Raja Pertabgeerjee vs Rasheed Shawpoorji Chenai and another

Mohammad Ahmed Ansari, J.—The decree-holder is the appellant. He has been his favour a decree for Rs. 1,10,000/- against Dara Shahpurji who is the brother of Rashi Shahpurji. In proceedings for the arrest of the judgment-debtor the brother stood surety for producing him in Court. The executing Court had directed him to be surety for the entire decretal amount; but by an appellate order has liability was reduced to Rs. 50,000/-. Rashi Shahpurji had, therefore, undertaken to be surety for Rs. 50,000/- if his brother failed (sic) appear in the execution proceedings.

On Aban 22, 1345 F. the judgment-debt did not appear and his advocate promised have him present on Aban 26. He was age absent and the Court thereafter issued notice to the surety. The notice was offered to the surety at his house; but he refused to take On Aban 29, 1354 F. the Court recorded statements of the process server and another who had accompanied him. Another notice was issued and on Dai 18, 1355 F. the surety place that the Court had never ordered the surety produce the judgment-debtor and, therefore, proceedings concerning the forfeiture of surety bond could not be proceeded with.

The executing Court has however pass no judgment on the merits of the defence; on Shehrewar 14, 1356 F. a compromise arrived at between the decree-holder and judgment-debtor. Under this compromise Shahpurji, the judgment-debtor, was to Rs. 60,000/- and after the payment he was be discharged. The decree-holder however served his right of proceeding against prop called Shahpurwadi.

It appears that the decree-holder had proceeded against this property, whereupon RASHI Shapurji had pleaded that it was his pro(sic) because the brother had released his share the property in his favour. This objection dismissed. Thereafter a suit was file Rashi Shapurji which was allowed an appeal by the decree-holder was pe(sic) in the High Court when the compromise between the decree-holder and the judgment-debtor was arrived at. The decree-(sic) by the aforesaid agreement reserved to his the right of proceeding against the pre(sic) should his appeal be allowed and the pre(sic) become thus available for purposes of execution of the decree.

The next important covenant under agreement is that no other property o(sic) judgment-debtor would be attached nor execution of the decree, nor would he be ed nor in any way proceeded against in tion of the decree. The learned Judge execution Court has held that because compromise the judgment-debtor''s liability become discharged, and the decree-hold not thereafter proceed against the surety has accordingly concluded the proceed against the surety. The appeal before against the aforesaid order.

The advocate of the decree-hole argued that his client was entitled to the decretal amount from the two persons and because one of such persons, the judgment-debtor has been released the surety is not discharged. In support of his argument he relies on B. Jang Bahadur Singh and Others Vs. Basdeo Singh and Others, . He also relies on Raja Jaswant Rao v. Mahboob Ali, 31 Deccan LR 48 C). The aforesaid authorities have held that (sic)s. 134 and 137 of the Contract Act do not apply to the surety who had guaranteed an act in execution proceedings.

The Hyderabad case lays down no different ''reposition of law. We are of the view that the correct legal position is that where the principal debtor is discharged, the decree-holder cannot proceed against the surety without express reserving such a right in the document discharging the judgment-debtor. There are cases which we will presently refer that the general(sic)le governing the release of surety applies to represent who has became surety in execution on proceedings also so that if the principal debtor is released by the creditor, the Surety also discharged.

This connection we would refer to official Liquidators, T.N. and Q. Bank Ltd. Vs. Official Assignee, Therein a surety had executed a surety bond in favour of (sic) Court in pursuance of an order setting aside ex parte decree against a debtor. The debtor ok out an application under S. 234 of the (sic)mpanies Act for leave to compound with the (sic)ditor, who were the Official Liquidator.

The creditor agreed to a composition at 8 has in the rupee without the consent of the surety and an order was made accordingly. In (sic)se circumstances, the surety was held discharged. Leach C. J. observed at p. 711 (of ILR (sic)d): (at p. 396 of AIR):"It is a fundamental rule* of law that surety relieved from liability if the creditor com(sic) (sic)nds or gives time to the principal debtor (sic)out his consent. The surety was not made arty to the application and the (sic)er which was passed on that application was (sic)sed with the consent of the creditor. Clear; amounted to a compounding with the deb(sic) and allowing him time to pay the reduced (sic)unt. Therefore the decision of the learned (sic)ge that the Official Assignee is entitled to security must be upheld."

(sic)rence may also be made to an earlier (sic)of Annadana Jadaya Goundar Vs. Konammal and Another, wherein It been held that the principle of granting without the consent of the surety to his principal discharges the surety & is subject to one (sic)ption namely, that though time is (sic)sed by the creditor to the principal debtor agreement with him, nevertheless under the (sic)ment the creditor''s right to proceed at against the surety is reserved. AIR 1944 428 (Lahore) ) and Parvatibai Harivallabhdas Vani Vs. Vinayak Balvant Jangam, , also support the proposition.

58 Andh-Pra. D.F./33

We therefore have no hesitation to hold that the effect of the compromise between the judgment-debtor and the decree-holder in the case before us is to discharge the judgment-debtor on payment of Rs. 60,000/-. We also hold that the aforesaid debtor was given time. The surety was, therefore, not liable thereafter. A typed copy of the compromise has been made part of the record of this case, which clearly shows an express Under taking that on payment of Rs. 60,000/- the judgement-debtor would not be proceeded against any further in execution of the decree in any manner whatsoever.

The right to realise money from Shapur wadi is postponed till the decision of the appeal, which means the judgment-debtor has been given time. There is, therefore, a compromise in the case, where under the main judgment, debtor on payment of Rs. 60,000/- was released from the decretal liability. That amount has been paid by cheque. Moreover the release therefore is not subject to reservation of rights against the surety. In these circumstances, we see no force in the appeal, which is dismissed with costs to the surety respondent.