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Manubhai Chunilal Vs. the General Accident Fire and Life Assurance Corporation Limited - Court Judgment

LegalCrystal Citation
SubjectProperty;Limitation
CourtMumbai
Decided On
Case Number O.C.J. Appeal No. 34 of 1935 and Suit No. 814 of 1934
Judge
Reported inAIR1936Bom363; (1936)38BOMLR632; 165Ind.Cas.672
AppellantManubhai Chunilal
RespondentThe General Accident Fire and Life Assurance Corporation Limited
DispositionAppeal allowed
Excerpt:
limitation - administration bond, suit on-starting point of limitation in suit on such bond against sureties-limitation to run from date of assignment of bond-indian limitation act (ix of 1908), articles 68 and 120-indian succession act (xxxix of 1925), sections 291 and 292-probate and administration act (v of 1881), sections 78 and 79- practice as to administration bonds-law relating to taking of administration bonds traced and discussed-practice-procedure.;a suit to enforce a bond, which has been taken in pursuance of the provisions of sections 78 and 79 of the probate and administration act, 1881, which are re-enacted in sections 291 and 292 of the indian succession act, 1925, by a person to whom it has been assigned under section 292 is governed by article 120 of the indian limitation.....john beaumont, kt., c.j.1. this is an appeal from a decision of mr, justice black-well. the plaintiffs are suing the defendants as the sureties upon an administration bond, and the learned judge dismissed the suit on a preliminary issue of limitation.2. the facts are not in dispute. on october 21, 1920, one chunilal motilal died intestate, leaving two minor sons, who are the plaintiffs. on july 14, 1921, leave was given to nathalal motilal to apply for letters of administration. on november 24, 1921, the said nathalal motilal, and the defendants, as sureties, entered into a bond, which is exhibit a, for payment to pheroz behramji malabari, registrar of this court in its testamentary and intestate jurisdiction, and william j. howard, acting assistant prothonotary, their executors,.....
Judgment:

John Beaumont, Kt., C.J.

1. This is an appeal from a decision of Mr, Justice Black-well. The plaintiffs are suing the defendants as the sureties upon an administration bond, and the learned Judge dismissed the suit on a preliminary issue of limitation.

2. The facts are not in dispute. On October 21, 1920, one Chunilal Motilal died intestate, leaving two minor sons, who are the plaintiffs. On July 14, 1921, leave was given to Nathalal Motilal to apply for letters of administration. On November 24, 1921, the said Nathalal Motilal, and the defendants, as sureties, entered into a bond, which is exhibit A, for payment to Pheroz Behramji Malabari, Registrar of this Court in its Testamentary and Intestate Jurisdiction, and William J. Howard, acting Assistant Prothonotary, their executors, administrators and assigns of the penal sum of Rs. 1,76,682, which was double the value at which the estate was sworn. The conditions of the bond which was in the usual form, were, first, that Nathalal Motilal should make a true and perfect inventory of the estate of the deceased Chunilal Motilal, and file it in Court; secondly, that he should well and truly administer all property of the deceased coming to his hands; and thirdly, that he should duly account for his administration. In the year 1929 Nathalal Motilal died, and the date of his death has been assumed as December 31, 1929. On June 10, 1931, plaintiff No. 1 attained his majority, and on September 7, 1933, plaintiff No. 2 attained his majority. On May 10, 1934, the Testamentary Judge made an order for the assignment to the plaintiffs of the administration bond, and on June 1, 1934, the bond was duly assigned by the officers of this Court, in whom it was then vested, to the plaintiffs. This suit was filed on June 6, 1934.

3. The learned Judge held that the suit was a suit upon a bond subject to a condition, and was governed by Article 68 of the Indian Limitation Act, that the conditions of the bond had been broken at the latest on the death of Nathalal, and that in consequence all rights under the bond had become barred by limitation at the date of the assignment of the bond to the plaintiffs, and that the plaintiffs' suit was, therefore, time-barred.

4. If the decision is right, the operation of the Indian Limitation Act has produced an unfortunate result, and the practice of this Court in relation to administration bonds would seem to require revision. The object of all statutes of limitation is to penalise persons who sleep upon their rights, and exceptions are always made in favour of persons under disability and unable to enforce their rights. An administration bond is taken in the name of officers of the Court for the security of those interested in the due administration of the estate. It is not contemplated that the officers of the Court will themselves take action to enforce the bond, and they are usually not in a position to know when the conditions of the bond have been broken. It would certainly be unfortunate if persons beneficially entitled to an estate misappropriated by an administrator find, on attaining majority, that their rights on the bond are barred because an officer of the Court has omitted to take action, which it was never in contemplation that he would take. In my opinion, however, the decision of the learned Judge is not correct.

