P. Raminaidu and others vs P. Venkata Naidu and another

Subba Rao, C.J.—This is a Letters Patent Appeal against the Judgment of our learned brother, Satyanarayana Raju J.

The respondents filed O. S. No. 62 of 1950 on the file of the Court of the Subordinate Judge. Srikakulam, for partition of the plaint schedule property. "The defendants are the other members of the family. On the pleadings as many as twelve issues were framed. The main contention of the parties centered round the point, whether all or any of the properties were joint family properties.

The learned Subordinate Judge, on a consideration of the entire oral and documentary evidence in the case, came to the conclusion that the family was a joint undivided Hindu family, that some items were admittedly ancestral properties and that other items were purchased by the 1st defendant as his self acquisitions. On those findings he gave a preliminary decree for partition of the properties held to be joint family properties and dismissed the suit in regard to the properties found to be the self-acquisitions of the 1st defendant. The plaintiffs preferred A. S. No. 1086/53.

In the appeal the plaintiffs raised the plea, among others, that all the properties belong to the family. The question falls to be considered on the consideration of the oral and documentary evidence adduced in the case. A perusal of the judgment discloses that the question is an arguable one and depends upon the view that the High Court ultimately takes on the evidence in the case.

The suit was disposed of on 24-4-1953. The plaintiffs preferred the appeal on 5-10-1953 and it was duly numbered on 2-11-1953. The 1st defendant died on 2-1-1954. After the appeal was admitted, the respondents prosecuted the appeal diligently. They pointed out portions for printing and even paid an amount of Rs. 360/- on 6-9-1954 towards the printing charges.

On 13-12-1954, that is. more than a year after the appeal was admitted and more than 11 months after the appellants made an appearance, they took out an application for directing the respondents to furnish security for costs. In the petition they alleged that there were no merits in the appeal and that the respondents were trying to alienate the properties.

In the affidavit no particulars of any attempts made by the respondents for alienating the properties were given. The affidavit also does not disclose that the respondents are guilty of either vexatious or contemptuous behaviour in the execution proceedings. In the circumstances, the appellants base their case only on the allegations that the appeal was frivolous and on a vague allegation that the respondents were trying to alienate the properties.

Satyanarayana Raju, J., held that the aforesaid circumstances were not sufficient for directing the respondents to furnish security and therefore dismissed the application.

Order 41 Rule 10 (1) governs the situation. It reads :

The appellate court may in its discretion, either before the respondent is called upon to appear and answer or afterwards on the application of the respondent, demand from the appellant security for the costs of the appeal, or of the original suit, or of both.

Provided that the court shall demand such security in all cases in which the appellant is residing out of India, and is not possessed of any sufficient immoveable property within India other than the property (if any) to which appeal relates.

We are not here concerned with the proviso and therefore it may be ignored for the purpose of the present appeal:

Rule 10(1) confers a power on an appellate Court in exercise of its discretion to demand security from the defeated party. It is intended to enable a successful, party to cover his risk. The discretion must be exercised in accordance with the rules of law, justice and reason, but otherwise, subject to the proviso, the matter is essentially one of practice and procedure, regarding which uniformity is desirable.

The decided cases have laid down some workable rules to guide the exercise of discretion by [courts under this Rule. The rules so evolved, while enabling the successful party to get an order for security, also protect the unsuccessful party from being unduly harassed or his appeal being stifled at the inception. To achieve that object it was held that the respondent may obtain an order for security if the appeal is frivolous and is filed only to harass him.

On the other hand, if the appeal is an arguable one, the mere fact that the appellant is poor is not in itself a ground for directing security unless the appellant is guilty of vexatious or contemptuous behaviour. If he alienates his properties pending appeal or otherwise resorts to obstructive tactics, preventing the decree-holder from executing the decree, his conduct justifies an order of security against him.

So too, the respondent, who seeks an order in his favour under the rule, shall not be guilty of laches. He shall not be allowed to stand by and after allowing the appellant to incur avoidable expenditure and after a long lapse of time, take out an application for security. To put it shortly, an order under this rule will not ordinarily be made unless the respondent is not guilty of laches and the appeal is a frivolous one. So too, an order will not be made on the simple ground of poverty of the appellant unless he is also guilty of vexatious conduct.

