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Amir S/O. Shaikh Rustom Musalman Vs. Saidanbai W/O. Babu Alias Jan Mohd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMadhya Pradesh High Court
Decided On
Case NumberCivil Misc. (Second) Appeal No. 104 of 1957
Judge
Reported inAIR1960MP68
ActsCode of Civil Procedure (CPC) , 1908 - Sections 52(2) and 145; Contract Act, 1872 - Sections 128
AppellantAmir S/O. Shaikh Rustom Musalman
RespondentSaidanbai W/O. Babu Alias Jan Mohd. and ors.
Appellant AdvocateS.D. Sanghi, Adv.
Respondent AdvocateD.C. Bharucha, Adv. for Respondent 1 and ;W.Y. Pande, Adv. for Respondents 2 and 3
DispositionAppeal allowed
Cases ReferredGokulchand v. Laxminarayan
Excerpt:
.....their possession. , rahimbai and chandibai would become personally liable to pay any amount to the decree-holder only if they failed to satisfy the court that the property of the deceased which came into their hands had been duly applied by them; and that, therefore, the liability of the surety was contingent on the judgment-debtors' failure to pay the amount personally under section 52(2) c. laxminarayan, air 1933 nag 287, contended that the term in the surety bond that rahimbai and chandibai shall duly act in accordance with the decree and that in the event of their failure to do so the surety would pay rs. 2436-15-0 to saidanbai implied that the decree-holder was entitled to proceed against the surety as soon as there was a failure on the part of the judgment-debtors to pay the amount..........vtznkj dks nsaxka mlesa gjdr djus dkughaa2. after the dismissal of appeal by the high court, the decree-holder saidanbai applied for execution of the decree against the surety amir. he objected to the execution contending that under the decree, and the bond executed by him his liability arose only in the event of the judgment-debtors chandibai and rahimbai becoming personally liable under section 52(2) c. p. c. and only to the extent that the judgment-debtors became personally liable to pay the decretal amount on their failure to satisfy the court that they had duly applied such property of the deceased as came into their possession. this objection was overruled by the civil judge, ii class, khargone executing the decree. the surety then preferred an appeal in the court of the district.....
Judgment:

P.V. Dixit, J.

1. The facts of this second appeal arising out of execution proceedings of a decree are that on 14th February, 1953 the respondent Saidanbai obtained a decree from the court of the civil judge, second class, Khargone, for recovery of Rs. 2100/- from the assets of one deceased Babu in the hands of the respondents Rahimbai and Chandibai. That decree was affirmed in appeal on 28th July 1954 by the additional civil judge, first class, Khargone. A second appeal was then preferred in the Madhya Bharat High Court by Rahimbai and Chandibai.

That appeal was dismissed on 5th January, 1956. The decree passed in the second appeal declared Rahimbai and Chandibai liable for Rs. 2625-10-0 besides costs and directed that this amount shall be recoverable out of the entire assets of the deceased Babu in the hands of Rahimbai and Chandibai. During the pendency of the second appeal in the Madhya Bharat High Court, a stay of the execution of the decree of the lower court was granted on the appellants in that appeal viz. Chandibai and Rahimbai furnishing solvent security to the satisfaction of the lower court for due performance of such decree or order as may ultimately be made in the appeal.

The appellant Amir furnished the requisite security and the execution of the decree in question was stayed. The bond executed by Amir stated that Rahimbai and Chandibai will obey the order that might be passed in the second appeal preferred in the Madhya Bharat High Court and that if they did not 'act' according to the order of the High Court, then he would personally pay Rs. 2436-15-0 plus costs to Saidanbai. The undertaking in the bond ran as follows :

