1. This Civil Revision Petition has been posted before a Bench at the instance of one of us on account of the important practice in procedure involved.
2. The facts are : An ex parte decree was passed against the second defendant in S.C.S. No. 1852 of 1950 on 19th November, 1952. The second defendant filed I.A. No. 391 of 1952 on 20th November, 1952, to set aside the ex parte decree. No security was furnished along with the application. It was stated in the affidavit that the petitioner was prepared to give security for the decree amount. During the pendency of I.A. No. 391 of 1952 the second defendant filed I.A. No. 392 of 1952 on 6th December 1952, requesting the Court to accept the security bond. On 19th December 1952, adhesive stamps for eight annas were affixed to a separate sheet of paper and that sheet was attached to security bond. The District Munsif passed orders on 10th December, 1952, that the security was accepted and posted the application for counter-statement and disposal. The plaintiff opposed both the petitions I.A. Nos. 391 and 392 of 1952 on the ground that the security bond was not filed and registered within the period of limitation.
3. The learned District Munsif relying upon the decision in Chattiyelan Kannakurup v. Raman Nayar : AIR1943Mad51 , held that it was necessary that a registered bond should be filed within 30 days and that the mere filing of a draft bond was not sufficient compliance with the provision of Section 17 of the Provincial Small Cause Courts Act and dismissed the application. Hence this Civil Revision Petition.
4. Under the proviso to the Section 17(1) as it stands now after its amendment in 1935, the applicant for setting aside the ex parte decree or for review of judgment shall and must, at the time of presenting the application, do one of the two things, namely either deposit in the Court the amount due from him under the decree or give such security for the performance of the decree as the Court may have directed on a previous application made by him in this behalf. The proviso clearly predicates the existence of an application to be made by an applicant who is not prepared to deposit the decretal amount in cash to ask for the filing of a security as a substitute therefor. If he does not make the previous application, he must deposit the money in full. If he has made it and been successful in getting an order for security instead of depositng the money in full, he may furnish the security which the Court may have previously directed.
5. The period of limitation for an application to set aside an ex parte decree is 30 days under Article 164 of the Limitation Act. Section 5 of the Limitation Act, 1908, docs not apply to applications under Order 9, Rule 13, Civil Procedure Code, for setting aside an ex parte decree, except in Madras, and hence it is not open to a Court to accept a deposit or security beyond the period of limitation prescribed for the application.
6. In Madras by a rule framed by the High Court, Section 5 of the Limitation Act has been made applicable to applications for setting aside ex parte decrees. But it must be noted that under Section 5 all that can be done is to condone the delay for a sufficient reason in making the application under Order 9, Rule 13. But where the application is made within time and the deposit is made or security is furnished beyond the prescribed time, Section 5 can have no application. Section 14 of the Limitation Act, however, applies to applications contemplated by the present section.
7. In regard to the interpretation of the proviso as it stood before the amendment and which holds good even under the proviso as it stands now after its amendment in 1935, the Allahabad High Court in the Full Bench decision in Ram Bharose v. Ganga Singh I.L.R. (1931) All. 154, laid down the following propositions:
(1) The applicant must present his application within 30 days either accompanied by a cash deposit or with a statement that he is prepared to give security, tendering the proposed security and asking for the direction of the Court.
(2) In case the Court is not prepared to accept security the applicant must make the deposit, otherwise his application will be rejected,
(3) If the Court is agreeable to accepting a security, it should consider whether the security already offered, if any, is acceptable to it or should name a security which must be furnished within 30 days;
(4) Where the applicant has failed to ask for a direction, or if he has asked for it but the Court does not give any direction and issues a notice, the Court shall be deemed to have approved the deposit made or security offered as the case may be;
(5) Where a security is put in by the applicant and accepted by the Court either expressly or by implication such as by issue of notice, the application will be treated as a good application though it would still be open to the decree-holder to challenge the nature and sufficiency of the security and to the Court to direct such further modification as it may deem fit.
(6) Where there has been delay on the part of the Court itself in giving its directions or approving expressly or by implication the security already tendered and that has resulted in the expiry of the period of limitation before the applicant has a fair opportunity of complying with the directions, then the Court may in a suitable case consider and exercise its inherent powers under Section 151, Civil Procedure Code.
These propositions held good even under the proviso as it stands now after its amendment in 1935.
8. There is no warrant in law for holding that the security bond must hypothecate immovable or movable property. Even personal security may suffice, if the Court is satisfied of its sufficiency.
