1. This is an execution first appeal from an order dated the 14th of May, 1923 directing that the respondent surety be discharged.
2. In execution of a decree of Musammat Ammi Bai against Nathu Ram, the judgment-debtor, the latter was arrested but on the 26th of February, 1923 on the respondent Sham Behari Lal executing a security bond, the judgment-debtor was discharged. Under the bond Sham Behari Lal undertook that Nathu Bam would apply to the insolvency Court for being adjudicated an insolvent within a month from that date and in case he failed to do so he would be produced in Court, and, further, if he failed to appear in Court then the surety would produce him, when ordered, both in the Court executing the decree and the insolvency Court, and in case he failed to do so, then the surety would be liable to the extent of Rs. 17,000, the decretal amount.
3. Within one month of that date an application for being adjudicated an insolvent was presented by Nathu Ram to the insolvency Court but it was not in proper form and was consequently rejected. In the meantime an appeal on the execution side was preferred to the High Court and in this Court an application for stay was made and an ex parte ad interim stay order was granted on the 21st of March, 1923 and one month's time was given to Nathu Ram, judgment-debtor, to furnish security. This time was to expire on the 21st of April, 1923 and till then the proceedings were stayed. On the 9th of April, 1923 the surety, Sham Behari Lal, filed an application before the execution Court in which he alleged that the judgment-debtor was present in Court and prayed that the surety be discharged. Notice was ordered to be issued to the decree-holder as well as to the judgment-debtor. The judgment-debtor apparently did not appear again in person, and it was this application which was finally disposed of by the order under appeal. The learned Subordinate Judge came to the conclusion that inasmuch as the surety did produce the judgment-debtor on the 9th of April, 1923, he fulfilled his undertaking and must, therefore, be discharged from all liability. The decree-holder has appealed from this order.
4. A preliminary objection was taken on behalf of the respondent that no appeal lay. It was first contended that the case did not fall under Section 47 of the Code of Civil Procedure but fell under Order 38, Rule 3. If that contention were to be accepted then an appeal is expressly provided from that order under Order 43, Rule 1, Sub-clause (q). We are, however, of opinion that this case clearly fell under Section 47 of the Code. Under Section 145 when any person has become liable as surety for the fulfilment of any condition imposed on him, the decree or order may be executed against him to the extent to which he has rendered himself personally liable in the manner provided for the execution of the decree and such person shall for the purposes of appeal be deemed a party within the meaning of Section 47. It is clear that by his undertaking, Sham Behari Lal rendered himself personally liable and the execution could proceed against him if he did not fulfil the condition imposed on him. For purposes of appeal he must be deemed to have been a party to these proceedings. The order passed by the learned Judge of the Court below was an order passed in the execution department practically declaring that the person who was so made liable and who was to be deemed a party really was not liable. This, in our opinion, decided a question relating to the execution and discharge of the decree and was determined by the execution Court. In our opinion, therefore the order passed must be deemed to be a decree within the meaning of Section 2 of the Code and an appeal would, therefore lie.
5. On the merits we are satisfied that this appeal must be allowed. Under the terms of the security bond as well as Section 55 of the Code, the surety had to undertake that the judgment-debtor would apply to be declared an insolvent within one month of that date and he would appear, when called upon, in any proceedings upon the application for insolvency or upon the decree in execution of which he was arrested. The surety had never been called upon by the Court to produce the judgment-debtor. He brought him to the Court on the 9th of April, 1923 at his own instance. On that date the decree-holder was not present in Court and also the stay order passed by the High Court was in force and it was impossible for the Court or the decree-holder to take any steps to have the judgment-debtor taken into custody. The production of the judgment-debtor in Court on that date, therefore, did not amount to his appearance when called upon to appear. It is not suggested that the judgment-debtor was produced by the surety on any date after the 21st of April 1923 when the stay order had expired and when the decree-holder would be in a position to get the judgment-debtor arrested so as to be restored to the position he occupied before the security was furnished. Even if it be conceded that it is open to a surety to apply at his own instance to the Court to discharge him, that must be only when the Court sees that thereby the decree-holder is in no way prejudiced, otherwise the undertaking given by the surety cannot be said to have been fulfilled. In our opinion the appearance of the judgment-debtor on the 9th of April 1923 did not amount to a fulfilment of the condition imposed on the surety by the security bond. On that date the Court; could not do anything with the judgment-debtor. It follows, therefore, that the order discharging the surety was not a proper one and cannot be upheld. We accordingly allow this appeal and setting aside the order dated the 14th of May, 1923 dismiss the present application for discharge made by the surety with costs in both Courts.