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Kiran Koomar Banerji Vs. Baij Nath - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1928All607
AppellantKiran Koomar Banerji
RespondentBaij Nath
Excerpt:
.....the application might very well be treated as having been validly made on the date when the security was deposited. in such a case after the deposit of the security the application may well be entertained by the court: no lien or bar is created over the amount which would be paramount as against other creditors who may like to attach the amount. had the court rejected the security there and then, it would have been possible for the applicant to make it good in cash. the acceptance undoubtedly misled the applicant, and he was by virtue of that acceptance deprived of an opportunity to make good the amount before the limitation expired. i, therefore, think that in this case it cannot be said that the applicant failed to furnish the security 'to the satisfaction of the court. really..........an ex-parte decree. the decree was passed on 9th january 1928 and it was put in execution and a fixed deposit belonging to the applicant lying in a bank was attached. notice was seat to the bank and to the applicant who thereupon filed an application in the court on 5th march 1928 that he for the first time came to know of the suit on 28th february 1928. in his application he stated that his fixed deposit which had been attached under an order of the court should be taken as security required by section 17, provincial small cause courts act. on 14th march 1926 the applicant deposited the fixed deposit receipt in court, but he omitted to file any security bond hypothecating its amount. in its order of the 14th march 1928 the court accepted the attached amount as sufficient security......
Judgment:

Sulaiman, Ag. C.J.

1. This is an application in revision from an order dismissing an application for setting aside an ex-parte decree. The decree was passed on 9th January 1928 and it was put in execution and a fixed deposit belonging to the applicant lying in a bank was attached. Notice was seat to the bank and to the applicant who thereupon filed an application in the Court on 5th March 1928 that he for the first time came to know of the suit on 28th February 1928. In his application he stated that his fixed deposit which had been attached under an order of the Court should be taken as security required by Section 17, Provincial Small Cause Courts Act. On 14th March 1926 the applicant deposited the fixed deposit receipt in Court, but he omitted to file any security bond hypothecating its amount. In its order of the 14th March 1928 the Court accepted the attached amount as sufficient security. The order, however, was behind the back of the decree-holder. It is to be noted that when the Court accepted the amount as sufficient security 30 days from the date alleged to be the date on which the applicant first had knowledge had not expired. Ultimately when objection was raised by the decree-holder the Court held that no sufficient security within the meaning of Section 17 had been deposited along with the application. The application was accordingly dismissed.

2. No doubt the view which has prevailed in this Court is that the provisions of Section 17 are imperative and the requirement to deposit security at the time of presenting the application is mandatory: Jagannath v. Chet Ram [1906] 28 All. 470. If, however, the security is deposited before limitation has expired the application might very well be treated as having been validly made on the date when the security was deposited. In such a case after the deposit of the security the application may well be entertained by the Court: Jeun Muchi v. Budhi Ram, [1905] 32 Cal. 339. In the present case however no sufficient security was as a matter of fact deposited within the time though the fixed deposit receipt tendered by the applicant was accepted by the Court as a sufficient security. In my opinion it is not sufficient for an applicant to state that money which stands Attached should be treated as security. For such an attached amount he has not really furnished any sufficient security for the decree-holder. No lien or bar is created over the amount which would be paramount as against other creditors who may like to attach the amount. Such an attached amount would always be liable to be seized upon by other creditors, claiming rateable distribution, the result being that the security is liable to dwindle if such other claimants come forward. Similarly, a mere deposit of the fixed deposit receipt, which is not transferable, did not amount to an adequate security furnished by the applicant. The Court could not have realized the amount of the fixed deposit receipt without the consent of the applicant. The applicant did not, therefore, place the amount at the full disposal of the Court as the case would have been if cash had been deposited. I, therefore, agree with the Court below that sufficient security was not as a matter of fact deposited within limitation.

3. At the same time I cannot ignore the circumstance that the Court had as a matter of fact accepted as sufficient security the fixed deposit receipt coupled with the applicant's statement that the attached money should be treated as such. On that date the time, according to the allegation in the application had not expired. Had the Court rejected the security there and then, it would have been possible for the applicant to make it good in cash. The acceptance undoubtedly misled the applicant, and he was by virtue of that acceptance deprived of an opportunity to make good the amount before the limitation expired. I, therefore, think that in this case it cannot be said that the applicant failed to furnish the security 'to the satisfaction of the Court.' The security was: really insufficient, but the Court was satisfied that it was adequate.

4. In the case of Azmutullah Khan v. Ahmad Ali : AIR1925All379 , a mistake had been made by the applicant as regards the amount for which he was to furnish security. The amount for which the property covered by the security bond was hypothecated was slightly less than the amount of the decree though the property hypothecated was worth more. Stuart, J., thought that a mistake of that kind was not fatal, when the applicant did in fact deposit full, amount in cash later. In the present, case if the Court had rejected the security on the ground that it was no security at all the applicant might very well have deposited the amount in cash. It will be injustice to allow the applicant to suffer on account of an error committed by the Court. On condition of the applicant depositing fresh security for the full amount of the decree within 80. days from this date I would, in the special circumstances of the case, allow this revision, and setting aside the order of the Court below restore the application and direct that it may be disposed of according to law. The parties will bear their own costs. If fresh security is not deposited within the time allowed the order of the Court below will stand, and the respondent will get the costs of this revision.


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