Skip to content


Pena Babulal and ors. Vs. Hyderabad Municipal Corporation Through Commissioner, Municipal Corporation - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.O. No. 53/2 of 1956
Judge
Reported inAIR1961AP413
ActsCode of Civil Procedure (CPC) , 1908 - Sections 145
AppellantPena Babulal and ors.
RespondentHyderabad Municipal Corporation Through Commissioner, Municipal Corporation
Appellant AdvocateMohd. Abdul Wahid Ovesi, Adv.
Respondent AdvocateMohd. Jalil Ahmed, Adv. for ;Satguru Preshad, Adv.
DispositionAppeal dismissed
Excerpt:
.....execution of money decree - section 145 of code of civil procedure, 1908 - appellant executed two surety bonds - default made in payment - respondent started execution proceeding and obtained money decree - prayed its execution under section 145 before lower court - issued direction for attachment of property - appeal filed - observed under section 145 proceedings can be initiated if surety made himself personally liable as well as created charge on property - charge cannot be enforced under section 145 - appellant created both rights - respondent prayed for attachment and sale of property - held, property can be attached for execution of decree. - - 1951-3-0 in the court and in case i fail to do so the said amount of rs. the bond clearly mentions that in default the court may..........started by the respondent herein. it appears that the appellant stood surety and executed two surety bonds, one in the mouth of august 1952 and the second on 7th october, 1952 and as default was made, the respondent tried to execute the decree. in the e. p. filed, the respondent prayed that the surety be directed to deposit the amount and in case of default, house d-a-66, at bir bhan bagh, shah inayath gunj, hyderabad may be attached and auctioned and the said amount may be awarded. the appellant resisted this petition. though no counter was filed on his behalf, 011 10-10-1955 011 10-10-1955 , his learned counsel stated before court that his only objection was that as immoveable property was mortgaged and no personal liability was undertaken under the surely bonds, the decree-holder.....
Judgment:

Manohar Pershad, J.

1. Appeal 53/2 of 1956 is on behalf of the judgment-debtor. It arises out of execution proceedings started by the respondent herein. It appears that the appellant stood surety and executed two surety bonds, one in the mouth of August 1952 and the second on 7th October, 1952 and as default was made, the respondent tried to execute the decree. In the E. P. filed, the respondent prayed that the surety be directed to deposit the amount and in case of default, House D-A-66, at Bir Bhan Bagh, Shah Inayath Gunj, Hyderabad may be attached and auctioned and the said amount may be awarded.

The appellant resisted this petition. Though no counter was filed on his behalf, 011 10-10-1955 011 10-10-1955 , his learned counsel stated before court that his only objection was that as immoveable property was mortgaged and no personal liability was undertaken under the surely bonds, the decree-holder could not proceed against the hypothecated property in execution proceedings and he had to file a fresh suit.

The executing court repelled the contention of the judgment-debtor and held that under Section 145 C. P. C. the decree-holder was entitled to proceed against the property. Holding so, the lower court directed the issue of warrant of attachment of the property specified in the E. P. It is this order of the executing court that is now challenged in this appeal.

2. Sri Abdul Wahid Ovesi, learned counsel for the appellant contended that in the first bond of August, 1952, there is only personal liability and this bond not having been accepted by the Court and there being no personal liability in the second bond of 7th October 1952, the decree-holder was not competent to proceed under Section 145 C. P. C. and his only action was against the property mortgaged and that too by way of suit. He next contended that even if it is held that by the second bond the appellant had undertaken the personal liability that would only entitle the decree-holder to execute the decree by detention of the judgment-debtor in civil prison and not by way of attachment of the property.

