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Ram Saran Das Vs. Yudhishtar Prasad and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1931All389
AppellantRam Saran Das
RespondentYudhishtar Prasad and ors.
Excerpt:
.....the employees working in schools which are established and administered by the cantonment board. [deolali cantonment board v usha devidas dongre, 1993 mah.lj 74; 1993 lab ic 1858 overruled]. - 6. a security bond hypothecating immovable property may very well come within the definition of a mortgage as given in section 58, t......'secure a proper disposal of money due to minors, deposited with it, whether an assignment of the security bond in favour of the minors on their attaining majority in order to enable them to realize the money from the surety must be made by way of a regularly stamped and registered deed of sale or may be made by an order passed by the court.2. it appears that rs. 30,000 odd had been deposited to the credit of certain minor plaintiffs in the execution proceedings. their mother, mt. saraswati, who was their guardian ad litem in the suit, applied to the court for permission to take out the amount. security was demanded from her under order 32, rule 16, civil p. c, and on her behalf one hakim jiwan lal executed a registered security bond dated 13th november 1922, under which he made himself.....
Judgment:

Sulaiman, Ag. C.J.

1. The question referred to the Full Bench is:

Where a Court obtained a security bond which hypothecated immovable property to 'secure a proper disposal of money due to minors, deposited with it, whether an assignment of the security bond in favour of the minors on their attaining majority in order to enable them to realize the money from the surety must be made by way of a regularly stamped and registered deed of sale or may be made by an order passed by the Court.

2. It appears that Rs. 30,000 odd had been deposited to the credit of certain minor plaintiffs in the execution proceedings. Their mother, Mt. Saraswati, who was their guardian ad litem in the suit, applied to the Court for permission to take out the amount. Security was demanded from her under Order 32, Rule 16, Civil P. C, and on her behalf one Hakim Jiwan Lal executed a registered security bond dated 13th November 1922, under which he made himself liable for the whole amount and agreed that the Court would be at liberty to realize the said sum from the property hypothecated by him under the document.

3. After the attainment of majority the plaintiffs applied to the Court for permission to bring a suit against the surety because the amount had been taken out by their guardian and paid to the surety himself, who had executed a separate agreement to refund the amount. As the surety had subsequently transferred a part of the hypothecated property it was not considered sufficient to proceed against him personally under Section 145, Civil P. C, but it became necessary to enforce the charge by a regular suit. The Court granted permission to the applicants, stating that with the consent of the surety permission was granted to the applicants as prayed. A condition was however laid down that in order to give time to the surety to pay up, the suit should not be instituted before the expiry of six months, when the suit was instituted by the plaintiffs against the surety and his son, an objection was raised that the suit was not maintainable inasmuch as the bond in question had not been formally assigned to the plaintiffs. It is this question of law which has been referred to us for an answer.

4. There is no doubt that in the case of Amar Nath v. Thakur Das [1883] 5 All. 248, which has been followed in the unreported case of Sheo Baran Singh v. Munshi Singh Second Appeal No. 1642 of 1927, decided on 3rd April 1930, it was held that the right to sue for the enforcement of a contract entered into in a security bond could only be enforced after the bond had been properly assigned. That was a case in which a security bond had been taken from a guardian under the Guardians and Wards Act of 1858 (Act 40 of 1858) in which there was no provision corresponding to Section 35, Guardians and Wards Act 1890, for the assignment of such a security bond. The Bench in Amarnath's case did not lay down exactly how the assignment was to be made by the Court. It was not said in express terms that without a registered document executed by the Court no right of suit would accrue to the assignee.'

5. There is also a short passage at the end of the judgment in Sarat Chandra Roy Chowdhury v. Rajani Mohan Roy [1908]12 C.W.N. 481 to the effect that the law does not require that there should be a written assignment by the District Judge. No reasons apart from a reference to Section 35 of the Act 8 of 1890 were given.

6. A security bond hypothecating immovable property may very well come within the definition of a mortgage as given in Section 58, T. P. Act. But Section 2 (d) of that Act provides that nothing in the Act would affect any transfer by operation of law, or by, or in execution of, a decree or order of a Court of competent jurisdiction. Even if the assignment of the bond were to amount to a transfer which would ordinarily have to be effected by a registered document, there would be no such necessity if the transfer takes place by, or in execution of, a decree or order of a Court.

7. The mere fact that the money deposited to the credit of the minors was allowed to be taken out by their guardian on furnishing security, would not necessarily involve a liability on the , Court to refund the amount in case it was lost. It is therefore very difficult to hold that the assignment of the security bond by the Court to the beneficiaries would amount to a sale, as defined in Section 54, T.P.Act. The Court does not transfer it in consideration for any price paid or promised. Indeed the Court receives no consideration for it at all and if there was no initial liability on the Court to refund the amount no such liability can be said to have been discharged by the assignment. Nor can it be treated as a pure gift or a dead of exchange. It follows that there is no provision of law which requires that such assignment should be either in writing or by a registered instrument. Section 9, T. P. Act lays down that a transfer of property may be made without writing in every case in which a writing is not expressly required by law.

8. It follows that an assignment of a; security bond of this kind made by the] Court to the person entitled would not be such a transfer as can be effected only by means of a written and registered instrument. In Raj Raghubar Singh v. Jai Indra Bahadur Singh A.I.R 1919 P.C. 55, there was an order for sale without even a formal suit. The assignment is in reality by order of the Court and the provisions of the Transfer of Property Act do not apply to it.

9. It is doubtful whether when the Court instead of itself proceeding to enforce the security, assigns it to another so as to authorize him to sue upon it, there is necessarily a transfer of an interest in immovable property within the meaning of Section 17, Registration Act. But assuming that it is, that section would not be applicable to it because the assignment is really by an order of the Court, and the order is exempted from registration under Section 17 (2), (vi).

