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K.P. Ambady and ors. Vs. K.M. Balan - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKerala High Court
Decided On
Case NumberCivil Revn. Petn. No. 22 of 1958
Judge
Reported inAIR1959Ker27
ActsContract Act, 1872 - Sections 74, 151 and 152; Code of Civil Procedure (CPC), (1908) - Sections 51 and 145
AppellantK.P. Ambady and ors.
RespondentK.M. Balan
Appellant Advocate N. Sundara Iyer and; V.R. Venkitakrishnan, Advs.
Respondent Advocate V.P. Gopalan Nambiar and; V.P. Gopikumar, Advs.
Cases ReferredSee M. A. Malik v. Thiruvengadaswami
Excerpt:
.....safe custody under security bond dated 28-1-1956, executed by him and two others, of whom the 1st petitioner was one. sundara iyer for the petitioners urges that the defendant must be taken to be a bailee within the meaning of section 151 of the indian contract act & if so, he could be made liable only if he failed to exercise the ordinary prudence of an owner. even so, his liability cannot be measured by section 151. for the terms of the security bond would appear to provide for an unconditional undertaking by the defendant in the matter of the safe return of the articles. 402 and emphasises clearly the trust aspect with which we are now dealing. thiruvengadaswami, air 1950 mad 208. it cannot be denied that confidence was reposed in the defendant when the goods were handed to him for..........execution of the decree, in connection with the enforcement against the revision petitioners, of a security bond executed by them.2. the suit was one for money. pending suit the plaintiff-respondent applied for and obtained attachment before judgment of certain movables belonging to the defendant --2nd petitioner. immediately thereafter, the movables were handed over to the defendant himself for safe custody under security bond dated 28-1-1956, executed by him and two others, of whom the 1st petitioner was one. the suit was decreed on 7-2-1957. subsequently, on notice issued to produce the articles for purposes of sale in execution, the 1st defendant defaulted. the plaintiff then moved for enforcement of the security bond as against the petitioners by issue of warrant of arrest. the.....
Judgment:
ORDER

Varadaraja Iyengar, J.

1. The matter arises in execution of the decree, in connection with the enforcement against the revision petitioners, of a security bond executed by them.

2. The suit was one for money. Pending suit the plaintiff-respondent applied for and obtained attachment before judgment of certain movables belonging to the defendant --2nd petitioner. Immediately thereafter, the movables were handed over to the defendant himself for safe custody under security bond dated 28-1-1956, executed by him and two others, of whom the 1st petitioner was one. The suit was decreed on 7-2-1957. Subsequently, on notice issued to produce the articles for purposes of sale in execution, the 1st defendant defaulted. The plaintiff then moved for enforcement of the security bond as against the petitioners by issue of warrant of arrest. The petitioners pleaded non-liability on various grounds out the plea was rejected, Hence this revision.

3. We are concerned with only two of the objections raised by the petitioners. Firstly, that the goods were lost on account of theft and they were in consequence exempt from liability. Secondly they had no means to pay and were therefore not liable to arrest. Taking up the first ground, learned counsel Mr. Sundara Iyer for the petitioners urges that the defendant must be taken to be a bailee within the meaning of Section 151 of the Indian Contract Act & if so, he could be made liable only if he failed to exercise the ordinary prudence of an owner.

Learned counsel complains that the court below had altogether omitted to consider the matter and the question may therefore be remitted for consideration by that court. Now the condition of the bond executed by the defendant was that he should produce the articles whenever and wherever and to whom-so-ever ordered by the Court and that in default of production of the said movables the defendant and big sureties will jointly and severally be liable to pay to the court, an amount of Rs. 1,329-6-0, that is, thrice the amount as shown in the attachment list. Section 151 of the Contract Act says:

Section 151. 'In all cases of bailment the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances take of his own goods of the same bulk, quality and value as the goods bailed.'

Section 152 then says :

Section 152. 'The bailee, in the absence of any special contract, is not responsible for the loss, destruction or deterioration of the thing bailed, if he has taken the amount of care of it described in Section 151'.

