Mayan vs Chathappan

The main question aruged in this second appeal is whether the plaintiff is entitled to maintain the suit against the second defendant, the surety. It

is contended on the one side that the bond executed u/s 5,Act XXVII of 1860, was executed in favour of the District Court of North Malabar and

that plaintiff cannot sue the surety unless the Court assign that bond to him. On the other hand, it is argued that the second defendant undertook a

liability to any person whom a competent Court declared to be the rightful heir of Kunkan Menon and that he was therefore under an obligation to

pay the plaintiff. The decision must depend upon the construction which we put upon Section 5. That section authorizes the Court to take security

from the person to whom a certificate is granted (1) for rendering an account of debts collected, and (2) for the indemnity of persons who may be

found to be entitled to moneys received by the certificate holder and whose right to recover the same against the certificate holder is not affected

by the Act. On referring to the bond, we observe that it purports to be executed to the District Court of North Malabar and that the appellant

undertook in default of payment by Paidel Nayar of any amount ordered by the Court up to and not exceeding Rs. 17,000 to pay the said sum in

cash. As further security, he mortgaged certain properties specified in the bond. The natural construction to be put upon the section is that the

surety enters into a contract with the District Judge for the time being to guarantee the rendering of an account and to indemnify to the extent of the

sum mentioned therein. Although the bond was intended for the benefit of persons like the plaintiff there was no privity of contract between him

and the executant and in the absence of any special provision in the act we must hold that the plaintiff was not entitled to maintain this suit without

first obtaining an assignment of the bond from the District Court. No case has been cited on either side, but the language of Section 5 and the terms

of the bond are inconsistent with the contention of the respondent that the obligation was a statutory obligation which the plaintiff was entitled to

enforce without reference to the District Court.

Under these circumstances, we reverse the decrees of the lower Courts so far as the second defendant (appellant) is concerned and dismiss the

suit as against him with costs throughout.

For the same reasons S.A. No. 1105 is decreed, and the decrees below are reversed and the suit dismissed with costs throughout.