10. Provisions for the assignment of security bonds of this kind are to be found not only in Section 35, Guardians and Wards Act, but also in Section 292, Succession Act, and Sections 78 and 79, old Probate and Administration Act. The legislature obviously contemplated that a security bond may be in favour of the presiding officer of the Court itself and may be assigned by him to any person whom he considers to be a fit person or entitled to sue upon it. We also find that various forms of security bonds are given in the appendices E, F, G, and H attached to the Civil Procedure Code, and many of them are in favour of the presiding Judge himself. It is therefore difficult to believe that the legislature intended that there should in every case have to be a registered deed of transfer executed by the presiding officer and duly registered.

11. Orders passed for assignment of security bonds are as a rule passed on applications made to the Court after the Court has considered all the circumstances and made up its mind as to the conditions which it would impose in the interest of the beneficiaries. Such an order cannot be treated merely as an administrative act, but is a part of a judicial proceeding.

12. I am therefore of opinion that an assignment of security bonds standing in the name of the Court can be made by a mere order without any registered deed of transfer.

Mukerji, J.

13. The question referred to the Full Bench is as follows:

Where a Court obtained a security bond which hypothecated immovable property to secure a proper disposal of money due to minors, deposited with it, whether an assignment of the security bond in favour of the minors, on their attaining majority in order to enable them to realize the money from the surety, must be made by way of a regularly stamped and registered deed of sale or may be made by an order passed by the Court.

14. The facts, briefly, are these. To the credit of two minors a sum of Rs. 13,000 odd was deposited in the Court of the Subordinate Judge of Aligarh in Suit No. 183 of 1904. Their mother, Mt. Saraswati, was anxious to realize the money from the Court and on her application to the Court for payment of the money to her as the guardian of the minors the Court directed her to furnish security. One Hakim Jiwan Lal appeared and furnished the security bond which has been made the subject-matter of the suit of which this appeal has arisen. Hakim Jiwan Lal gave a regularly executed and registered mortgage bond in favour of the Court by which he undertook that:

the Court shall be at liberty to realize the said sum from the property hypothecated. .

15. The two minors who were parties to the suit of 1904 attained majority and then they applied to the learned Subordinate Judge in whose Court the money had been deposited, asking that the money might be realized and handed over to them or in the alternative, they might be permitted to sue the surety to recover the money. It appears that the mother, having realized the money, lent it to Hakim Jiwan Lal himself. Jiwan Lal paid only a part of the interest and not the balance of interest and the principal amount. To the suit of the plaintiffs, a son of Hakim Jiwan Lal was made party and he raised the objection in appeal that there should have been a regular deed of assignment executed and registered by the Court, namely the Subordinate Judge of Aligarh before the suit could be maintained. The question is whether this was really necessary or whether the order of the Court printed at p. 57 which runs as follows, namely:

with the consent of the surety permission is granted to the applicant as prayed

was enough?

16. We have to consider what should the nature of the document which, according to the defendant-appellant, should have been executed by the learned Subordinate Judge. The Subordinate Judge held money belonging to the minors. He was not sure that the mother would properly invest the money and therefore he required security to be furnished. Strictly speaking, it would be the duty of the Court to realize the money from the person who stood surety and to hand over the money to the plaintiffs, because ordinarily, the plaintiffs should not be put to the trouble of bringing a suit to recover the money which was their own and which was in the custody of a Court. The Subordinate Judge, in order to realize the money, could either bring a suit of his own, on the mortgaged bond, or he could direct any of his officers, say the munsarim or the nazir, to bring a suit, on his behalf, and to realize the money. The money so realized would of course be handed over to the plaintiffs. In the present case the money was deposited in course of the suit and a security bond was taken, it appears under the provisions of Order 32, Rule 6, Civil P.C. of 1882. In that case, there is no clear provision as to how the security is to be realized. In the case of a security being taken under Section 35, Guardians and Wards Act of 1890 or of security being taken under Section 292, Succession Act of 1925, there is a provision to the effect that the Court may assign the security to some person who shall be entitled to sue on the said bond. There is nothing to debar the Subordinate Judge of Aligarh from acting similarly and assigning the bond to his nazir or to a pleader of the Court (to be remunerated out of the proceeds of the suit), to sue on behalf of the Court and to realize the money.

17. Now, if this be possible, the question is: what would be the nature of the transaction by which the Court would authorize the nazir or the pleader of the Court to realize the money? Can it be held that the transaction would be one of sale or gift, within the meaning of the words used in the Transfer of Property Act? Surely, the answer would be in the negative. The 'assignment' therefore would be merely an authorization on the part of the Court to such person, as it deems fit, to collect the money, by way of suit.

18. If this be the right interpretation of the word 'assignment' which, I take it, really means transfer, then it cannot be said that, under the Transfer of Property Act the document by which the assignment is created must be a registered deed.

19. Further, the question arises whether there need be any document at all. I do not suggest that the assignment may be made orally, what I mean is, whether there need be any document purporting to be a deed of assignment, apart from a mere order of the Court, authorizing a particular person to institute a suit. In my opinion the order of the Court alone would do and no deed is called for. If the authorization (assignment) may be made by an order of the Court, it would not be required to be registered under the registration law and would, besides, be not affected by the provisions of the Transfer of Property Act itself, under Section 2, Clause (d) T. P. Act, the provisions of the Act are not to affect any transfer made by an order of a Court of competent jurisdiction. For these reasons I agree with the learned Chief Justice in answering the question in the way he proposes to answer it.


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