Shyam Prosono Katari vs Keshab Chandra Rana

Jwala Prasad, J.—There is no substance in this appeal. The appellant executed a surety bond as a result of which the judgment-debtor, who was arrested in execution of a decree against him, was released.

On the dismissal of the judgment-debtor to be declared, insolvent, the decree-holder applied to the Court for directing the appellant to produce the judgment-debtor who was released on his surety. Notice of this application was served upon the appellant and he was directed to produce the judgment-debtor, as appears from the order of the Court passed on the 26th November 1920 wherein the Court expressly states: "Notice duly served on surety." The appellant failed to produce the judgment-debtor; even ho himself did not appear in Court. The execution case was dismissed.

The decree-holder now seeks to enforce the terms of the security bond executed by the appellant and has proceeded to realise the decretal amount from the appellant.

The learned Vakil on behalf of the appellant contends that his liability under the aforesaid surety bond ceased upon the dismissal of the execution case in which the surety bond was filed. In support of his contention he has relied upon the cases of Lalji Sahay v. Odoya Sunderi Mitra 14 C. 757 : 7 Ind. Dec. (N.S.) 502, Koylash Chandra Shaha v. Christophoredi 15 C. 171 : 7 Ind. Dec. (N.S). 698, Nirus Naryan v. Peari Dai Debi 21 Ind. Cas. 612. All these cases were considered in a later decision of the Calcutta High Court in Ajitulla Sarkar v. Nandoor Mohammad 43 Ind. Cas. 464 : 22 C.W.N. 919. The principle of this last case in the Calcutta High Court was adopted by this Court in the case of Dedhraj v. Mahabir Prasad 57 Ind. Cas. 303 : 5 P.L.J. 417 : 1 P.L.T.604, though in circumstances not very similar to those of the present case. In the same direction is the decision in the case of Sundara Reddi v. Varadharaja Pillai 34 Ind. Cas. 407; (1916) 2 M.W.N. 273,

Apart from the principle deducible from the decided cases, the contention of Mr. Roy does not seem to be supported by the plain wording of Section 55, Clause 43 Ind. Cas. 464 : 22 C.W.N. 919 of the Civil Procedure Code. The liability of a surety under that section enures for the benefit of the Court as well as for the decree-holder. The Court accepting security may enforce it, failing which the decree-holder is equally entitled to enforce the same in any way that may be open to him for he is the ultimate beneficiary under the security bond. No doubt under the old CPC sometimes it used to be contended that the remedy of the decree-holder against the surety was only by means of a regular suit in order to save the decree-holder from the trouble, inconvenience and expense of bringing a suit to enforce the security bond, the present Code u/s 145 gives him a right and opportunity to enforce the bond in execution proceedings. That section says

Where any person has become liable as surety

(a) for the performance of any decree or any part thereof, or

(b) for the restitution of any property taken in execution of a decree, or

(c) for the payment of any money, or for the fulfilment of any condition imposed on any person, under an order of the Court in any suit or in any proceeding consequent thereon,

the decree or order may be executed against him, to the extent to which he has rendered himself personally liable, in the manner herein provided for the execution of decrees, and such person shall, for the purposes of appeal, be deemed a party within the meaning of Section 47.

The section is plain and does not need any comment.

Therefore, if the appellant as surety in the present case made himself liable for the performance of the decree or any part thereof, the decree-holder is entitled to enforce the bond by executing the decree against him in execution proceedings. The execution proceedings referred to therein are not in any way connected with the execution proceedings in which the security bond was filed but it may be any execution proceedings. The contention of the learned Vakil that the liability of the appellant ceased with the dismissal of the execution case in which the bond was filed must, therefore, fail.

The next contention is that under the terms of the bond he was only liable in case the insolvency petition was not filed ou behalf of the judgment-debtor and inasmuch as in this case the judgment-debtor filed an insolvency petition which proved to be abortive, the liability of the surety does not arise under the bond. This is not a correct reading of the surety bond. The appellant''s liability arose on two conditions independent of each other, namely, (1) the failure of the judgment-debtor to apply for insolvency within one month and (2) his failure to present himself to the Court on the direction of that Court. The appellant''s liability, therefore, arose on account of the failure of the judgment-debtor to appear in Court after the insolvency petition was dismissed and he was called upon to appear. The bond expressly recites that in the events aforesaid the surety do promise to cause the judgment-debtor to be present in Court failing which "the decretal amount shall be realised" from him. Apart from Section 55, Clause (4) the surety bond in itself is a clear undertaking on the part of the appellant to produce the judgment-debtor in Court, failing which to pay the entire decretal amount. The bond is, therefore, enforceable u/s 145 in execution proceedings against the appellant.

We, therefore, agreeing with the view taken by the Court below, dismiss the appeal with costs.

Kulwant Sahay, J.

I agree.