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Ghulam Dastgir Vs. Mohammad AmIn (Suerty, Objector) and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1937All682
AppellantGhulam Dastgir
RespondentMohammad AmIn (Suerty, Objector) and anr.
Excerpt:
.....promise in this ease was the withdrawal by the plaintiff of the attachment before judgment but mohammad amin's liability must depend upon the precise nature of his promise. if upon a true construction of this bond he merely promised to stand security in the event of a decree being obtained in the court of first instance, then clearly he is not liable in the event of the suit being dismissed by the court of first instance. in case i fail to deposit the said amount in this court, the court aforesaid shall have power to realise in any way it likes rs. if she failed to do so, i or my lawful heirs or executors will produce rs. it would be strange indeed, if the language of the instrument bad been such as to create a kind of wagering contract of this nature; in such a case, it might well..........the property moveable and immoveable.3. in my judgment upon a true construction of this security bond mohammad amin undertook to satisfy to the extent of rs. 710 any decree which might be passed against mohammad yunis the judgment-debtor. there is nothing, in my view, to suggest that he only undertook to satisfy wholly or in part a decree which might be passed by the court of first instance. the words 'in case a decree is passed against the defendant' are wide enough to cover the case of a decree passed on appeal in an appellate court. the fact that the consideration for this promise was the withdrawal of the attachment before judgment does not in my view necessarily limit mohammad amin's undertaking to satisfying any decree which might be passed by the court of first instance only. in.....
Judgment:

Harries, J.

1. This is a decree, holder's second appeal against a decree of the lower Appellate Court confirming a decision of the Court of first instance allowing the objection of Mohammad Amin, one of the present respondents. The facts of the case can be shortly stated as follows : Ghulam Dastgir, the present appellant, instituted Suit No. 530 of 1933 against the respondent Mohammad Yunis for the recovery of Rs. 1,000 alleged to be due upon a promissory note. He applied for attachment before judgment and certain property of Mohammad Yunis was so attached. Mohammad Yunis desiring to have this property released agreed to furnish security and the respondent Mohammad Amin stood surety to the extent of Rs. 710 and eventually the property attached was released. The suit brought by Ghulam Dastgir was dismissed by the Court of first instance, but on appeal that decision was reversed and the plaintiff's claim decreed. The successful plaintiff thereupon applied to execute his decree to the extent of Rs. 710 against the surety Mohammad Amin. The latter objected and his objections were allowed by both the lower Courts, hence this second appeal. The case for the decree-holder is that after attachment before judgment the respondent, Mohammad Amin executed a surety bond whereby he undertook to satisfy up to Rs. 710 any decree which might be passed against Mohammad Yunis, the judgment-debtor. A decree has been passed against Mohammad Yunis for more than Rs. 710 and accordingly the decree-holder claims that he is entitled to realise Rs. 710 from the surety.

2. The case for the surety Mohammad Amin on the other hand is that he merely stood surety for the judgment, debtor in the event of a decree being passed in favour of the appellant decree-holder in the Court of first instance. As that Court dismissed the plaintiff's suit, the surety's liability came to an end and he was under no liability to satisfy any decree which might ultimately be obtained on appeal. The point involved in this case is not free from difficulty and whilst there are a number of conflicting decisions of other High Courts there is no decision of this Court directly bearing upon the point. There can be no question that the respondent Mohammad Amin executed this security bond in consideration of the plaintiff withdrawing the attachment before judgment. Hence it is argued on behalf of the respondents that the security bond was intended to provide only such security as attachment before judgment would have provided. It has been decided by this Court and other Courts that in a case where there is attachment before judgment the attachment ceases once the suit is dismissed by the trial Court : see Ram Chand v. Pitam Mal (1888) 10 All. 506 and Balaraju Chettiar v. Masila Mani Pillai A.I.R. 1930 Mad. 514. It may well be that the consideration for Mohammad Amin's promise in this ease was the withdrawal by the plaintiff of the attachment before judgment but Mohammad Amin's liability must depend upon the precise nature of his promise. If upon a true construction of this bond he merely promised to stand security in the event of a decree being obtained in the Court of first instance, then clearly he is not liable in the event of the suit being dismissed by the Court of first instance. On the other hand, if he undertook to pay Rs. 710 generally in the event of a decree being obtained, then it would matter little whether such decree was obtained in the Court of first instance or ultimately in the lower Appellate Court. In my judgment the liability on the surety in this case depends upon the construction to be given to the promise contained in the security bond. The bond opens with a recital of the attachment before judgment and of the defendant's application for release of the property so attached on offering security. It is then stated:

On defendant's application for security, the Court has asked for a security of Rs. 710. I therefore, while in a sound state of body and mind and in full enjoyment of my five senses stand as surety and give it in writing in case a decree is passed against the defendant, I, the surety, shall deposit in Court Bs. 710 as ordered by the said Court. In case I fail to deposit the said amount in this Court, the Court aforesaid shall have power to realise in any way it likes Rs. 710 on account of security from the person and the property moveable and immoveable.