9. In regard to the furnishing of immovable property as security, there can be no dispute that a draft security bond must be filed and the security accepted by Court and a registered bond should be filed within 30 days. There may be cases however where the draft bond is filed within time and the registered bond cannot be filed owing to (a) the Court taking its own time in passing orders on the application for furnishing immovable property security; (b) order the testing of the security within or without notice to the decree-holder and this taking time and rendering it necessary for additional security or substituted security being given and (c) time may be taken in the Registrar's office for getting the document registered. Therefore, we have got to consider whether those applications ought to be automatically dismissed even when the draft security bond is in order and is filed within time and the action contemplated above results in a registered security bond not being filed within 30 days.
10. The lower Court has relied upon Chattiyelan Kannakurup v. Raman Nayar I.L.R. (1931) All. 154. The facts of that case were : The application under Section 17 to set aside an ex parte decree made on 7th April, 1941, four days after the ex parte decree had been passed, was not accompanied by the deposit of the decree amount nor by the offer of any security. On 9th April, a further affidavit was filed in which certain property was offered as security to the Court in connection with the application to set aside the ex parte decree. The Court ordered notice to the decree-holder and also ordered the property offered as security to be tested. The result of the test was that the property was found to be sufficient and a report to this effect was received early in July. Although a draft bond was put in within the period of thirty days prescribed by Section 17, the filing of a registered bond was postponed until the result of the testing of the draft bond should be made known and in the end as the application was dismissed on 21st July on the ground that Section 17 was not complied with, no registered bond was filed. King, J., who decided the case has referred to the decision of Ramesam, J., in Balakrishna Iyer v. Pichaimuthu Pillai A.I.R. 1922 Mad. 330, dealing with the same Section of the Act as it stood in 1922, and held that it was necessary that registered bond should be filed within thirty days and that the mere filing of a draft bond was not sufficient compliance with the provision of the section requiring the giving of security. King, J., has also referred to two other decisions of this Court where two learned Judges construed the expression 'furnish security' as equivalent to 'tender security', Jackson, J., in 52 M.L.J.53, connected with the furnishing of. security in order to obtain an order of stay and Happell, J., in C.R.P. No. 1511 of 1938 in a case dealing with Order 41, Rule 10, Civil Procedure Code. King, J., followed the decision of Ramesam, J., because it logically seemed to him that that view was right because in Section 17 an alternative is given and it is quite clear that in no circumstances can there be any deposit of the decree amount at any time later than 30 days. It seemed therefore logical to him to assume that if the decree amount must be deposited within that time, something effectual must be done within that time in the matter of giving security. Therefore, if the expression 'give security' be analysed, it could not be seriously argued that the mere production in Court of a piece of paper with a memorandum of property upon it affords either the Court or the decree-holder any kind of security whatever.
11. This decision of King, J., was approved in a Bench decision of this Court in Kalisetti Penchalu Setti v. Potireddi Subbareddi : AIR1943Mad520 . The Bench referred to the decision of King, J., and the other decisions referred to by King, J., noted above and held
It is unnecessary for the Court in this case to consider whether that opinion (that is to say, Jackson and Happell, JJ.) is open to objection because here we are not dealing with an application under the Code of Civil Procedure but with an application filed under Section 17 of the Provincial Small Cause Courts Act, and the Court can only have regard to the wording in that section. We are in full agreement with the interpretation placed upon it by Ramesam, J.
12. We consider that these decisions place too narrow a construction upon the security that is required under Section 17 of the Provincial Small Cause Courts Act. The reasons which have been fully set out and which we adopt in a Bench decision of the Patna High Court in Rajeshwari Prasad Singh v. Brahmanand Lall I.L.R. (1933) Pat. 745, and from which the following two extracts are taken, indicate what we consider to be the correct interpretation of what should be done to comply with provisions of Section 17 within the prescribed time.
Khaja Mohammad Noor, J.
