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Hazari Lal and anr. Vs. Chhaju Ram and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtRajasthan High Court
Decided On
Case NumberCivil Exn. First Appeal No. 15 of 1956
Judge
Reported inAIR1960Raj319
ActsCode of Civil Procedure (CPC) , 1908 - Sections 145
AppellantHazari Lal and anr.
RespondentChhaju Ram and ors.
Appellant Advocate Kishore Singh, Adv.
Respondent Advocate Thanchand, Adv.
DispositionAppeal dismissed
Cases ReferredNandlal Chogaial v. Surajmal Gangaram
Excerpt:
.....to proceed against the principal debtor. 'if the aforesaid persons fail to pay the amount thereof, i will pay it in accordance with the bond,'it was held that these words do not limit the liability of the surety within the meaning of section 128 and the liability of the surety being co-extensive with that; it is not possible therefore to read the surety bond in the manner suggested by the learned counsel that it was only if all remedies failed against the principal debtor that the surety's liability would come into operation. the judgment debtor having failed to pay the decretal amount and the costs of the suit the decree holder was entitled to execute the decree against the sureties to the extent of their liability as contained in the surety bonds......accordingly moti ram and hazari lal who are appellants before us stood sureties and submitted the surety bonds which appear on pages 23 and 24 of the paper book.in the surety bond while moti ram made himself liable for the whole amount of the decree that may be passed against the defendants by the high court and the costs of the suit, hazari lal accepted his liability to the extent of rs. 12000/-only and costs of the suit. defendants' appeal was dismissed by the high court and on the judgment debtor's failure to pay the decretal amount, the decree holder took out execution against the sureties i.e., the appellants. the appellant, raised objections in the court below on the ground that the decree was not executable against them till the decree holder had not exhausted his remedy against.....
Judgment:

Bhargava, J.

1. This appeal is directed against an order of tha District Judge, Ganganagar dated 6th June, 1956 and has arisen under the following- circumstances:

2. One Chhaj'u Ram filed a money suit against firm Indrajmal Bholanath and during the pendency of that suit applied under Order 38 rule 5 for attachment of the defendants' property. On being directed by the court to furnish security one Hukamchand offered himself as surety for the defendants for the due performance of the decree which might eventually be passed against Mm. Tha suit was ultimately decreed. The defendants filedan appeal before the High Court against the said decree and also obtained an order for stay of the execution of the decree on the condition that they furnished security for the due performance of the decree to the satisfaction of the executing court. Accordingly Moti Ram and Hazari Lal who are appellants before us stood sureties and submitted the surety bonds which appear on pages 23 and 24 of the paper book.

In the surety bond while Moti Ram made himself liable for the whole amount of the decree that may be passed against the defendants by the High Court and the costs of the suit, Hazari Lal accepted his liability to the extent of Rs. 12000/-only and costs of the suit. Defendants' appeal was dismissed by the High Court and on the judgment debtor's failure to pay the decretal amount, the decree holder took out execution against the sureties i.e., the appellants. The appellant, raised objections in the court below on the ground that the decree was not executable against them till the decree holder had not exhausted his remedy against the judgment-debtor. This objection was overruled by the learned District Judge and the appellants have now come in appeal against that order.

3. Relying on the terms of the surety bonds learned counsel for the appellants has urged that the decree holder cannot take out execution against the appellants unless he had taken all the steps to realise the decretal amount from the judgment debtor in the first instance. The relevant portion of Moti Ram's surety bond translated in English is as under:--

'that if the respondents' decree will be upheld by the High Court and the defendant appellant does not pay the decretal amount and costs of the suit, the surety will pay the decretal amount and costs of the suit to the plaintiff respondent and in case of default the decree holder will be entitled to realise the money personally from the surety as well as from his properties both movable and immovable.'

The surety bond of the other appellant Hazarilal is in similar terms except that his liability was limited to the extent of Rs. 12000/- and costs as indicated above. Reliance is placed on the case of Radha Krishna Das v. Ajodhiya Das, 1937 All LJ 1265. We think the facts in that case are clearly distinguishable from the facts of the case in hand. There it was provided in the bond that the surety will pay the amount which may become due under the guarantee after attempts have been made to realise the same from Messrs. Kalyan Dass Brothers.' In the present case the obligation of the surety to pay the decretal amount arises on the failure of the principal debtor to pay the decretal amount and is not conditioned by the fact that the decree holder will have in the first instance to proceed against the principal debtor.

Section 128 of the Indian Contract Act provides that the liability of a surety is co-extensive with that of the principal debtor unless it is otherwise provided by the contract. In our opinion there is no contract express or implied in the surety bonds in question from which we may infer that the liability of the surety was not coextensive with that of the principal debtor. In the case of Nandlal Chogaial v. Surajmal Gangaram, AIR 1932 Nag '62, which is a case in point, on a consideration of the terms of the bond which were: 'if the aforesaid persons fail to pay the amount thereof, I will pay it in accordance with the bond,' it was held that these words do not limit the liability of the surety within the meaning of Section 128 and the liability of the surety being co-extensive with that; of the principal debtors, these words do not come within the purview of the qualifying clause of Section 128 and limit his liability in any way.

It is not possible therefore to read the surety bond in the manner suggested by the learned counsel that it was only if all remedies failed against the principal debtor that the surety's liability would come into operation. The judgment debtor having failed to pay the decretal amount and the costs of the suit the decree holder was entitled to execute the decree against the sureties to the extent of their liability as contained in the surety bonds.

4. This appeal has therefore, no force andis accordingly dismissed with costs.


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