Whether the jural relationship between the Court and the defendant as constituted by the security bond in this case is that of a bailor and bailee may be open to doubt. Even so, his liability cannot be measured by Section 151. For the terms of the security bond would appear to provide for an unconditional undertaking by the defendant in the matter of the safe return of the articles. He must therefore be held to have entered into a special contract contemplated by Section 152, to produce them into court in any event, short of vis major. There is therefore no force in the objection raised that the defendant or his sureties were not liable on account of loss by theft. The court below has no doubt not dealt with the matter. But in the view I have taken as above, the petitioners: cannot have any real grievance. For all that we know the point was not seriously taken before that court.

4. Coming to the second question as to nonliability for arrest, the proviso to Section 51 of the Civil Procedure Code while insisting generally on a preliminary hearing of the judgment-debtor as regards his arrest in execution, excludes front such requirement three categories of cases the last of which is contained in Clause (c)

'that the decree is for a sum for which the judgment-debtor was bound in a fiduciary capacity to account.'

The court below found that the case here fell within this category and the petitioners could not therefore plead exemption from arrest. Learned counsel objects that it is wrong to import a fiduciary or trust aspect in the bailor-bailee relationship which alone according to him. is for this purpose also constituted here. In any event, he says, die nature of the defendant-judgment-debtor's obligation should be ascertained from the decree and not from the security bond, in which he had occasion to join. If so there would unquestionably be no case of fiduciary capacity.

5. I will assume here again that the defendant is a bailee under the security bond vis-a-vis the court. If so, what exactly is his position in law for the present purpose. Halsbury, Laws of -England, 3rd Edn. Vol. II, page 94, Article 190 defines bailment as follows ;

'A bailment, properly so called, is a delivery of personal chattels 'in trust', on a contract, express or implied, that 'the trust' shall be duly executed, and the chattels redelivered in either their original or an altered form, as soon as the time or use for, or condition on which they were bailed shall have elapsed or been performed.'

(The underlining (here in ' ') is mine.)

This definition was approved in Re Davis and Co. Ltd.. 1945 Ch. 402 and emphasises clearly the trust aspect with which we are now dealing. Similarly Story on Bailments divides bailments from the point of view of trust into three classes: (1) those in which the trust is exclusively for the benefit of the bailor or of a third person, (2) those in which the trust is exclusively for the benefit of the bailee, and (3) those in which the trust is for the benefit of both parties or of both or one of them and a third party.

Indeed it is unnecessary for the purpose of Clause (c) that there should be an express trust. It is enough there is a quasi-trust or a fiduciary position involving a liability to account in relation to another party. See M. A. Malik v. Thiruvengadaswami, AIR 1950 Mad 208. It cannot be denied that confidence was reposed in the defendant when the goods were handed to him for safe custody, that he will, produce them into court when called upon. I therefore hold along with the court below, that the defendant and following him, his sureties fell within the classification of Clause (c) to the proviso to Section 51 and were accordingly liable for arrest without more.

6. The alternative argument of learned counsel has also no merit. For we are here dealing with the enforcement under Section 145 C. P. C. of the security bond as against the executants thereof who comprise the defendant as well.

7. There is however one matter which, though not addressed by counsel, I should not omit to notice, viz., the provision in the security bond for a deposit of thrice the value of the goods on default of the production. This provision is clearly in nature of a penalty and inserted in terrorism. In such cases the court has undoubted powers, in the exercise of its equitable jurisdiction to relieve the party and confine his liability to the extent of a reasonable compensation to the other side not exceeding the penalty stipulated for. See S. 74 Indian Contract Act. I therefore reduce the liability of the defendant and his sureties under the security bond here; to the amount covered by the decree in the case which, I am told, comes to about a half of the amount fixed under the bond. Indeed the plaintiffs prayer in his execution petition would appear to be only the recovery of the decree amount by enforcement of the bond.

8. Subject to the reservation as above, the revision petition is dismissed. The respondent will get his costs from the revision petitioners.


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