It has been held in a large number of cases in Calcutta and in some decisions of several learned Judges of this Court sitting singly that the provisions of Section 17 of the Act are mandatory; that die Courts have no power to extend time for furnishing security; and that security, either cash or in any other form which the Courts approve, must be filed within the period of limitation. With all this, if I may say so, I entirely agree. As to decisions of this Court, see Ram Charitar Ram v. Hashim Khan (1920) 1 Pat. L.T. 323 and Bishun Dayal Thakur v. Sheo Tahal Sahu 62 Ind. Cas. 108, I also respectfully agree with die decision of Sen, J., in Kuleshwar Lal v. Satya Brata Banerji (1926) 7 Pat. L.T. 38, that filing of a draft security bond is not sufficient compliance with the provisions of Section 17 of the Small Cause Courts Act. But here the question is, whether a duly executed bond (though not registered but subsequently registered) is a sufficient offer of security within the meaning of Section 17 of the Small Cause Court Act. In my opinion the criteri on is this. Was die security which the party placed in the hands of the Court and which die Court ultimately accepted sufficient to enforce the obligation upon him? Judged by this test an unregistered security bond is, in my opinion, sufficient compliance with die law, provided mat die delay in getting it registered is not due to any fault of the applicant himself. In this case the applicant placed himself in the hands of the Court by giving the Court a fully executed bond. Once he did so, he could have been compelled to register it under the provisions of the Registration Act and die liability of the security bond could have been enforced against him. It was open to the Court to call upon the applicant to have the document registered there and then; but the Court deferred passing orders till it was satisfied as to the sufficiency of the security and the document was registered within the time allowed by the law for registration of duly executed documents. An applicant who instead of giving security in cash gives it in property, he does so at his own risk. If later on the security offered is found to be insufficient and the Court rejects it on that ground, the applicant will have to suffer its consequences. But in this case, as I have said a properly executed bond was offered and the Court by its order indicated that it was prepared to accept it provided the security was sufficient. The security was found sufficient and the document was registered. There was, in my opinion, sufficient compliance with the law.
The word 'security' is not a word which has been defined either in this Act or in the General Clauses Act. Generally speaking, that word signifies anything that makes the money more assured in its payment or more readily recoverable. In the present case the bond that was tendered as security, as has already been pointed out by my learned brother, was properly executed, stamped and attested, and it was filed within the time allowed by law. The Court before which it was filed accepted the bond as security and directed the applicant to register it. Unfortunately the application for restoration of the suit subsequently came up for disposal before another Judge who had taken the place of the Judge who had accepted the security, the latter having been transferred, and probably this has brought about the present state of affairs. In my view, the first Judge who dealt with the matter having accepted the bond as security, it was not open to the Court subsequently to say that the security was not to its satisfaction.
13. To sum up, we hold that what Section 17 of the Provincial Small Cause Courts Act requires is that within the period of 30 days security should be placed in the hands of the Court by the applicant of such a nature that if ultimately accepted it should be sufficient to enforce the obligation upon him and make the money assured in its payment or more readily recoverable. Judged by this test, a duly executed unregistered security bond would be sufficient compliance with the law, though not registered but subsequently registered, the delay in getting it registered being not due to any fault of the applicant.
14. Bearing these principles in mind, we have to examine the facts of this case. The facts which emerge from an examination of the records are that the petitioner in the lower Court appears to have offered both personal security and immovable property security. In the draft security bond filed along with the application, he has mentioned two items of properties. It is not clear whether these properties were mentioned so that if after test they were found to belong to the petitioner this would be considered sufficient to his personal security bond or these two items of property themselves were offered to be given as immovable property security which would necessitate the filing of a registered bond subsequently and acceptance by the Court. The learned District Munsif without making clear whether he wanted personal security on the strength of these two items of proprties or immovable property security of these two items, has ordered test. On the test warrant being returned as satisfactory, he has accepted the bond but without making it clear once again whether a registered security bond has to be filed or that the bond bearing adhesive stamps of the value of eight annas was itself accepted. The only order we find is 'security bond accepted. Counter 1st January, 1953.' Thereupon the plaintiff opposed both the petitions and contended that the security bond was not filed and registered within the period of limitation and which contention has found acceptance at the hands of the succeeding District Munsif on the foot of the decision in Chattiyelan v. Raman Nayar (1942) 2 M.L.J. It will be seen that looked at from any point of view there has been sufficient compliance within the meaning of Section 17 of the Provincial Small Cause Courts Act and the learned District Munsif was not justified in holding that there has been failure to do so and the ex parte decree could not be set aside.
15. The order of the lower Court is set aside, and on the foot that a draft security bond offering immovable property as security within the time prescribed has been filed, the learned District Munsif is directed to proceed further with the disposal of the application according to law.
16. This Civil Revision Petition is allowed and in the circumstances without costs.