Jh ukenkj gk;dksVZ dk mijksDr vihy esa tksfu.kZ; gdjlh dtZnkjksa ds fo:) gksosxk mldk ikyu dtZnkj ua- o 2 djsaxs os ;fnukenkj gk;dksVZ ds fu.kZ; ds vuqlkj crkZo ugha djsaxsa rks esa ?kj?kjk vo;ost:i;s 2436&15&0 o vkxs dk [kpZ vtZnkj dks nsaxkA mlesa gjdr djus dkughaA

2. After the dismissal of appeal by the High Court, the decree-holder Saidanbai applied for execution of the decree against the surety Amir. He objected to the execution contending that under the decree, and the bond executed by him his liability arose only in the event of the judgment-debtors Chandibai and Rahimbai becoming personally liable under Section 52(2) C. P. C. and only to the extent that the judgment-debtors became personally liable to pay the decretal amount on their failure to satisfy the court that they had duly applied such property of the deceased as came into their possession.

This objection was overruled by the Civil Judge, II Class, Khargone executing the decree. The surety then preferred an appeal in the court of the district judge, Nimar, which was dismissed. Hence this second appeal by the surety.

3. Mr. Sanghi, learned counsel for the appellant, argued that the liability of the surety under Section 128 of the Contract Act, was coextensive with that of the principal debtor unless otherwise provided by the contract of surety; that the decree passed by the Madhya Bharat High Court, for the performance of which by Rahimbai and Chandibai the appellant Amir stood surety, did not make Rahimbai and Chandibai personally liable to pay Rs. 2625-10-0 to Saidanbai; that the decree was for payment of the amount out of the property of the deceased Babu in the hands of Rahimbai and Chandibai; that under Section 52(2) C. P. C., Rahimbai and Chandibai would become personally liable to pay any amount to the decree-holder only if they failed to satisfy the court that the property of the deceased which came into their hands had been duly applied by them; and that, therefore, the liability of the surety was contingent on the judgment-debtors' failure to pay the amount personally under Section 52(2) C. P. C. and consequently the decree-holder was first bound to execute the decree by attachment and sale of the property of the deceased Babu in the hands of Rahimbai and Chandibai. Learned counsel placed reliance on Babu Rao v. Babu Manaklal, AIR 1938 Nag 413 and Subhankhan v. Lalkhan, AIR 1948 Nag 123.

4. In reply Mr. Bharucha, learned counsel for the respondent Saidanbai, basing himself solely on Gokulchand v. Laxminarayan, AIR 1933 Nag 287, contended that the term in the surety bond that Rahimbai and Chandibai shall duly act in accordance with the decree and that in the event of their failure to do so the surety would pay Rs. 2436-15-0 to Saidanbai implied that the decree-holder was entitled to proceed against the surety as soon as there was a failure on the part of the judgment-debtors to pay the amount decreed against them and that the liability of the surety arose when the judgment-debtors failed to repay the amount.

5. In my judgment, the contention advanced by the learned counsel for the appellant must be given effect to. It is well settled that a contract of guarantee must be construed strictly in favour of the surety (see AIR 1948 Nag 123). Section 128 of the Contract Act, when it expressly lays down that the liability of a surety is co-extensive with that of the principal debtor unless it is otherwise provided for by the contract, only means that the surety's liability is no less or no more than that of the principal debtor. As observed by Niyogi J. in AIR 1938 Nag 413 :

'When the creditor seeks to enforce the debt against the surety, the latter is legitimately entitled to ask : Is the principal debtor himself liable to you? If not, he has committed no default and you cannot compel me to discharge an obligation which has no existence ............'

Now, in this case the decree, which was passed by the Madhya Bharat High Court, was for the recovery of Rs. 2625/10/0 from the assets of the deceased Babu in the hands of Rahimbai and Chandibai. It did not make the two ladies personally liable for the repayment of the amount. In fact, the decree framed by the High Court first contained the words 'that the defendant-appellants to pay Rs. 2625/10/0.' But these words were deleted when an application for amendment of the decree was made on behalf of Chandibai, Rahimbai and Amir on the ground that the words were likely to be construed as casting a personal obligation on them for the payment of the amount.