3. In my judgment upon a true construction of this security bond Mohammad Amin undertook to satisfy to the extent of Rs. 710 any decree which might be passed against Mohammad Yunis the judgment-debtor. There is nothing, in my view, to suggest that he only undertook to satisfy wholly or in part a decree which might be passed by the Court of first instance. The words 'in case a decree is passed against the defendant' are wide enough to cover the case of a decree passed on appeal in an Appellate Court. The fact that the consideration for this promise was the withdrawal of the attachment before judgment does not in my view necessarily limit Mohammad Amin's undertaking to satisfying any decree which might be passed by the Court of first instance only. In consideration of the withdrawal of the attachment before judgment, it was open to Mohammad Amin to limit his undertaking to the satisfaction of a decree which might be passed by the Court of first instance, but on the other hand it was equally open to him to under, take to satisfy wholly or in part a decree obtained either in the Court of first instance or on appeal. As I have stated the liability of the surety must depend upon the exact nature of his promise and in my view Mohammad Amin in this case did undertake to satisfy to the extent of Rs. 710 any decree which might be obtained against Mohammad Yunis.

4. The view which I have expressed is supported by a number of cases decided in other High Courts. In D. Manackjee v. R.M.N. Chettyar Firm A.I.R. 1927 Rang 321 it was held by a Bench consisting of Maung Ba and Brown, JJ., that the liability of a surety for satisfaction of a decree did not cease on a suit by a judgment-debtor to set aside the decree being decreed and the surety could be held liable if the suit was dismissed in appeal, unless there was a limitation as to his liability in the surety bond. I must observe, however, that these two learned Judges in a case of the same name reported in D. Manackjee v. R.M.N. Chettyar Firm A.I.R. 1927 Rang. 310 held that the liability of a surety for removal of attachment before judgment in a suit ceased on the dismissal of the suit and that the surety was not liable if the suit was decreed on appeal. They held that the word 'suit' did not include appellate proceedings. It is unfortunate that the precise words of the bond in question are not set out in the judgment and therefore I am unable to say with any certainty upon what precise ground it was held that the liability of the surety was limited to the proceedings in the Court of first instance. A case very similar to the case which I have to decide is Irangauda v. Irbasappa : AIR1927Bom84 which was decided by Shah and Fawcett, JJ. In that case an agreement of suretyship ran as follows:

The said defendant would obey the order of the Court and will produce the things mentioned in the inventory in Court or will pay the price thereof. If she failed to do so, I or my lawful heirs or executors will produce Rs. 5,000.

5. The surety bond was executed in consideration of an attachment before judgment being withdrawn and eventually the suit was dismissed by the trial Court, but on appeal that decision was reversed and, the suit was decreed. It was held that upon the terms of the security bond, the undertaking of the surety was not limited to a decree being passed in the trial Court and that the surety was liable though the I suit had been dismissed by the Court of first instance though eventually decreed on appeal. At p. 85, Shah, J. observed:

But apart from the decisions, to which I shall presently refer, it seems to me that the case must be decided principally on the terms of the bond. It appears from the bond itself that in the suit the Court was prepared to appoint a receiver in respect of the moveables. But it was by giving security that the defendant was allowed to retain possession of the moveables and the present appellant stood surety for the defendant for production of the moveables which were allowed to remain in the possession of the defendant.... There is nothing in the terms of this bond to limit the operation of the bond to the order which that Court would make. It is an undertaking given in general terms that the defendant would obey the order of the Court and would produce the things mentioned in the inventory in Court or will pay the price thereof and in the event of the defendants failing to produce them, if so required, the surety would be liable to the extent of Bs. 5,000. In the absence of any clear indication in the bond that only that Court, to which the bond was passed, was meant, and not the Court of Appeal which might ultimately make the order binding on the parties for the production of the moveables, the surety cannot escape his liability under the bond. It may be possible for the surety to limit his liability by using proper language to that effect. But in the absence of any language so limiting his liability, it seems to me to be fair to hold that he stood surety on behalf of the defendant that moveables would be produced by her which were mentioned in the inventory, whether the Court requiring her to produce the ornaments ultimately was that very Court or was acting in pursuance of the order made by a superior Court. That circumstance would not and should not make any difference to the liability of the surety.

