surety to pay any interest. Hence it follows that the lower Courts were wrong in holding that there was such a liability. The liability of die first appellant surety is only to the extent of Rs. 3,000 mentioned in the bond. As there was no prior adjudication of this point in tho previous proceedings there is no bar to raise it in the present execution proceedings.

In die result, the appeal is allowed accordingly with costs.