5. The decision having been given upon a preliminary issue, the dates of the alleged breaches of the conditions of the bond have not been ascertained. The Advocate General, on behalf of the defendants, admitted that Nathalal died on December 31, 1929, and the learned Judge assumed from such admission that all possible breaches of the bond must have occurred before that date, though that fact was not admitted by the plaintiffs. In my opinion, we cannot make such an assumption. The principal obligation under the bond was to administer the estate well and truly, and it seems to me impossible to say that that condition was necessarily broken until some person, who was able to give a valid discharge for the estate, claimed it from the administrator or his representatives, and failed to obtain it. That date did not arise until, at any rate, plaintiff No. 1 attained his majority, which was less than three years before the suit was filed. So that even upon the assumption that Article 68 applies to the case, it is, in my opinion, impossible to hold on a preliminary issue that the suit is barred by limitation.

6. Apart from that, however, in my opinion, the suit is not governed by Article 8, and to explain my reasons for so holding it is necessary to refer to the law relating to the taking of administration bonds. By Clause 45 of the Letters Patent, dated December 8, 1823, founding the Supreme Court of Bombay, it is provided that every person to whom letters of administration shall be committed shall give sufficient security by bond to the Registrar or Chief Clerk of the Supreme Court for the payment of a competent sum with two or more able sureties. By Clause 46 it is enacted that to put the bond in suit for the sake of obtaining the effect thereof for the benefit of any per son interested therein, such person shall, by order of the Court, be allowed to sue for the same in the name of the obligee, and that the bond shall not be sued in any other manner. The powers of the Supreme Court were transferred to this Court by Clause 34 of the Letters Patent of June 26, 1862. It is clear, however, that the present suit is not a suit founded on the Letters Patent, because it is not brought in the name of the original obligee, but in the name of the person interested in the estate. The other powers of this Court relating to the grant of administration bonds are now contained in Sections 291 and 292 of the Indian Succession Act of 1925, which are substantially in the same terms as Sections 78 and 79 of the Probate and Administration Act, 1881. Section 291 provides that every person to whom any grant of letters of administration is committed shall give a bond to the District Judge with one or more surety or sureties engaging for the due collection, getting in, and administering the estate of the deceased. Section 292 provides that the Court may, on application made by petition and on being satisfied that the engagement of any such bond has not been kept, and upon such terms as to security, or providing that the money received be paid into Court, or otherwise, as the Court may think fit, assign the same to some person, his executors or administrators, who shall thereupon be entitled to sue on the said bond in his or their own name or names as if the same .had been originally given to him or them instead of to the Judge of the Court, and shall be entitled to recover thereon, as trustees for all persons interested, the full amount recoverable in respect of any breach thereof. The expression ' District Judge ' is defined as meaning the Judge of a principal civil Court of original jurisdiction, and the provisions of the Indian Succession Act and the earlier Acts which those provisions replaced have always been treated by the High Courts in India as extending to them. In Calcutta it appears from the case of Debendra Nath Dutt and Banku Behary Banerjee V. Administrator-General of Bengal I.L.R. (1906) 33 Cal. 713 affirmed by the Privy Council in Debendra Nath Dutt v. Administrator-General of Bengal I.L.R. (1908) Cal 955 : 10 Bom. L.R. 648, that administration bonds under Section 291 are taken in the name of the Chief Justice as corresponding as nearly as may be in the High Court to the District Judge as defined in the Act. In this Court it has been the practice for many years past to take administration bonds in the names of two officers of the Court, the view no doubt being that it is generally prudent to place valuable securities in the names of two persons rather than in the name of one. The taking of the bond in the name of the Chief Justice, or of a Judge, is a ministerial act, which, I apprehend, can be delegated to a subordinate officer. I feel no doubt, therefore, that in the present case the bond was taken in the names of officers of the High Court pursuant to the provisions of the Probate and Administration Act, 1881, which are re-enacted in Sections 291 and 292 of the Indian Succession Act, 1925, and the question is whether a suit on a bond so taken falls within Article 68 of the Indian Limitation Act. I agree that such a bond is a bond upon a condition, but I do not agree that a suit to enforce the bond by a person to whom it has been assigned under Section 292 is a suit upon a bond within the meaning of the article. In my opinion, an assignment under Section 292 is not a mere link in the title to the bond, but confers substantive rights upon the assignee. The assignee need not be a person entitled to the whole, an indeed any part of the estate. He is entitled to sue in his own name as if the bond had been originally given to him and all moneys which he recovers under it he holds as trustee for the persons interested in the estate. If the plaintiff sued on the bond relying on the assignment as a mere link in his title, he might be met with the defence that the obligees under the bond were mere custodians of it, and had no power to assign it without consideration to a third party. In order to meet such a defence the plaintiff would have either to rely on the statutory rights and obligations conferred and imposed upon him by the assignment, or else to prove his title as the person beneficially entitled to the estate. In either case his suit is not a suit merely on the bond, but is a suit on the bond coupled with the statutory assignment or proof of title to the estate, and the case seems to me to fall under Article 120, and not under Article 68. I am not prepared to agree with the case of Maung San U V. Maung Kyaw Mye I.L.R. (1923) Ran. 463, on which the learned trial Judge relied.

