1. In this case the appellant brought a suit against the first respondent in the Sub-Court of Madura and pending that suit, applied for attachment before judgment under Order 38, Rule 5 of the Civil Procedure Code. The 1st respondent agreed to furnish security and executed the bond, the effect of which is the question now before us. His suit was subsequently dismissed by the first Court.
2. The appellant, however, succeeded in getting a decree in the appellate Court. He now applies to have his decree executed against the properties mentioned in the security bond. It should be stated that after this application had been filed, the 1st respondent was adjudicated an insolvent, and all his properties have become vested in the Official Receiver, who has been brought on record as the 2nd respondent. The Official Receiver raised a number of contentions against the decree of the appellant being executed against the properties in question. It is sufficient for the disposal of this appeal to refer to one of them, namely, that the bond ceased to have any effect as soon as the decree of the 1st Court was passed, dismissing the appellant's suit. The circumstances under which the bond was given we have already stated, namely that it was under Order 38, Rule 5. What that rule states is that the defendant should furnish security in such sum as may be specified under the order of Court to produce and place at the disposal of the Court when required, the said property (namely the properties that are attached) or such portion thereof as may satisfy the decree which may be passed by the Court in the case. We have to construe the bond with reference to the circumstances under which it was executed as its language is not clear.
3. The bond says : 'In pursuance of the order of the Court, dated 22-3-1918 in I.A. No. 68 of 1918 in the above suit, I have hereby given as security all the rights which I have in the property described hereunder for the aforesaid suit amount. In case the aforesaid suit is decided in favour of the plaintiff the undermentioned property myself and my heirs hereby bind ourselves to be responsible for the said amount. This security bond is executed for Rs. 5,000.'
4. The bond was executed to the Court. We have not before us the records of I.A. No. 68 of 1918 referred to in the bond.
5. But evidently it was some order passed by the Court under Rule 5, Order 38. Though the bond is worded somewhat widely it is clear that the respondent was giving security only for the decree that might be passed against him by the Court to which he gave the security.
6. There can be no doubt that if he had not furnished security and his property bad been attached before judgment, such an attachment would have ceased to have any effect as soon as the Court dismissed the plaintiff's suit. See Abdul Rahman v. Amin Sherif (1918) 45 Cal. 780. It seems, therefore, right to hold that the bond which really took the place of the attachment before judgment was meant to give security only for the purpose of enabling the 1st 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, we consider that the Subordinate Judge was right in thinking that the bond ceased to have any further effect.
7. This view is in conformity with the case reported in Shek Suleman v. Shirram Bhikaji (1898) 12 Bom. 71 followed in Gailamudi Venkatasubba Rao v. Chaparala Rosayya (1914) M.W.N. 714 by a Bench of this Court. An earlier case in the Privy Council, Ranee Birjobutee v. Pertab Singh (1860) 8 M.I.A. 160 raised a somewhat similar question with reference to the security given for a Privy Council appeal. That appeal was dismissed by the Privy Council for default and then was restored. The question arose whether the security of Rs. 4,000 given for the appeal would continue as security for the subsequent proceedings in the Privy Council after the Privy Council had dismissed the original appeal.
8. Their Lordships thought that it would not, and directed that a fresh security of 600 should be furnished by the appellant. Their Lordships were of opinion that when they dismissed the appeal in the first instance, the surety ceased to be bound, and, therefore, a fresh security was necessary.
9. A similar case was brought to our notice in In the matter of Moonshee Amir Ali Khan Bahadur v. Kasim Ali Khan (1865) 13 W.R. 403. In this Court we have a case in Errikulappa Chetty v. The Official Assignee of Madras (1916) 39 Mad. 903 where the money specified in the summons issued under Order 38, Rule 5 was paid by the defendant into Court; their Lordships held that the decree-holder had no charge on that money, as against the Official Assignee.
10. This view seems to be somewhat in conflict with the view expressed in Janaki Nagaswami Iyer v. Ramaswami Iyengar (1920) M.W.N. 264, but we must follow the rulings in Errikullappa Chetty v. Official Assignee of Madras (1916) 39 Mad. 903 in preference to the one in Janaki Nagaswami v. Ramaswami Iyengar (1920) M.W.N. 264.
11. Our attention has also been drawn to the case in Ramiah Aiyar v. Gopalier (1918) 41 Mad. 1053. That case is not against the view we are taking. Here the security was given only for enabling the decree to be executed, if any decree was passed by the Court. In the case cited, money had been deposited under Rule 2 of Order 38 to the credit of the action and it was held that the plaintiff who obtained a decree in the suit had a lien on the money.
12. That case is not an authority here as the plaintiff here did not get a decree in the Court to which security was given.
13. Finally our attention was drawn to the decision of the Privy Council in Raj Raghubar Singh v. Jai Indra Bahadur Singh A.I.R. 1919 P.C. 55. In that case no doubt there are some observations by their Lordships on p. 164, which appear to be in favour of the appellant. Their Lordships construing the security bond in the case say that the construction that the security was confined to the Judicial Commissioner giving a decree for the mesne profits in the first instance was not proper as '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 the 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'.
14. This shows that the bond should not be construed too literally, but reasonably with reference to its language and the surrounding circumstances. If the decree is reversed by the appellate Court the security goes with it : the security must therefore be taken to be for a subsisting decree only. The observations of their Lordships must be read with the language and the circumstances of the instrument which they were construing.
15. That was a case where security had been given for mesne profits on behalf of a widowed Rani, who was asking for possession of properties pending the appeal in the Judicial Commissioner's Court. She was directed to give security for mesne profits of the property and the bond in question was the security that was given. The bond slated that the hypothecated property should serve as security and be liable to the extent of a lakh of rupees for carrying out the aforesaid purpose. It was argued before their Lordships that this security bond ceased to have effect as soon as the Judicial Commissioner dismissed the appeal to him. This argument was met by their Lordships by pointing out that there was really no difficulty on the language of the instrument as by it the sureties made themselves liable for any order that might be passed by the Judicial Commissioner, not the first order merely but any order. The order for which the security was sought to be enforced was an order of the Judicial Commissioner himself though passed after remand and it fell within the language of the bond.
16. We cannot use this case as an authority for holding generally in all cases that whenever a bond is given as security to a Court for any decree that may be passed by that Court, it should be construed as meaning that the security was available for the proceedings not only in that Court, but also in the Courts of appeal.
17. 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. The appeal therefore fails and is dismissed with costs of the 2nd respondent.