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Rangaswami Chetty Vs. K.S. Narayana Iyengar - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1938Mad215
AppellantRangaswami Chetty
RespondentK.S. Narayana Iyengar
Cases ReferredAyyaswami Ayyar v. Sivakki Ammal
Excerpt:
- - all 105 the personal or individual liability of the surety under the security bond may not always be as extensive as that of the judgment-debtor, and the object of the above provision clearly is to limit the enforcement to the extent provided for by the security bond. but even if she was, the reasoning applies equally well to a case where she is not, the principle underlying the decision being that even if section 145 does not apply, the surety has an equal right of appeal......20 a.i.r. mad 780 venkatasubba rao j. says in a case where the surety had offered her immovable property as security:it is true that to the proceeding in question section 146 does not apply, and we must regard that the order against the surety was made, not under the terms of that section, but under the general power which the judicial committee has held the courts possess in regard to executing orders made against sureties.4. in discussing whether an appeal lies he adds:but having regard to their lordships' decision and the policy underlying section 145, we must hold that it was not intended that the surety's rights-should in this respect be abridged.5. it is sought to distinguish this case by showing that the question there was whether the surety was a representative of a party to.....
Judgment:

Horwill, J.

1. Two parties claimed to be lessees of a tope under the respondent in this appeal and one of them brought a suit against the other for possession. During the pendency of that suit, as both parties ware disputing possession, a receiver petition was put in, and the defendants in that suit, O.S. No. 18 of 1926, were appointed joint receivers upon their furnishing security for one year's estimated income, which amounted to Rs. 1425. This security was to be either in cash or in immovable property. The appellant deposited in Court, Rs. 1425, for investment in the Co-operative Bank. Later, the lessor applied to be made a party and he was added. The matter was taken in revision to the High Court, which held that he was not a proper party to that suit, and that he should file a suit himself. He thereupon filed O.S. No. 87 of 1928 and made the lessees defendants. As the matter in dispute had to be fought out in O.S. No. 87 of 1928, O.S. No. 18 of 1928 was by agreement dismissed, both parties agreeing that the receiver should continue throughout the second suit. Eventually, the second suit, O.S. No. 87 of 1928, was decreed and the defendants to the first suit were found liable. The plaintiff in O.S. No. 87 of 1928 thereupon applied to draw from Court the money that had been deposited by the appellant. The District Munsif of Trichinopoly ordered the money to be paid over to the successful plaintiff in O.S. No. 87 of 1928. The surety thereupon filed an appeal to the Judge, Court of Small Causes, Trichinopoly, who held that an appeal did not lie. The present A.A.O. has been filed against the order of the Small Cause Judge, and the C.R.P. against the order of the District Munsif. The only question that has been argued in the appeal against appellate order is whether the learned Judge was right in holding that no appeal lay. The security bond runs thus :

So, is accordance with the said order, I have this day deposited (the amount) in this Court for a period of six months as surety for the same to be invested in the Trichinopoly Co-operative Urban Bank as fixed deposit for six months, the aforesaid deposit amount being Rs. 1425, This sum of rupees one thousand four hundred and twenty-five has been paid by me as security. If the plaintiff sustained any loss In the matter of rendering accounts to Court properly by defendants 1 and 2, I agree to the said loss having been adjusted out of the said security amount. If the plaintiff's suit is dismissed, and if defendants 1 and 2 should properly render accounts till the disposal of the suit and act justly, I alone shall receive the said amount with interest after this security bond having been cancelled.

