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S. Sankaranarayana Aiyar Vs. Paramasivam Pillai and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported in(1941)2MLJ650
AppellantS. Sankaranarayana Aiyar
RespondentParamasivam Pillai and anr.
Cases ReferredAlagammai v. Arunachalam
Excerpt:
.....a surety under this section cannot claim to be released from his obligation at his..........before the court under arrest, the petitioner deposited rs. 500 as cash security and executed a surety bond on the strength of which the court released the judgment-debtor from arrest. the bond runs as follows:in case the respondent (that is the judgment-debtor) fails to apply to be declared an insolvent within one month from this date, and in case the said respondent fails to appear, when called upon in any proceeding upon such application or upon the decree in execution of which the said respondent was arrested, the court may direct the cash security to be realised, but not personally from the depositor.3. the second respondent then applied to be adjudicated insolvent and was adjudged accordingly. a few months later, when those proceedings were still pending, the petitioner applied.....
Judgment:

Patanjali Sastri, J.

1. This is a petition to revise the order of the Additional Subordinate Judge, Tinnevelly, refusing to discharge the petitioner from his suretyship under a security bond executed by him under Section 55(4) of the Civil Procedure Code.

2. The facts are simple and not in dispute. The first respondent obtained a decree against the second respondent and had him arrested in execution thereof. When the latter was brought before the Court under arrest, the petitioner deposited Rs. 500 as cash security and executed a surety bond on the strength of which the Court released the judgment-debtor from arrest. The bond runs as follows:

In case the respondent (that is the judgment-debtor) fails to apply to be declared an insolvent within one month from this date, and in case the said respondent fails to appear, when called upon in any proceeding upon such application or upon the decree in execution of which the said respondent was arrested, the Court may direct the cash security to be realised, but not personally from the depositor.

3. The second respondent then applied to be adjudicated insolvent and was adjudged accordingly. A few months later, when those proceedings were still pending, the petitioner applied to the executing Court under Sections 55 and 151 of the Civil Procedure Code offering to produce the judgment-debtor before the Court on any day that might be fixed and praying for discharge from his suretyship, as he did not like to continue as surety any longer. The Court below rejected this application on the ground that, in view of the terms of the security bond, the petitioner could not claim release from his obligation as surety, and there was nothing in Section 55 of the Code to justify such release. The petitioner has challenged the validity of this order.

4. He contends that a security bond given under Section 55 (4) of the Code is in the nature of a continuing guarantee for the production of the judgment-debtor whenever required by the Court, and when the surety offers to produce the judgment-debtor and desires to be absolved from further liability under the bond, the Court is bound to cancel the bond and discharge the surety. His learned Counsel did not suggest that Section 130 of the Contract Act which entitles the surety to revoke a continuing guarantee as to future transactions was in terms applicable to the present case, but it was said that the principle of that section applied by way of analogy. It is difficult to see what analogy there is between a security bond executed by a surety under Section 55 (4), Civil Procedure Code and a continuing guarantee as defined in Section 129 of the Contract Act. In the former case, there is no series of transactions giving rise to distinct liabilities which the guarantee is intended to cover but there is only a single transaction under which the surety undertakes responsibility for certain things to be done in future though on different occasions. In Subroya Chetty v. Ragammall : (1904)14MLJ482 a Bench of this Court held that a Security bond given by a surety under Section 78 of the Probate and Administration Act for the due administration of an estate could not be revoked as to future acts of administration by the surety giving notice to the Judge or other officer of the Court I can see no distinction between a security bond of the kind dealt with in that decision and the one now before me so far as the applicability of Section 130 of the Contract Act or its principle is concerned. It is clearly provided by the terms of the security bond in this case which is in conformity with Section 55 (4) of the Code, that the security deposited by the petitioner should be realised if the judgment-debtor did not apply to be declared an insolvent within a month from that date or did not appear when called upon to do so in the proceedings on such application or in execution of the decree. It would be contrary to this stipulation to release the petitioner from his undertaking and set free his security deposit, and I can find nothing in the Code or under the general law to warrant such procedure. This conclusion derives further support from a comparison of Section 55 (4) with the provisions of Order 38, rr. 2 and 3. These rules expressly provide that a person who becomes a surety for the appearance of a defendant may at any time apply to the Court to be discharged from his obligation and that the Court shall direct his discharge on such application when the defendant is either produced by the surety or appears in pursuance of a summons or warrant issued by the Court. The markedly different terms of Section 55 (4) and the absence of any provision for the discharge of the surety at any stage before he has fully carried out his undertaking point clearly, in my view, to the conclusion that a person who becomes a surety under this section cannot claim to be released from his obligation at his pleasure.

5. Petitioner's learned Counsel placed reliance on a decision of a single Judge of the Lahore High Court in Siraj-ud-Din v. Guranditta Mal A.I.R. 1934 Lah. 962, which no doubt supports his contention but with all respect I am unable to agree with it. I was also referred to a decision of Pandrang Row, J., in Alagammai v. Arunachalam : AIR1935Mad543 which, I find, however, is no authority on the point now under consideration. The question for decision in that case did not relate to the right of a surety to be released at any time from his liability on production of the judgment-debtor, but to the extent of his liability under a bond executed under Section 55 (4) when the judgment-debtor did not file the insolvency petition within a month. The learned Judge held, on the terms -of the bond before him, that the only liability of the surety was to produce the judgment-debtor before the Court and that he was entitled to be given an opportunity of producing the judgment-debtor in Court on a date fixed by it before his security could be realised. It may be that, in the present case also, the petitioner would be entitled to an opportunity of producing the judgment-debtor if the latter does not appear as required by the Court, before the security furnished can be realised. This is not, however, the question before me and the decision cited above has no application.

6. The civil revision petition fails and is dismissed.


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