7. I am further of opinion that, whatever article of the Indian Limitation Act applies, Section 292 of the Indian Succession Act provides a new starting point of time for the purposes of limitation. The assignee under Section 292 is entitled to sue on the bond and to recover the full amount recoverable in respect of any breach thereof. The learned trial Judge considers that Section 292 deals merely with procedure, and confers no substantive right, and that the words ' the full amount recoverable in respect of any breach thereof' mean the amount recoverable in law at the date of the assignment, and as, in his opinion, the right of the original obligees to recover under the bond had become barred at the date of the assignment, the plaintiffs, in terms of the section, can recover nothing thereunder. In my opinion that is not the right construction to place upon the section, which expressly provides that upon the assignment being made, the assignee may sue in his own name and recover upon the bond. The learned Judge ignores this provision and holds that the assignees in the present case cannot sue or recover anything upon the bond. What may be recovered is ' the full amount recoverable in respect of any breach of the bond ' which, in my view, merely means the loss for which the obligors under the bond are liable. If that is the right meaning of the section, the assignee acquires by virture of the assignment, a fresh and independent cause of action. I do not agree with the learned Judge's view that Section 292 deals only with procedure. As I have already pointed out, it seems to me to confer substantive rights, and I see no reason why the Legislature should not have intended by such section to provide a new starting point for purposes of limitation. It must have been apparent to the Legislature that even if the District Judge has power to sue to enforce the bond under Section 291, (as I think he had, notwithstanding the argument of the appellants' counsel to the contrary), it was in the highest degree improbable that he would ever exercise such power, and thereby incur the risk of having to pay costs. It must have been apparent to the Legislature that the normal, if not universal, method of enforcing the bond would be under Section 292, and it would be in accordance with the principles underlying the Indian Limitation Act to provide that time should run against the persons suing on the bond from the moment at which they first acquired a right to sue. It was argued by Mr. Bahadurji for the defendants that to attribute that meaning to Section 292 might involve hardship upon a surety, because an adult beneficiary might delay for many years obtaining an assignment. But the answer to that is that the District Judge is not bound to assign the bond, and if he was satisfied that the persons interested in the estate had been guilty of unreasonable delay in applying for an assignment, he could refuse to sanction it.

8. For the above reasons I am of opinion that the plaintiffs' right to sue is not barred by limitation, and that this appeal must be allowed with costs, and the suit remitted to the lower Court to be dealt with on the merits.

9. Respondents to pay costs of the preliminary issue as to limitation in the lower Court, and of the appeal.

Rangnekar, J.

10. This appeal is taken from a judgment of Mr. Justice Black-well, dated July 4, 1935, dismissing the action. The question raised by the appeal is of considerable importance and relates to the exact nature and scope of an administration bond taken by the High Court in its Testamentary and Intestate Jurisdiction before, the grant of letters of administration to a person, and the period of limitation within which an action to enforce the bond has to be brought.

11. The facts shortly stated are as follows: One Chunilal Motilal died intestate on or about October 21, 1920, leaving him surviving two sons, the plaintiffs, as his only heirs and next-of-kin and leaving considerable moveable property. The plaintiffs were minors at the date of the death of their father. Plaintiff No. 1 attained majority on or about June 10, 1931, and plaintiff No. 2, on or about September 7, 1933.

