Satyanarayana Raju, J.
1. The following question has been referred to the full Bench :
'What is the meaning to be given to words give such security for the performance of the decree' in the Proviso to Section 17 of the Provincial Small Cause Courts Act (Act IX of 1887)?'
2. The facts which have given rise to this reference may be briefly stated. The respondent filed S. C. S. No. 365 of 1953 on the file of the District Munsifs Court, Narsapur, for recovery of a sum of Rs. 260-14-3 on foot of a promissory note. On 20th August 1953, an ex parte decree was passed in his favour. Within five days thereafter, the petitioner filed I.A. No. 1243 of 1953 for setting aside the ex parte decree.
Along with that application he filed a draft security bond offering to give his immovable property as security for the suit amount. The respondent raised objections with regard to the adequacy of the security, but on 2nd November 1953, his objections were overruled and the petitioner was called upon to file the fair bond. On 14th November 1953, the petitioner filed in court a registered security bond.
The learned District Munsiff held that as the registered security bond had not been filed within thirty days from the date on which the petitioner had knowledge of the decree, the application for setting aside the decree was barred by limitation. It is this order that is the subject-matter of revision.
3. It is contended for the petitioner that as the draft security bond was filed in time and as ft was finally accepted by the Court, be must be deemed to have furnished the security as required by Section 17 of the Act within the time prescribed.
4. Now Section 17(1) which prescribed the procedure to be followed in a Court of Small Causes, after its amendment in 1935, is in the following terms :
'(1) The procedure prescribed in the Code of Civil Procedure 1908, shall, save in so far as is otherwise provided by that Code or by this Act, be the procedure followed in a Court of Small Causes in all suits cognizable by it and in all proceedings arising out of such suits :
Provided that an applicant for an order to set aside a decree passed ex parte or for a review of judgment shall, at the time of presenting his application, either deposit in the court, the amount due from him under the decree or in pursuance of the judgment, or give such security for the performance of the decree or compliance with the judgment as the court may, on a previous application made by him in this behalf, have directed.'
Prior to this amendment, the Proviso ran thus :
'Provided that an applicant for an order to set aside a decree passed ex parte shall, at the time of presenting his application either deposit in the Court the amount due from him under the decree or give security to the satisfaction of the court for the performance of the decree, as the Court may direct.'
5. The expression 'give security to the satisfaction of the Court as the Court may direct,' gave rise to ambiguity and there was a good deal of controversy in the High Courts as to whether toe proviso was directory or mandatory. One view was that the words 'at the time of presenting his application' were incongruous with the words 'as the Court may direct,' and that therefore, they must be taken as directory and not mandatory, and if an applicant made the deposit or gave the security within the time fixed by the Court, though after the expiry of the period prescribed, the requirements of the proviso were sufficiently complied with.
A second view was that the words in the proviso were mandatory and an applicant should, at the time of making his application, deposit the decretal amount to tender the security for payment of the same. Another view was that though an application was unaccompanied by the deposit or the tender of security, still if before such application was rejected and before the time prescribed, such deposit was duly made, the application might be regarded as satisfying the requirements of law.
This conflict of views was sought to be set at rest by the Legislature by enacting the amendment in 1935. The terms of the proviso to Section 17(1) are now mandatory, and it is incumbent on a party seeking to have an ex parte decree set aside either to deposit the decretal amount at the time of presenting the application or to furnish security as directed by the Court on a previous application made for that purpose.
6. Under Article 164 of the Limitation Act, a period of thirty days is allowed for an application to set aside a decree passed ex parte. This period is reckoned from the date of the decree or, where the summons is not duly served, when the applicant has knowledge of the decree. That being GO, the question is whether the filing of a draft security bond, along with an application to set aside an ex parte decree, within the period prescribed by Article 164 of the Limitation Act, is a sufficient compliance with the terms of the proviso.
(7) Three possible situations may be envisaged:
(1) where the draft security bond filed by the applicant is tested and found acceptable and the fair bond is actually filed within the prescribed time;
(2) where the draft bond is filed in time but is found unacceptable after the time prescribed; and
(3) where the draft bond is filed in time but Is ultimately accepted by the court after the time prescribed,
8. The cases falling under the first and the second categories present no difficulty. In the cases falling under the first category the requirements of the proviso are complied with. Equally in the second category of cases, there is no compliance with those requirements. It is really the third category of cases that we are now concerned with and in respect of which there is a divergence of judicial opinion.
9. We shall briefly notice the cases of the Madras High Court which have considered this question.
10. In Assan Mohamed Sahib v. Rahim Sahib, ILR 43 Mad 579 : (AIR 1920 Mad 562) (FB), a Full Bench of the Madras High Court has held that the provisions of Section 17(1) of the Act are mandatory but are sufficiently complied with by satisfying the requirements of the section before the time prescribed for such applications in the Limitation Act, has elapsed.
11. In Balakrishna Ayyar v. V. Pichamuthu Piliai, 15 Mad LW 186 : (AIR 1922 Mad 330), the facts were as follows ; A small cause suit was decreed ex parte on 26th January 1920, and the application to set it aside was made on the 27th without the necessary deposit or security as required by the proviso to Section 17, but on 6th February 1920, the defendant filed a draft security bond which was tested and found acceptable on 9th March 1920, and the actual bond was executed on 1st April 1920.