There can, therefore, be no doubt that under the aforesaid decree Chandibai and Rahimbai or Amir did not become personally liable to pay the amount of Rs. 2625-10-0 to Saidanbai.

6. Now, under Section 52 C. P. C. when a decree is passed against a party as a legal representative of a deceased person and the decree is for payment of money out of the assets of the deceased in the hands of the legal representative, the decree-holder has first to prove that the judgment-debtor came into possession of specific items of property belonging to the deceased person. When he has proved this fact, then it is for the judgment-debtor who says that no such property is now in his possession, to prove that he has duly applied such property of the deceased which came into his possession.

It is only if the judgment-debtor fails to satisfy the court that he has duly applied the property of the deceased which came into his possession that the decree can be executed against the judgment-debtor personally 'to the extent of the property in respect of which he has failed to satisfy the court.' If then the judgment-debtor's personal liability to pay any amount does not arise unless and until the decree-holder has first executed the decree by attachment and sale of the property of the deceased in the hands of the judgment-debtors, and it would arise only if they fail to satisfy the court that they have duly applied the property of the deceased as came into their possession and only to the extent of the properly in respect of which they fail to satisfy the court, the surety's liability to pay personally any amount to the decree-holder cannot arise unless and until the judgment-debtors have become liable under Section 52(2) C. P. C., to pay any amount personally to the decree-holder. The liability of the surety arises only on the happening of the contingency contemplated by Section 52(2) C. P. C.

7. There is nothing in the surety bond executed by the appellant Amir to indicate that he undertook an unconditional obligation to pay Rs. 2436-15-0 to the decree-holder irrespective of the fact whether the judgment-debtors were or were not in possession of any property of the deceased or had duly applied it. The surety only undertook that the judgment-debtors shall duly act in accordance with the decree of the High Court and that if they did not, then he would pay Rs. 2436-15-0 to the decree-holder.

Under the decree of the High Court the judgment-debtors were not required to pay personally any amount to Saidanbai. That being so it cannot be urged that on the failure of the judgment-debtors to pay any amount to the decree-holder voluntarily, the surety became liable to pay the entire amount of Rs. 2436-15-0 to the decree-holder. The term in the surety bond read in the context of the decree means no more than this, that in the event of the judgment-debtors becoming liable to pay any amount personally to the decree-holder, the surety shall be liable to pay the amount to the decree-holder to the extent of Rs. 2436-15-0 plus costs.

The decision relied on by the learned counsel for the respondent, AIR 1933 Nag 287, is distinguishable on facts. That was a case where the decree itself cast a personal obligation on the judgment-debtor to pay certain amount to the decree-holder and the surety stipulated that if the judgment-debtor failed to duly act in accordance with the decree he shall pay whatever may be payable by him. It was held that the decree-holder was entitled to proceed against the surety as soon as there was a failure on the part of the judgment-debtor to pay the decretal amount and the terms of the surety bond embodied an assurance to the decree-holder that the judgment-debtor would voluntarily pay the amount.

The distinction between that case and the present case is that whereas in the former the decree cast a personal liability on the judgment-debtor to pay the decretal amount to the decree-holder here the decree does not impose any such personal obligation on the judgment-debtors.

8. For these reasons, I am of the opinion that the decree-holder is not entitled to proceed against the surety unless and until he first exhausts his remedy against the property of the deceased Babu in the hands of the judgment-debtors, and unless the judgment-debtors are held under Section 52(2) C. P. C. to be personally liable to pay any amount to the decree-holder. It is only in the event of the judgment-debtors becoming personally liable under Section 52(2) to pay any amount to the decree-holder that the surety would become liable to pay that amount to the decree-holder.

9. The decisions of the courts below are, therefore, set aside and the case is remitted to theexecuting court for disposal in the light of thisdecision. The appellant shall have his coststhroughout from the respondent Saidanbai.


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