3. In order to appreciate the contention of the learned counsel a reference first to the surety bonds is necessary. The surety bond of August 1952 is worded thus;

'As an order has been passed in the above said case against the plaintiffs, Md. Hashin and others, to furnish the security bond, therefore, I, Pena Babulal son of Pandeji, caste Maratha, aged 40 years, profession Business, resident of Shah Inayat Gunj, house No. D-A.-66, Bir Bhan Bagh, stand surety for the plaintiffs Md. Hashin and others and agree that, if the appeal, for interim injunction filed in the High Court by the plaintiffs, is disallowed after hearing the appeal, and that if Md. Hashin and others the plaintiffs would not deposit the sum of (O. S.) Rs. 1951-3-0 (Rupees one thousand nine hundered and fifty one and annas three) as per the orders of the court, and if the court directs me to deposit the sum of Rs. 1951-3-0 I will deposit the sum of Rs. 1951-3-0 in the Court and in case I fail to do so the said amount of Rs. 1951-3-0 can be recovered from me personally and from my property'.

The second bond reads thus:-

'I, Pena Babulal son of Pandeju, Caste Maratha, aged 40 years, occupation business, resident of Shah Inayat Gunj, Beer Ban Bagh, House No. D-A-66, previously stood as personal surety in the above said case, but was not accepted by the Hon'ble Court. The Court ordered for the production of security. In obedience to the order of the Court, I, on behalf of the plaintiffs namely, Md. Hashmin and others, stood as surety and agree that if the appeal for interim injunction filed in the High Court by the plaintiffs is disallowed and that if Md. Hash-min and others, as per the orders of the Court, does not deposit the sum of Rs. 1951-3-0 in the Court, I, in obedience to the order of the Court will deposit the sum of Rs. 1951-3-0 in the Court. In case of default, the Court can recover it from me personally and from my properly House No. D-A.66, situate at Beer Bhan Bagh, Shah Inayat Gunj and situate within the following boundaries, worth Rs. 11,000/-. The house mortgaged is in my possession and enjoyment. Therefore, this security bond (in respect of the house mortgaged) has been filed as per the orders of the Court'.

4. From a reading of the above two bonds, it would appear that in the first bond the surety had only made himself personally liable, and by the second bond he has not only made himself personally liable, but has created a charge on a specified property. The contention of the learned counsel for the appellant is that the first bond is no longer in existence and it has been cancelled. Though the learned counsel for the respondent was not in a position to say whether the first bond was actually cancelled, yet when his attention was drawn to the recital in the second bond wherein it is stated that the Court had rejected the first bond, he very rightly conceded before us that in view of the recital the first bond would be deemed to have been cancelled.

5. Now, we have to see from a reading of this second bond, whether the surety has taken any personal liability or not. From a plain reading of the document, it would appear that the surety has taken the personal liability. We may in this connection refer to the following words appearing in the bond:

'In case of default, the Court can recover it from me personally and from my property House No. D-A.66 situate at Beer Bhan Bagh, Shah Inayat Gunj'.

The contention of the learned counsel for the appellant is that the word 'personally' only indicates that in default the court may execute the order by detention of the judgment-debtor in the civil prison and not by attachment of his personal property. This argument is devoid of force. The bond clearly mentions that in default the Court may recover the amount from him personally. The mode of execution of such decrees is provided in Rule 30 of Order 21 C. P. C. and it runs thus:

'Every decree for the payment of money, including a decree for the payment of money as the alternative to some other relief, may be executed by the detention in the civil prison of the judgment debtor or by the attachment and sale of his property or by both'.

In other words, the mode of execution provided under the above provision is either detention in the civil prison of the judgment debtor or by the attachment and sale of his property, or both. It is not denied that the surety bond docs say that the surety is personally liable. What is urged is that the scope is only limited to the detention of the judgment-debtor in civil prison and not to the attachment of the other property.

In view of the above provision, this argument cannot be accepted. This contention therefore fails. the cases cited by the learned counsel viz. C.V. Eaman v. K.T. Randan, AIR 1934 Mad 262, Kesarchand v. Uttamchand, AIR 1945 PC 91; Jayappa v. Shivangouda, MR 1928 Bom 42 and Amir v. Mahadeo Persad, AIR 1917 All 104 are all cases where there was no personal liability at all. When there is no personal liability undertaken by the surety, the question of attachment of the other property does not arise. We therefore do not wish to go into a detailed discussion of these authorities.