12. On or about July 22, 1921, the plaintiffs' uncle Nathalal applied to this Court for letters of administration to the estate of the deceased for the use and benefit of the plaintiffs limited until either of them attained majority. In the schedule to the petition the properties left by the deceased were shown as being of the net value of Rs. 87,240-13-3 and consisted of shares in joint stock companies, moneys due under a life policy, cash and deposits in banks, and a share in a firm known as Mahasukh Chandulal and Company and subsequently in the firm of Mahasukh Tyebally & Co. who were the successors and assigns of Mahasukh Chandulal & Co., in which the deceased was a partner. On the said petition it was directed that letters of administration should issue to Nathalal upon sureties being justified for the whole of the estate and an administration bond being filed, duly signed by such sureties and Nathalal. On November 24, 1921, Nathalal and the defendants as sureties executed an administration bond for payment of the penal sum of Rs. 1,76,682 in favour of Mr. P. B. Malabari, the then Testamentary Registrar of this Honourable Court, and Mr. William J. Howard, the then acting Assistant Prothonotary, their executors, administrators and assigns, subject to the conditions therein mentioned, and on December 19, 1921, letters of administration to the estate of the deceased were issued to Nathalal. The letters of administration show that they were granted to Nathalal on behalf of the plaintiffs, the minor sons of the deceased, for their use and benefit and limited until either of them should attain majority, Nathalal having undertaken to administer the estate and to make a full and true inventory of the property and credits and exhibit the same in this Court within six months from the date of the issue, or within such further time as may be extended by the Court, and also to render to this Court a true account thereof within one year from the same date, or within such further time as may be extended in that respect by the Court. By the administration bond Nathalal and the defendants and their heirs, executors and administrators bound themselves jointly and severally to pay to the obligees the penal sum of Rs. 1,76,682 upon the conditions therein stated, and the obligation of the bond was to be void upon the conditions being fulfilled.

13. The conditions of the bond were as follows:

(1) That Nathalal should make or cause to be made a true and perfect inventory of all and singular the property and credits of the deceased which had or which might come to the hands, possession or knowledge of Nathalal or of any one for him and exhibit or cause to be exhibited such inventory unto this Honourable Court at or before November 24, 1922.

(2) That Nathalal should well and truly administer according to law all the property and credits of the deceased.

(3) That Nathalal should make or cause to be made a true and just account of his administration at or before November 24, 1922.

(4) That Nathalal should deliver and pay up to such person or persons as should be lawfully entitled thereto all the rest and residue of the property and credits of the deceased which should be found remaining upon the account, such account being examined and allowed by this Honourable Court.

14. Nathalal died in 1929. At the hearing of the suit it was agreed that the date of his death should be taken to be December 31, 1929.

15. The plaintiffs alleged that Nathalal failed to file an account or inventory and to administer the estate and distribute the residue of the estate among the plaintiffs as required by law and in accordance with the conditions of the bond.

16. After Nathalal's death the firm-of Mahasukh Tyebally and Company were adjudged insolvents on or about June 9, 1930, and in the schedule filed by them in insolvency a sum of Rs. 58,087-1-0 was shown as being due to Nathalal. As a result of the scheme of composition in the insolvency proceedings, a sum equal to five annas in the rupee of the amount of the claim of each creditor was distributed among them. The trustee appointed under the scheme applied to the Court in its insolvency jurisdiction for directions regarding payment of dividend in respect of the sum of Rs. 58,087-1-0 by a notice of motion, dated January 13, 1932. Plaintiff No. 1 was served with the notice and made an affidavit in which he stated that without prejudice to the plaintiffs' claim against the defendants, plaintiff No. 1 was willing to receive the amount of the dividend. On January, 19, 1932, an order was made directing the trustee to pay Rs. 9,076-4-0 to plaintiff No. 1 and a similar sum to the Accountant General for the benefit of plaintiff No. 2. The plaintiffs had thus received Rs. 18,142-8-0, and the balance of about Rs. 40,000 is lost to the plaintiffs who alone are entitled to the estate of the deceased.

17. On May 10, 1934, the plaintiffs applied to this Court in its Testamentary and Intestate Jurisdiction for the bond being assigned to them. A chamber summons was served on the defendants, and their attorneys wrote to the plaintiffs to the effect that the claim of the plaintiffs under the administration bond was barred by the law of limitation. The defendants did not appear at the hearing of the chamber summons. An order was made on May 10, 1934, and the summons was made absolute. The order directed that on the assignment the plaintiffs or their heirs, executors or administrators should be entitled to sue on the administration bond in their name or names as if the same had been originally given to them, and should be entitled to recover thereon as trustees or trustee for all persons interested in the full amount recoverable in respect of any breach of the administration bond. Accordingly a deed of assignment was executed by Mr. Malabari and by Mr. Patel, the Prothonotary of this Court, on June 1, 1934. The deed of assignment recited the facts and the order made on the chamber summons to which I have referred. It then stated that ' in consideration of the premises the assignors hereby assign unto the assignees jointly as well as severally and their and each of their heirs executors and administrators ' the said bond and the sum secured thereby. Upon this deed of assignment the plaintiffs brought the suit, which has given rise to the present appeal.

