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Channappa Basappa UppIn Vs. Yellappa Venkappa Anegundi - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberSecond Appeal No. 256 of 1929
Judge
Reported in(1931)33BOMLR820
AppellantChannappa Basappa Uppin
RespondentYellappa Venkappa Anegundi
DispositionAppeal allowed
Excerpt:
.....145-provincial insolvency act (v of 1920), section 13-execution of decree-arrest of judgment-debtor-surety guaranteeing that judgment-debtor will apply for insolvency within certain time-application for insolvency filed in time-dismissal of application as not according to law-re-arrest of judgment-debtor-liability of surety. ;in execution of a money decree passed against him, the judgment-debtor was arrested, but on his undertaking to apply to be declared an insolvent within fifteen days he was released; and a surety was furnished who engaged that the judgment-debtor would apply within the time specified and that he would appear when called upon. the judgment-debtor applied within time, but the application was dismissed for want of particulars required by section 13 of the..........he argued that it is not necessary that the court should actually have committed the judgment-debtor to prison, but it is sufficient if the debtor has been brought before the court under arrest so that the court can commit him if it choses so to do. there are, however, other passages in the judgment which appear tome to be inconsistent with that argument. thus at p. 502' the learned judge says:-obviously if the surety is proceeded against and the amount is recovered from him under the conditions of the bond, then the judgment-debtor cannot be committed to jail in execution, and also if the judgment-debtor is committed to the civil prison, the state of affairs is just the same as if the surety had never come forward, so that the court cannot concurrently proceed against the surety.4......
Judgment:

Broomfield, J.

1. Respondent No. 1 Yellappa obtained a money decree against respondent No 2 Fakirappa in June 1926. In execution of this decree Fakirappa was arrested on February 7, 1927. He expressed his intention to apply to be declared an insolvent and the appellant Channappa stood surety for him and executed a security bond in accordance with the terms of Section 55, Clause (4), of the Civil Procedure Code, engaging that the judgment-debtor would apply to be declared an insolvent within fifteen days and that he would appear when called upon in any proceedings upon the application or upon the decree under execution. Within fifteen days, that is to say on February 21, 1927, Fakirappa did make an application, but it appears that it did not contain all the particulars required by Section 13 of the Provincial Insolvency Act, and it was ultimately rejected on that ground on July 23, 1927. The order passed on that occasion was, 'Mr. Pirzade for the applicant admits that this application is not in the proper form and states that he will put in another application in insolvency. So reject this application. Arrest the debtor for the present.' The judgment-debtor was accordingly re-arrested, but was again released on furnishing security. The judgment-creditor then, on July 27, presented an application under Section 145 of the Civil Procedure Code for realization of the security. Channappa opposed the application on two grounds, viz., that the judgment-debtor had made an application under the Provincial Insolvency Act as he had undertaken to do, and that as the judgment-debtor had been arrested after his insolvency application was dismissed, the liability of the Surety thereby came to an end. On both these points the lower Courts have decided against the surety, who has come to this Court in second appeal.

2. The same two points arise for decision here. On the first point the view taken by the lower Courts is that as the application made by Fakirappa to be declared an insolvent was not an application in accordance with law there had been no sufficient compliance with the terms of the surety bond. The learned District Judge has referred to a case on this point, but it is not reported in any authorised report and is not available here. We do not know what the facts of that case were nor even the Court which decided it. No other authority has been cited. I am not prepared to hold that the application referred to in Clause (4) of Section 55 for being declared an insolvent must necessarily be an application which contains all the particulars required by Section 13 of the Provincial Insolvency Act. When the Legislature has intended that are application which has to be made within a certain time must (sic) be one in accordance with law, it has been so stated as for instance in article 182, column 3, Clause (5), of the India Limitation Act. I can see no good reason for implying those Words or similar words here. The position might be different, no doubt, if the application was so defective as to make it appear that the application was not a bona fide one. In that case it might be argued that there was no substantial compliance with the terms of the bond. It is not shown, however, that that was the position in the present case. For some reason the Court took until July 23, 1927, to discover that the application was not in the proper form. It then rejecteed the application as above stated, and on August 3, 1927, Fakirappa made a fresh application which was pending at the time of the proceedings with which we are concerned. As the result of the insolvency proceedings Fakirappa was ultimately adjudicated insolvent. I hold, therefore, that the application which was made on February 21, 1927, may fairly be regarded as the first step towards getting the adjudication order. The insolvency proceedings are not before me, but on the face of it one does not see why it was necessary to dismiss the application at all. It would seem that the applicant might have been called upon to supply the particulars which were missing from his application. It can hardly be denied that the fulfilment of the purpose for which the guarantee was given must have the effect of discharging the surety, and I think it may be said that in this case the purpose was substantially fulfilled. An application to be declared insolvent was made within the time fixed, and it has not been shown that there was any failure on Fakirappa's part to appear when called upon. On this point, therefore, I find that the decision of the lower Courts is wrong.

3. For the proposition that the judgment-creditor was not entitled to proceed against the surety after the re-arrest of the judgment-debtor, Mr. Desai cited Makanji Mavji v. Bhukandas Nagardas (1924) I.L.R. 48 Bom. 500, 26 Bom. L.R. 415. It was held there that Clause (4) of Section 55 of the Code does not mean that the Court may proceed both against the surety and against . the debtor. For that proposition authority was hardly necessary since the language of the clause itself suggests that the judgment-creditor is given alternative and not concurrent remedies against the debtor and the surety. I do not think, however, that this case decides that the judgment-creditor cannot proceed against the surety when once the judgment-debtor has been arrested. The words of Clause (4) are 'the Court may either direct the security to be realized or commit him (that is the judgment-debtor) to civil prison in execution of the decree.' Mr. Desai really relied upon one sentence in the judgment of Macleod C.J. at p. 503: 'It is only when the judgment-debtor has been brought back before the Court, so that the Court can commit him to the civil prison, that the surety is released.' On the strength of these words he argued that it is not necessary that the Court should actually have committed the judgment-debtor to prison, but it is sufficient if the debtor has been brought before the Court under arrest so that the Court can commit him if it choses so to do. There are, however, other passages in the judgment which appear tome to be inconsistent with that argument. Thus at p. 502' the learned Judge says:-

Obviously if the surety is proceeded against and the amount is recovered from him under the conditions of the bond, then the judgment-debtor cannot be committed to jail in execution, and also if the judgment-debtor is committed to the civil prison, the state of affairs is just the same as if the surety had never come forward, so that the Court cannot concurrently proceed against the surety.

4. And again:-

Clearly if that warrant had been executed and the judgment debtor had been committed to the civil prison, then with regard to that condition in the bond, the surety would have been released. But it is contended that the issue of the warrant is not sufficient by itself to bar the Court from proceeding against the surety, if the warrant is unfruitful, and that seems to me to be the right construction of the section.

5. It does not appear to me, therefore, that the learned Judge intended to lay down that the arrest of a judgment-debtor was in any respect equivalent to his committal to prison, and the actual decision in that case was that in spite of the fact that the judgment-debtor had been arrested the liability of the surety remained. I agree with the lower Courts that the arrest of the judgment-debtor did not have the effect of discharging the surety.

6. But, as I have found in the appellant's favour on the first point, the result is that the appeal succeeds, the orders of the lower Courts must be set aside and the application dismissed with costs throughout.


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