2. It is argued on behalf of the respondent that the appellant was not a surety in the ordinary sense of the word. He deposited in Court a certain sum of money which was to be paid over to the plaintiff in case he sustained any loss on account of the receivership, and, it is suggested, the Court, having passed a decree against the defendants, could at once Save ordered that this money be paid over to the plaintiff, and the petition for payment of money was not therefore in any sense an execution petition. I do not see why, because money has been deposited in Court, it is in a different position than if it had been deposited elsewhere, or if it had been in the custody of some other person or existed as some other form of property. It seems that the Court could not in its decree have straightway ordered the money in deposit to be paid over to the decree-holder; but in any case that was not done. The application put in after a decree was passed was that the money should be paid over to the decree-holder. It therefore seems that the appellant was in the same position as a surety who offered security of immovable or moveable property. 8, 145 puts the surety for the purpose of execution and of appeal on the same footing as an original party to the suit; and if Order 145 and Section 47 be read together, then if the decree-holder seeks to make the surety liable, it is open to the surety to raise objections to executability, and the inquiry of the Court into the question raised between the decree-holder and the surety is one under Section 47 and is therefore appeal able. Section 145 in terms applies only where the surety is personally liable; and it is therefore contended that as the surety in this case has deposited the money and that that money only is liable for the satisfaction of any loss that may have occurred, Section 145 does not apply to an agreement of this nature. A Bench of the Allahabad High Court in Mahalakshmi Rai v. Badan Singh (1924) 11 A.I.R. All 105

The personal or individual liability of the surety under the security bond may not always be as extensive as that of the judgment-debtor, and the object of the above provision clearly is to limit the enforcement to the extent provided for by the security bond.

3. I do not think however that their Lordships of the Privy Council in Raj Raghubar Singh v. Jai Indra Bahadur Singh (1919) 6 A.I.R. P.C. 55 found that the surety who was not personally liable in the sense generally under, stood came under Section 145. Their Lordships appear to have taken it for granted that he did not. They found some difficulty in deciding what the remedy of a decree, holder against the surety was. They discussed the possibility of his bringing a suit, under the Transfer of Property Act; and they found that that course was not open to him. They then say at p. 167 :

It is suggested that they are bound to the Court but the Court is not a juridical person. It cannot be sued. It cannot take property, and as it cannot take property it cannot assign it. It remains therefore that here is an unquestioned liability, and there must be some mode of enforcing it and that the only mode of enforcing it must be by the Court making an order in the suit upon an application to which the sureties are parties, that the property charged be sold unless before a day named the sureties find the money,

i.e. their Lordships think that if the sureties are made parties to the application to make them liable on a bond then they become parties as it were to the suit and can therefore be made liable in execution in any inquiry Under Section 47. Although therefore they find that Section 145 does not apply, they would apply provisions analogous to Section 145 to a case to which Section 145 does not literally have any application, Raj Raghubar Singh v. Jai Indra Bahadur Singh (1919) 6 A.I.R. P.C. 55 was considered in Ayyaswami Ayyar v. Sivakki Ammal (1933) 20 A.I.R. Mad 780 Venkatasubba Rao J. says in a case where the surety had offered her immovable property as security:

It is true that to the proceeding in question Section 146 does not apply, and we must regard that the order against the surety was made, not under the terms of that section, but under the general power which the Judicial Committee has held the Courts possess in regard to executing orders made against sureties.

4. In discussing whether an appeal lies he adds:

But having regard to their Lordships' decision and the policy underlying Section 145, we must hold that it was not intended that the surety's rights-should in this respect be abridged.

5. It is sought to distinguish this case by showing that the question there was whether the surety was a representative of a party to the suit; but even if she was, the reasoning applies equally well to a case where she is not, the principle underlying the decision being that even if Section 145 does not apply, the surety has an equal right of appeal. The learned advocate for the respondent seems to distinguish the position of the appellant from that of an ordinary surety by pointing out that he had not really offered his own money and that what he had deposited was the estimated value of the cocoanuts of the tope which he himself had purchased. Even if that were the case, it would only explain why he had offered himself as surety. His liability would be as a surety, though he had secured himself by purchasing in advance the cocoanuts. It has been suggested that as I have been taken through most of the important documents in the case, I might dispose of this matter myself; but it seems more satisfactory that the lower Appellate Court, which is the final Court of fact, should decide a matter in which questions of fact must of necessity arise. I do not think that the point raised is altogether a question of law. The second appeal is therefore allowed, and the first appeal remanded for disposal on the merits by the lower Appellate Court. The costs of this appeal will be costs of the first appeal.

6. C.R.P. No. 11 of 1933. I have decided in C.M.S.A. No. 149 of 1931 that an appeal lay from the decision of the District Munsif. This petition is not therefore competent; but in view of the fact that it has been the contention of the respondent that no appeal lay, it is unnecessary for me to order any costs in dismissing the petition, except as to costs of printing, which will be paid to the respondent.


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