18. The defendants put in a written statement raising various contentions, one of which was that the suit was barred by the law of limitation.

19. The suit came on for hearing on July 1, 1935, and after the issues were raised, the defendants' counsel asked the Court to try the issue as to limitation as a preliminary issue. He submitted that on the allegations in the plaint the suit was barred. Counsel for the plaintiffs submitted that the whole suit might be tried first. The learned Judge made the following order:

P. C.---I will deal with limitation, on the assumption, for that purpose, that the allegations in the plaint are accurate.

Upon that certain necessary documents were tendered by counsel for the plaintiffs, and in the result the learned Judge dismissed the action holding that the claim was barred under Article 68 of the Indian Limitation Act.

20. The first question which arises is, under what provision of the law was the bond taken and assigned to the plaintiffs? By Clause 45 of the Letters Patent establishing the Supreme Court, administrators were to give security by bond for duly administering the effects of the deceased, and the conditions of the bond are set out in the clause and they are the same as those in this case. Clause 46 provided that in case it should be necessary to put the bond in suit for the benefit of any person or persons who should appear to the Supreme Court to be interested therein, such person or persons from time to time paying all such costs as should arise from the said suit or any part thereof, such person or persons should, by order of the Court, be allowed to sue the same in the name of the obligee, and the bond was not to be sued in any other manner, and the Supreme Court was authorized and empowered to order the bond to be put in suit in the name of the Registrar or Chief Clerk, or his executors or administrators. By the Letters Patent of 1862 all the powers of the Supreme Court were transferred to the newly constituted High Court, but these provisions of law were left unaffected, as also by the Amended Letters Patent of 1865, which is the Charter which now regulates the jurisdiction of this Court. However, by Clause 44 of the Letters Patent of 1865 all the provisions of that Charter were made subject to the legislative authority in British India and the Indian legislature were given power to amend or alter any of the provisions of the said Letters Patent.

21. It will be seen from these clauses that the bond was to be taken in the name of the Registrar or the Chief Clerk, and that the only way in which it could be enforced or ' put in suit' was to sue in the name of the Registrar or the Chief Clerk. The Registrar was the nominal plaintiff. The suit, however, was to be conducted by the person beneficially interested at his expense, and he was to indemnify the Registrar or the Chief Clerk for his costs.

22. Now in the same year in which the Amended Letters Patent were issued, i.e. in 1865, the Indian Legislature enacted the. Indian Succession Act, X of 1865, Section 256 of which provided for the taking of the administration bond and under Section 257 provision was made for the first time for the assignment of such bond to the person or persons interested who could sue on it in his or their own name or names instead of the officers of the Court suing on such bond. That Act did not apply to the Hindus, but in 1881 the Probate and Administration Act, V of 1881, was passed, which applied to Hindus, and Sections 78 and 79 of which were in terms similar to Sections 256 and 257 of the Indian Succession Act of 1865. In 1925 both the above Acts were repealed, but the provisions of those Acts were re-enacted in one consolidated Act, which applied to all and which is the present Indian Succession Act, XXXIX of 1925. Accordingly, the provisions of Sections 256 and 257 of the Indian Succession Act of 1865 and Sections 78 and 79 of the Probate and Administration Act of 1881 were re-enacted in Sections 291 and 292 of the Act of 1925. Now the parties in this case being Hindus and the letters of administration having been granted in 1921, the administration bond was executed under the provisions of Sections 78 and 79 of the Probate and Administration Act, which was then in force; but as the Court below and counsel have referred to the sections of the Indian Succession Act of 1925 throughout, I shall in the course of the judgment refer to them.

23. Section 291 provides :

(1) Every person to whom any grant of letters of administration...is committed, shall give a bond to the District Judge with one or more surety or sureties, engaging for the due collection, getting in, and administering the estate of the deceased, which bond shall be in such form as the Judge may, by general or special order, direct....

24. Section 292 provides :

The Court may, on application made by petition and on being satisfied that the engagement of any such bond has not been kept, and upon such terms as to security, or providing that the money received be paid into Court, or otherwise, as the Court may think fit, assign the same to some person, his executors or administrators, who shall thereupon be entitled to sue on the said bond in his or then own name or names as if the same had been originally given to him or them instead of to the Judge of the Court, and shall be entitled to recover thereon, as trustees for all persons interested the full amount recoverable in respect of any breach thereof.