The learned Subordinate Judge held that the mere filing of the draft bond was not a sufficient compliance with the requirements of the proviso and refused to set aside the decree. The report sets out the judgment of the Subordinate Judge, but the actual judgment of Mr. Justice Ramesam was this :
'Following ILR 43 Mad 579 : (AIR 1920 Mad 562) (FB), see also Tarapada Chose v. Jagat Mohini Dasi, 42 Ind Cas 751: (AIR 1917 Cal 195), I hold that the Subordinate Judge is right. The petition is dismissed with costs.'' It is necessary to note this fact because in all the later decisions of the Madras High Court, the judgment of the Subordinate Judge was read as the Judgment of the High Court.
12. In Chathiyelan Kanna Kurup v. Raman Nayar, 1942-2 Mad LJ 425 : (AIR 1943 Mad 51), the facts were these : An application was made on 7th April 1941 for setting aside an ex parte decree, which was four days after the ex parte decree had been passed. The application was not accompanied by the deposit of the decree amount nor by the offer of any security. On 9th April, there was a further affidavit in which certain property was offered as security to the Court in connection with the application to set aside the ex parte decree.
The Court ordered notice to the decree-holder and also ordered the property offered as security to be tested. The result of the test was that the property was found to be sufficient and a report to this effect was received early in July. On 21st July, the learned District Munsif rejected the application of the petitioner on the ground that he had not complied with the provisions of Section 17. King J. has held that Section 17 requires a previous application if the applicant is to be permitted to give security instead of depositing cash and admittedly no such previous application was filed.
The learned Judge noticed two earlier decisions of the Madras High Court, one of Jackson, J. and the order of Happell, J., who construed the expression 'furnish security' as equivalent to 'render security'. While observing that there might be much to be said for that point of view, the learned Judge felt that he ought to follow the authority of 15 Mad LW 186: (AIR 1922 Mad 330) which directly dealt with Section 17 rather than the other cases which dealt only with cognate provisions of law.
13. About a year later the same question arose for consideration by a Division Bench of the Madras High Court, consisting of Leach C. J. and Shahabuddin, J. in Penchalu Setty v. Subbareddy, 1943-2 Mad LJ 671: (AIR 1943 Mad 520). The learned Judges observed that they were in full agreement with the interpretation placed upon Section 17 by Ha-mesam, J. During the course of the judgment they stated:
'The respondent relied on the decisions of this Court in 15 Mad LW 186: (AIR 1922 Mad 330) and 1942-2 Mad LJ 425: (AIR 1943 Mad 51). In the former of these cases, Ramesam, J., held that the mere filing of a draft bond was not sufficient compliance with the provisions of Section 17 of the Provincial Small Cause Courts Act. He pointed out that the draft security bond was a mere piece of paper and it could not have the effect of a security bond duly executed and registered which alone could be enforced.'
As already noted, the observations attributed to Ramesam J., were really those of the Subordinate Judge. That may not, however, affect the position.
14. A later Bench decision of the Madras High Court in Marimuthu Goundar v. Ponnammal, AIR 1956 Mad 422, however, showed preference for a more liberal construction of the proviso. After referring to the earlier decisions, the learned Judges observed :
'We consider that these decisions place too narrow a construction upon the security that is required under Section 17, Provincial Small Cause Courts Act......In my opinion the criterion is this : 'Was the security which the party placed in the hands of the Court and which the Court ultimately accepted sufficient to enforce the obligation upon him?' Judged by this test an unregistered security bond is, in my opinion, sufficient compliance with the law, provided that the delay in getting it registered is not due to any fault of the applicant himself.'
In taking this view, the learned Judges accepted with approval the reasoning in the decision of a Division Bench of the Patna High Court in Rajeshwari v. Brahmanand Lal, AIR 1933 Pat 279, where the terms of the proviso received a liberal construction.
15. The question then is : Whether the filing in time of the draft bond, which was accepted by the Court after scrutiny after the period prescribed, would be a sufficient compliance with the provisions of Section 17. They would depend upon the meaning to be given to the words 'give such security for the performance of the decree' occurring in the proviso. Do these words mean that the security itself must be furnished, or would it be sufficient compliance if the tender of the security is made within the time prescribed?
16. The procedure ordinarily followed in Courts in this State with regard to the furnishing of security bonds may be referred to here. The applicant files a draft security bond. Notice is then given by the Court to the opposite party for filing his objections, if any. If no objections are filed, the Court requires the applicant to file the fair bond. But where the opposite party raises objections to the sufficiency of the security or otherwise, the Court deputes an officer to test the security and after the report of that officer is received, the opposite party files his objections.
They are then enquired into by the Court and eventually the Court either rejects the security as being insufficient or accepts it as sufficient. In the former case, clearly there is nothing further to be done as the Court rejects the security bond. But where, after the objections are heard and decided, the Court accepts the security bond, the party is required to file the bond. All this necessarily takes time.
Very often due to the exigencies of work in Court, it may not be possible for the presiding officer to dispose of the application expeditiously within the time prescribed. It is not difficult to envisage cases where, for no fault of the applicant, the eventual order passed by the Court accepting the security bond is beyond the prescribed period. Should the party be penalised for the delays occurring in the Court?
17. An unregistered security bond is sufficient compliance with the law, provided the delay in getting it registered is not due to any fault of the applicant himself. The test is whether the security which the party placed in the hands of the Court and which the Court ultimately accepted was sufficient to enforce the obligation upon him. Therefore, the filing in time of the draft bond, if accepted by the Court after scrutiny, would be a sufficient compliance with the requirements of the proviso.
18. As a result of the above discussion, we would answer the question referred to the Full Bench, as follows : Where security is tendered within the time and proves, even though tested after the time, eventually to be sufficient, the applicant must be deemed to have complied with the requirements of the proviso. The words 'give such security' may be construed to mean 'tender such security'.