6. We find sufficient force in the other contention advanced by the learned counsel for the appellant, namely that the respondent cannot enforce the charge specified in the security bond in execution as Section 145 C. P. C. would not be applicable. To appreciate the argument, a reference to Section 145 C. P. C. is necessary, which runs thus:

'Where any person has become liable as surety:

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

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

(c) for the payment of any money, or 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 purpose of appeal, be deemed a party within the meaning of Section 47: Provided that such notice as the court in each case thinks sufficient has been given to the surety'.

The object of this section is to provide a summary remedy for the enforcement of the liability of the surety who has given security for any of the purposes enumerated in the section. But for this section, the party for whose benefit the security has been given would have to file a separate suit to enforce the security. This section dispenses with the necessity of a suit and enables him to enforce the security by execution proceedings in the same manner as it the surety was a party to the decree or order in respect of which security has been given. But the procedure provided by the section applies only to the extent to which the surety has rendered himself personally liable. It follows therefore that whenever a surety makes himself personally liable and in addition charges his property, it is only the personal liability that can be enforced under Section 145 C. P. C. Identical question bad arisen in Balakrishna v. Krishnamurthy, AIR 1927 Mad 410. In that case, the surety bond provided:

'I have agreed to pay on behalf of the first defendant a sum to the extent of Rs. 2800/- with interest at 6 per cent, per annum for and towards the amount to be so decreed and have furnished the undermentioned property as security. Myself and my representatives are hereby bound to pay the aforesaid amount on the liability of the said property'.

It was field that the contents of the bond comprised a personal covenant to pay as well as an agreement to hold liable the property given as security and the decree-holder could proceed in execution against the surety under Section 145, to the extent of his liability as if he were a judgment-debtor. It was held further that the hypothecated property could be sold in execution of the decree to satisfy the charge created on it.

In the Bombay High Court in Gurushantappa. v. Gurava, Am 1926 Bom 279 Macleod, C.J. and Coyajee, J. have also considered the scope of Section 145 C. P. C. and held that where under a bond or suretyship, the surety of a judgment-debtor mortgages, his property as security for his liability, on default by the judgment-debtor to pay, the decree holder can enforce the security against the property under Section 145, without following the procedure provided for by Order 34, Rule 14.

In that case, two decisions of the Allahabad High Court, viz. Mukta Prasad v. Mahadeo Prasad, ILR 38 All 327 : (AIR 1916 All 57) and ILR 39 All 225: (AIR 1917 All 104) came up for consideration. In the former case, it was held that default having been made by the judgment-debtor, the decree holder was at liberty to enforce the security in the manner provided for by Section 145 of the Code of Civil Procedure and that Order 34, Rule 14 was no bar to his enforcing it against the hypothecated property as well as any other property of the surety. Mr. Justice Piggott said at p. 332 (of ILR All) : fat p. 59 of AIR):

'It may be that the decree-holder would have been entitled to bring a separate suit for the enforcement of the hypothecation contained in the security bond and would have been in a stronger position if he had done so. I do not decide this point one way or the other. It seems to me, however, that the liability which it is sought to enforce by the present application for execution is a personal' liability and nothing else. There is, I repeat, no decree in existence for the sale of this property,and it can only be attached and brought to sale, under the terms of the simple money decree now under execution, by reason of the liability incurred by the surety and under the provisions of Section 145 of the Code of Civil Procedure. I call this enforcing the surety's liability to the extent to which he has rendered himself personally liable and to no greater extent. It seems to me, therefore, that there is no force in the suggestion that there has been any material change in the taw with regard to the particular point in controversy between the Allahabad and the Calcutta High Courts. The question is whether the provisions of Order 34, Rule 14 prevent these particular properties from being taken in execution at all. To this question my answer would be that the said rule only applies when the mortgagee has obtained a decree for payment of money in satisfaction of a claim arising under the mortgage. In the present case the appellant has not obtained a decree against Mahadeo Prasad at all. He has obtained a decree against other persons, and Mahadeo Prasad has become liable to have his property seized in satisfaction of the decree by reason of a special covenant entered into by him which covenant under the provisions of Section 145 C. P. C. can be enforced in the execution department without any decree being obtained against Mahadeo Prasad at all. It therefore seems to me that the provisionsof Order 34, Rule 14 have no application and cannot be put forward as a bar to the present proceedings'.