25. Under Section 291 the bond is to be taken in the name of the District Judge. The term ' District Judge ' is denned in Section 2 of the Act as the Judge of s principal civil Court of original jurisdiction, and the term ' District Judge ' has been construed by a long chain of decisions of the High Courts in this country to include a High Court Judge within the presidency-towns. Now, the bond in this case is in the name of two officers, namely, the Registrar of the Court in its Testamentary and Intestate Jurisdiction, who also was the Prothonotary at that time, and the Assistant Prothonotary. So that it does not appear to be either under the Charter or under the Indian Succession Act. Assuming, however, that the bond was issued under the Charter, the difficulty would arise that the suit is not in the name of the Registrar as the Charter requires, and further the Charter does not provide for assigning the bond to any one. Mr. Taraporewala contends that the bond was properly taken under the Indian Succession Act and in accordance with the practice of the Court in the name of two of the senior officers of the Court. Mr. Bahadurji contests this position and says that the bond was taken under the Charter.

26. Now, it is clear that the Indian Succession Act by Sections 291 and 292 does not take away the power of this Court to take the bond in the name of the Registrar. Reading both the statutes together, it seems to me that the Indian Succession Act simply gives an additional power to the High Court to take the bond in the name of the Judge and the power to assign it to any person. Accordingly, the Calcutta High Court by Rule 749 directed that the letters of administration should be granted to a person, such person having first executed the usual bond to the Registrar with two or more sureties in such sums as shall be deemed adequate to the value of the estate effected. In spite of the rule, however, in Calcutta the bond is being taken in the name of the Chief Justice as being more in accordance with the statutory provision contained in the Indian Succession Act, the Chief Justice being considered the representative of the High Court which, so far as its original jurisdiction is concerned, is the District Court referred to in the section, and it was held in the case of Debendra Nath Dutt and Banku Behary Banerjee V. Administrator-General of Bengal I.L.R. (1906) Cal. 713 that the practice was not irregular. In that case it was argued as here that the bond ought not to have been taken in the name of the Chief Justice. Dealing with that contention, Maclean C. J. observed as follows (p. 738) :-

It is said in the first instance that the bond ought not to have been taken in the name of the Chief Justice. It is questionable whether it is open to the sureties, seeing that they themselves have executed this bond, upon the faith of which letters of administration issued to Cowie, to raise this point. There is nothing substantial in it. Under section 256 of the Indian Succession Act, the bond is to be given to the Judge of the District Court, and in the case of applications on the Original Side of this Court, that must mean to a Judge of the High Court. Formerly it was the practice to take the bond in the name of the Registrar, but the matter was enquired into by Sir Richard Couch when Chief Justice, and it was decided that, having regard to the language of Section 256, the bond should be given to a Judge of the Court instead of to the Registrar, and ever since the practice has been to take it in the name of the Chief Justice. This practice has continued for 30 or 40 years.

In Madras the practice, as I understand, has always been to take the bend in the name of the Registrar. In our own Court, as the records extant show, since 1867 the practice has been to take the bond in the name of the Registrar, but since 1901 the practice was altered and it was directed that it should be taken in the name of the Prothonotary and the Assistant Prothonotary. It was felt that difficulties might arise if the Prothonotary was on leave and was not available and hence it was directed that the bond ought to be taken in the name of the Prothonotary and the Assistant Prothonotary. The question now is, whether the High Court could delegate its power to its ministerial officers. There can be no doubt that this power exists. Clause 8 of the Charter governing the High Court provides for the appointment of ministerial officers ' for administration of justice and due execution of all the powers granted and committed to the High Court by the Letters Patent. ' The Government of India Act, Section 106, gives the same powers and a further power to make rules relating to the practice of the Court. As far as possible, the Civil Procedure Code is to be applied on the Testamentary side, and Section 129 of the Code gives power to the High Court to make rules to regulate this practice. The present rule 630, (O. S. Rules and Forms, 1936), which corresponds to the old rule 593, provides :

In all cases of letters of administration save and except under Section 241, Indian Succession Act, 1925, unless the deceased is a Hindu, Muhammadan, Buddhist, Sikh or Jain and in cases of succession certificates which in the opinion of the Prothonotary and Senior Master fall under Sub-sections 3 and 4 of Section 373 two common sureties are required to the administration bond (Form No. 103) and to the succession certificate bond (Form No. 105), and the bond in each case is to be given in double the amount of the property for which the grant is to be made. Such bond in all cases shall be prepared in the Registry. (Form No. 103 or 105.)