6. Applying the reasoning of Shah, J. to the present case, it was open to Mohammad Amin to limit his undertaking to the satisfaction of any decree which might be obtained in the Court of the learned Munsif. He however undertook to satisfy any decree and in the absence of words limiting his liability to a decree which might be obtained in the Court of first instance, he is in my view liable to the extent of Rs. 710 to satisfy the decree obtained in the Appellate Court. A similar view was adopted by Beckett, J. in Mukat Bihari Lal Tejpal v. Khushi Ram A.I.R. 1935 Lah. 21. Further the View which I have expressed is supported by the observations of Lord Phillimore in the judgment of their Lordships of the Privy Council in Raj Raghubar Singh v. Jai Indra Bahadur Singh A.I.R. 1919 P.C. 55 at p. 269. Their Lordships had to consider the effect of a security bond for the restitution of mesne profits and the question arose whether the sureties were only to be liable in the event of the first Court deciding against them and not liable if that Court decided in their favour though the decree was finally reversed on appeal. At p. 269 Lord Phillimore observed:

Upon this point their Lordships are in agreement with the Subordinate Judge and the Court of the Judicial Commissioner. The other construction would give a strange result. According to it if the Court of the Judicial Commissioner had reversed the decree of the Subordinate Judge, but wrongly reversed it and been itself corrected on final appeal, so that the widow was really entitled to possession and to mesne profits, still the Court of the Judicial Commissioner having decided against her, the sureties would have had to pay to the defendant, who had no title, the amount of the mesne profits from the date of the original decision to that of the intermediate Court of Appeal. It would be strange indeed, if the language of the instrument bad been such as to create a kind of wagering contract of this nature; but there is no real difficulty in the language of the instrument.

7. On the other hand, there are oases which support the view that the liability of a surety under a bond such as the present is limited to any decree which might be obtained in the trial Court. As I have already stated the case in D. Manackjee v. R.M.N. Chettyar Firm A.I.R. 1927 Rang 321 is to that effect. A similar view was adopted by the Madras High Court in Subbarama Iyyar v. Somalinga Subba Ayyar : AIR1925Mad114 . In that case a security bond executed by the defendant to the Court in pursuance of the latter's order under O, 38, Rule 5 recited that the defendant had thereby given as security certain property and that in case the suit was decided in the plaintiff's favour, the defendant would be responsible for the suit amount. It was held that the bond really took the place of attachment before judgment and was meant to give security only for the purpose of enabling the first Court to execute its decree in case it passed a decree. As that Court did not pass a decree at all but dismissed the suit, the bond ceased to have any further effect though the Appellate Court decreed the suit. The facts of this case are different from the case before me because the security in this Madras case was given by the defendant himself in consideration of attachment before judgment being withdrawn. In such a case, it might well have been held that the security was only intended to afford the same protection to the plaintiff as the attachment before judgment would have done. Further, the actual terms of the bond are different from the bond which I have to construe and it is to be observed that the learned Judges at p. 117 observed: 'Each case must depend upon the terms of the particular bond'. They stated further:

That would really depend upon the language of the bond as construed with reference to the surrounding circumstances. In the present case we think the bond was given to take effect only if the attaching Court had passed a decree; and that not having taken place, the appellant is not entitled to any charge upon the properties on the strength of the bond.

8. In my judgment in so far as these views differ, the view taken by the Bombay High Court in Irangauda v. Irbasappa : AIR1927Bom84 is to be preferred to the view taken in the Rangoon and Madras cases to which I have referred, and I respectfully agree with the view taken by the learned Judges of the Bombay Court. For the reasons which I have given, I am satisfied that the surety in this case undertook to satisfy to the extent of Rs. 710 a decree obtained against Mohammad Yunis, whether such was obtained in the Court of first instance or on appeal. That being so, there was no force in the objection of the surety which should have been dismissed. I therefore allow this appeal, set aside the decree of the lower Appellate Court and dismiss the objections of Mohammad Amin in their entirety. The appellant must have his costs of this appeal and of the proceedings in the Courts below. Leave to appeal under, the Letters Patent is granted.


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