Recently, Umamaheswaram, J., has considered the case law on the subject in - ''Venkata Rukminiamma v. Krishnamurthy'', 1955 AP 205 ((S) AIR V 42) (A), and summed up the position at page 207 as follows:

To sum up, the practice that obtains in England after the passing of the Judicature Act is as pointed out by Jessel, M. R. to direct security for costs to be given by an appellant who would be unable through poverty to pay the respondent''s costs of the appeal if it should be unsuccessful. The High Courts of Allahabad and Bombay have taken the view that poverty of an appellant by itself does not justify an order requiring the appellant to furnish security for costs.

Though the Calcutta High Court took the same view as the High Courts of Allahabad and Bombay in the earlier cases, Rankin C. J. struck; a different note and preferred to follow the English practice. The view taken by the Madras High Court is only a via media between the view expressed by the High Courts of Allahabad and Bombay and the view of the English Courts followed by the Calcutta High Court.

In. the language of Venkatasubbarao J., in - Kuttoosa v. Kunhamma'', 1938 Mad 380 (AIR V 25) (B), the legal position is as follows :

The proposition is well established that the appellant''s poverty by itself would not be sufficient to warrant his being required to furnish security. That has not been seriously disputed here, but surely that does not mean that the appellant can rely upon his own poverty as being an important or decisive factor, and resist the application on that ground.

The summary, if we may say so with respect, correctly gives a gist of the decisions. In our view it is not advisable to follow the practice in England as the circumstances obtaining there radically differ from those obtaining in India. We think the correct view is that of the Madras High Court. Mr. Justice Venkatasubbarao in his judgment has correctly summarised the law on the subject and we respectfully follow the same.

But the learned Judge Umamaheswaram proceeds to observe thus:

In view of the conflicting decisions referred to supra, the proper course appears to be to address myself to the terms of O. 41, R. 10, Civil P. C., which are very wide and which leave an unfettered discretion to be exercised by the appellate Court. Both the interests of the appellant and the respondent have to be secured or safeguarded by the appellate Court. The respondent, who had succeeded in the suit, ought not to be harassed by a poor litigant and deprived of his costs or suit and appeal.

At the same time the poor litigant, who is aggrieved by a manifestly wrong judgment of the trial Court, ought not to be prevented from prosecuting such an appeal by an oppressive order requiring him to furnish security for costs. The discretion should be judicially exercised on the facts of each particular case.

With a slight modification which we will refer immediately, the said conclusion of the learned Judge is also an acceptable one. But at page 206 the learned Judge says :

So, in my opinion, the respondent herein has not made out a prima facie case. He has not satisfied me that the judgment of the Court below is manifestly wrong.

From the aforesaid statement it appears that the learned Judge is of the view that unless the judgment of the Court below is manifestly wrong the applicant will be entitled to an order of security for costs. The same words, "manifestly wrong" have been again repeated, by the learned Judge when he expressed his view after considering the case law on the subject.

If the learned Judge meant that security for costs should be ordered if the appeal was frivolous we have no quarrel with the proposition, but if he meant that the judgment of the lower Court must obviously be wrong, that is, it must be such as must be allowed by the appellate Court, we cannot agree with the learned Judge, It would mean that at the time when the application under O. 41 R. 10 is heard, a Court will have to come to a conclusion on the bare reading of the judgment-for that would only be available at that stage-that the judgment of the lower Court was manifestly wrong.

This construction would have the effect of stifling arguable appeals at the inception, for, the penal consequence of the security for costs not being given pursuant to an order made under O. 41 R. 10, is to dismiss the appeal. This interpretation of the Rule would work a great hardship against poor parties.

We would, therefore, modify the view expressed by the learned Judge to the effect, namely, that at the time of filing the application, the question the Court will have to consider is not] whether the judgment of the lower Court is manifestly wrong but whether the appeal is frivolous.

As aforesaid, the appeal was arguable. The respondents were not guilty of any vexatious conduct in execution proceedings. The only thing that could be said against them is that they have no sufficient property. As the decided cases have held, that in itself is not a ground for ordering security. The order of the learned Judge is correct.

The appeal fails and is dismissed with costs.