Form No. 103 shows that the bond is to be taken in the name of the Prothonotary and the Assistant Prothonotary. The position, therefore, is clear; but it may be desirable that in order to leave no doubt on the point a rule may be framed to put the practice on a firm footing. Under the present practice the bond is taken under the Indian Succession Act in the name of its ministerial officers, and there is nothing wrong about it. In my opinion, apart from that, as pointed out by Maclean C. J., it hardly would lie in the mouth of the surety who has executed the bond to raise any objection as to its regularity.

27. Having regard to the conclusion to which I have come on the main question of limitation, it makes not the slightest difference whether the bond is treated as being taken under the Charter or under the Act.

28. The question has been raised as to whether the suit is to be brought in the name of the District Judge. Technically, of course, the District Judge can sue, but in practice he never does, for one thing, the District Judge can rarely know whether the conditions of the bonds are kept or not, and I do not think it was ever intended that the District Judge was himself, or the Court officers in whose name the bond was taken were themselves, to take action to enforce the bond. The whole scheme, whether under the Charter or the Indian Succession Act, is that the bond is taken in the interests of the persons beneficially entitled to the estate, and somebody has to move the Court to take action in the matter. The only intention of the Legislature is to safeguard the interests of the persons entitled to the estate. It is obvious that serious difficulties would arise if it were held otherwise. Mr. Taraporewala argues that the bond being given to the District Judge in his official capacity, if he sues, the suit will have to be brought in the name of the Secretary of State, and in that case limitation would be sixty years under Article 149. There is considerable force in the argument, but I do not think it necessary to pursue the point, as here the suit is on an assignment.

29. Having cleared the ground of some of the points discussed at the bar, I now turn to the main question of limitation. The question is, when is the bond to be assigned, for upon that the question as to what article of the Indian Limitation Act can apply depends. Now, it is clear that until there is a breach of the condition of the bond the right of the creditor (I will use that expression for brevity's sake) cannot come into existence. When can then it be said that breach has occurred in such a case ?

30. Now, it is clear that there are at least four conditions laid down in the bond, and they correspond to the duties which the person to whom letters of administration are granted has to perform. An administrator under the administration bond has to do the following acts :

(1) to file an inventory showing assets and liabilities;

(2) to file an account showing the assets which have come into his hands, and the manner in which they have been disbursed;

(3) to administer the estate properly; and

(4) to pay the residue to the person entitled.

These duties generally correspond to the duties laid upon an administrator in Chapter VII of the Indian Succession Act of 1925, and it is clear that until they are carried out the administration is not at an end. Now, a breach of any one of the conditions may justify the enforcement of the obligation under the bond. In practice, however, the first two conditions are rarely regarded or fulfilled. The condition to administer the estate and pay the residue to the person entitled to it, that is to the beneficiary, is, in my opinion, a vital condition. An administrator may delay the filing of an inventory or account, but if he pays to the beneficiary all that he is liable to pay, then there can be no question of enforcing the bond. Therefore, in my opinion, a breach of the condition of the bond generally takes place when the administrator converts the estate to his own use or misappropriates the same, or in other words when the estate is lost to the beneficiary; it is then that the condition of the bond is broken in its entirety, and until such a breach occurs, the obligation under the bond is not incurred. This seems to me to be the effect of the conditions and the principle on which the whole letter of administration is based. See Archbishop of Canterbury v. Robertson (1832) 1 Cr. & M. 181. Then, again, it is clear that when a bond contains successive covenants, each breach gives a separate cause of action; but the date of the last breach is the starting point of limitation in a suit on the bond, when the bond is conditioned on the performance of several acts and the obligation to pay is enforceable till the last and the most important of the conditions is not fulfilled.

31. A continuing breach would apply only to contracts obliging one of the parties to adopt some given course of action during the continuance of the contractual relations. If thin is correct, the death of the administrator would make no difference. In law the estate of an administrator would be liable to make good the loss, and if it does, then it is difficult to see how it can be said that the loss has occurred or the condition of the bond is broken so as to start limitation against the persons entitled to the estate. In Hamadanee v. Ma-Shwe Gon I.L.R. (1926) Ran. 358 it seems to have been held that time runs against a surety when the Court ascertains and declares the amount to be accounted for and lot even from the date of the alleged misappropriation.

32. Now in this case the loss occurred on January 19, 1932, when it was realized by plaintiff No. 1 that the sum of Rs. 40,000 was lost to the estate. That being so, the suit filed on January 6, 1934, would be in time even if Article 68 applied to the facts of the case. Mr. Bahadurji argues that it was admitted for the purpose of the preliminary question that the cause of action to sue on the bond arose on December 31, 1929, when the administrator died. I can find no warrant on the record to justify this statement. Assuming, however, that the cause of action arose on the death of the administrator on December 31, 1929, still as plaintiff No. 1 was then a minor, and attained majority on June 10, 1931, the suit will be saved by reason of the provisions of Section 6 of the Indian Limitation Act, and as there was no person in existence who could give a valid discharge to the administrator. The fallacy in the argument on behalf of the respondents which seems to have been accepted by the learned Judge, is, that it is the District Judge or the officers who could sue upon the bond. In my opinion, to take that view is to frustrate the intention of the legislature and to ignore the scheme of the Act. The underlying principle is that the person beneficially entitled to the estate has a right to an assignment independent of the right of the person or persons in whose name the bond is taken. Section 292 is not obligatory, and the Court may refuse to assign the band and would do so if the applicant has been guilty of unreasonable and long delay, and I see no practical difficulty in taking this view of the provisions under the Act.

33. But in my view a suit on a bond given by an administrator under Section 291 of the Indian Succession Act is not governed by Article 68 of the Indian Limitation Act. The word ' bond ' is defined in the Limitation Act as including ' any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be.' When the condition is broken, a cause of action to sue upon the bond accrues to the obligee forthwith. If the bond is assigned, the assignee has a right to enforce the bond upon a breach of the condition. Is that position possible in the case of an administration bond Is it open to the beneficiary to proceed against the administrator or sureties straightaway? Both under the Charter and under the Indian Succession Act the beneficiary has to do something before he has a right of suit. He has to apply to the Court for assignment. The Court may or may not assign. Before the Court assigns, the Court making an order has to see that (1) the application is bona fide, (2) a prima facie case is made out and (3) the applicant is a proper person. (See In the Goods of Young (1866) L.R. 1 P. & D. 186). In our Courts the practice is to take out a chamber summons on which the Court orders the officers of the Court to execute a deed of assignment in favour of the applicant upon being satisfied that the engagements of the bond were not kept. The officers then execute a deed of assignment in which the main facts relating to the passing of the bond are set out, and the order made by the Judge is recited. Is this, then, a case of a bond to which Article 68 would apply I find considerable difficulty in holding it is. The section, in my opinion, gives a statutory right to the assignee to sue as if the bond had been originally given to him and makes him a trustee of the moneys due under the bond for the persons entitled to the estate. No person entitled to the estate can sue upon the bond except under the provisions of the section. The cause of action is not merely a breach of the condition but something more, namely, obtaining in order which may or may not be given after an enquiry as to whether the obligations of the bond are not kept, and the assignee is not entitled to the moneys recovered but has to hold them as a special trustee for somebody else. The right to sue arises under the section and by virtue of the section. It is difficult to see how to such a suit Article 68 would apply. Mr. Bahadurji relies on the case of Maung San U v. Maung Kyaw Mye I.L.R. (1923) Ran. 463 and Ahmed Moola Dawood v. Fatima Bee Bee (1914) 26 Ind. Cas. 505. With all respect to the learned Judges who decided these cases, I am unable to agree. In my opinion, there is no specific article in the Indian Limitation Act which would apply to such a case, and that the only article which would apply would be Article 120; and limitation would run from the date when the right to sue accrues, that is from the time the assignment is made. Until then there is no right to sue on the assignment. This seems to be the view taken in Kanti Chandra Mukerji v. Ali-i-Nabi (1911) 1. L.R. 33 414.

34. The learned Judge took the view that Section 292 merely entitled the assignee to recover the full amount ' recoverable under the bond', and observed as follows :

Accordingly, the section itself contemplates that at the time of the assignment, there is in law an amount recoverable in respect of the breach.

With all respect the words ' recoverable under the bond ' refer to and mean nothing more than the main obligation of the administrator set out in the bond itself in these terms :.shall administer...all the rest and residue of the said Property and Credits which shall be found remaining upon the said Administrator's account, the same being first examined and allowed of by the High Court of Judicature at Bombay, etc...

that is the amount or residue not accounted for by the administrator and not paid to the persons entitled to the estate.

35. I agree, therefore, that the appeal must be allowed with costs, and the case remanded to the trial Court for trial on merits.


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