We find ourselves in entire agreement with the view expressed by Justice Piggott in the above case. In the instant case also, we may point out that the respondent is not trying to enforce the charge created on the house D-A-66. What he is trying to enforce now is the personal liability undertaken by the surety. He has asked the Court to direct the judgment-debtor to deposit the amount and in case he fails to do so, to attach the property and auction the same and give the decretal amount to the decree-holder. In other words, he is trying to enforce the personal liability of the surety. When this is the case, Section 145 C. P. C. would be applicable. But if the respondent had tried to enforce the charge created on the property, then it can rightly be said that Section 145 C. P. C. would not apply and his only remedy was by way of suit.

7. In ILR 39 All 225: (AIR 1917 All 104) the surety besides making himself personally liable for the amount of the decree in question, by way of further security hypothecated certain property, but before the decree-holder sought to execute his decree, the surety had sold his equity of redemption. The purchasers of the equity of redemption objected to the sale of the property by the decree-holder on the ground that they were purchasers of all the interests of the surety and it was held that the fact that the surety had sold his equity of redemption made it impossible for the decree-holder to execute against the property without filing a suit to obtain an enforcement of the hypothecation of the property in the surety bond.

8. Mr. Mulla while dealing with Section 145 C. P. C. in his notes at p. 318 (7th Edn.) says:

'The point is that where a surety, besides giving his personal undertaking mortgages his property for the due performance of the decree, the decree-holder is not entitled to bring the property to sale under this section as mortgaged property. There is nothing, however, to preclude the decree-holder from giving up the mortgage and attaching and selling the property under this section as if it was not mortgaged at all'.

Chitaley and Annaji Rao, while dealing with the scope of Section 145 says at page 1752 (6th Edn.) that where the surety makes himself personally liable and in addition charges his property, it is only the personal liability that can be enforced under this section and that the decree-holder may give up the mortgage and enforce the personal liability of the surety by attachment and sale of the property charged. The Calcutta High Court, in Chandrabati v. Babu Ram, AIR 1915 Cal 533 while considering Section 145 C. P. C. held that the surety bond also created a personal liability and the decree holder could realise the amount of costs covered by the security bond from the person and other properties of the surety under Section 145 C. P. C.

9. Thus, it is clear from the above discussion that if the decree-holder is trying to enforce the charge created, he could not do so under Section 145 C. P. C. and his only remedy would be by way of suit; but if the decree-holder is not enforcing that charge, but is trying to enforce the personal liability given by the surely, Section 145 would be applicable and he would be entitled to execute the decree to that extent.

The contention of the learned counsel for the appellant is that in the instant case the decree-holder (respondent) has not given up the charge and unless he specifically gives up, he would not be entitled to enforce the personal liability by attacliment and sale of the property. It is no doubt true that in clear words the respondent-decree-holder has not stated so, but when in the E. P. he has not claimed for the sale of the mortgage property and his prayer is that the property specified therein should be attached and sold, that is clear indication that he is giving up his security and trying to enforce the personal liability by attachment and sale of the property. There is no bar for this.

10. Yet another argument was advanced by the learned counsel for the appellant that inasmuch as in the surety bond the appellant had limited his liability to the extent of the specified house, the respondent was not entitled to enforce the personal liability. This argument is without any Substance. As discussed above, the appellant has not only in clear words accepted the personal liability but has also created a charge on the properly. The words 'Jaidad' (in urdu) and 'Zath' (in urdu) used clearly indicate that he has taken personal liability along with the property, as specified property and created a charge on the house.

11. We therefore do not see any merits in this appeal'. It is dismissed with costs throughout.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //