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Sankunni Variar and anr. Vs. Vasudevan Nambudripad and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Judge
Reported inAIR1926Mad1005; 97Ind.Cas.787; (1926)51MLJ239
AppellantSankunni Variar and anr.
RespondentVasudevan Nambudripad and ors.
Cases ReferredRaj Raghubar Singh v. Jai Indra Bahadur Singh
Excerpt:
c.p.c. (act v of 1008), section 145 - surety--surely bond for production of attached moveables--power of court to enforce bond in execution--surety liable to pay owing to default, whether comes under section 145--inherent power of court. - .....of machinery and other things belonging to the judgment-debtor was attached and was proclaimed for sale. the sale was adjourned, and the appellants and two others executed a surety bond undertaking to produce the property when called for. this was on the 3rd of july, 1924. the sale was posted for 21st november, 1924, and was adjourned to 19th december, 1924, and then to 16th january, 1925, and on each occasion it was adjourned because the decree-holder granted time on receipt of certain sums from the judgment-debtor. the sale was again adjourned to 16th march, 1925, and the sureties failed to produce the property and consequently the sale could not take place. the decree-holder then put in a petition e.p. no. 297 of 1925 to enforce the liability of the sureties by a warrant of arrest......
Judgment:

William Watkins Phillips, J.

In this case some property consisting of machinery and other things belonging to the judgment-debtor was attached and was proclaimed for sale. The sale was adjourned, and the appellants and two others executed a surety bond undertaking to produce the property when called for. This was on the 3rd of July, 1924. The sale was posted for 21st November, 1924, and was adjourned to 19th December, 1924, and then to 16th January, 1925, and on each occasion it was adjourned because the decree-holder granted time on receipt of certain sums from the judgment-debtor. The sale was again adjourned to 16th March, 1925, and the sureties failed to produce the property and consequently the sale could not take place. The decree-holder then put in a petition E.P. No. 297 of 1925 to enforce the liability of the sureties by a warrant of arrest. The Subordinate Judge has found that the sureties have committed default and has ordered that if they do not produce the attached articles or their value as per the bond, a warrant of arrest will issue. Two of the sureties now appeal against this order and state that although they did not produce the property, it was available in the factory close to the Courthouse, and that, therefore, they should not be deemed to have committed default. It is also alleged that in July, 1925, an interim Receiver was appointed to take charge of the judgment-debtor's properties, as he had been declared an insolvent and that when the sureties applied to the Insolvency Court, that Court refused to allow them to remove the property. This latter contention is beside the point, because on 16th March, 1925, when the property was not produced, no question of insolvency had arisen, and the sureties were not prevented from producing the property. It does not appear that they even informed the officer conducting the sale that the properties were available close at hand, and even if the pressing machines in the tile factory could not be easily moved the rest of the property was easily transportable. The sureties had, therefore, no excuse for the non-production and must be deemed to have committed default and forfeited their bond on 16th March, 1925.

2. The next point which is the more important one, is whether the Subordinate Judge had power to proceed against the sureties in execution. The appellants rely on a case reported as Rajah of Venkatagiri v. Sura Krishna Reddi 60 Ind. Cas. 134: (1920) M.W.N. 784 in which it was held that the only remedy open to the decree-holder was to get the bond assigned by the Judge and to sue upon it. I have looked at the papers in this case and the facts are almost identical with the facts of the present case and if that case is to be followed this appeal must be allowed so far as execution is concerned. In another case of Konimareddi Subbareddiv. Kollipara Veerayya Tata 62 Ind. Cas. 410 Sadasiva Iyer, J., held the view that the bond could not be enforced in execution whereas Spencer, J., held the contrary view. The view of the latter Judge is also in accordance with the judgment of a Single Judge of the Allahabad High Court reports ed as Madho Prasad v. Pearey Lal 62 Ind. Cas 719. The respondent, however, relies chiefly on a decision of the Privy Council reported as Raj Raghubir Singh v. Jai Indra Bahadur Singh 55 Ind. Cas. 550: 22 Bom. L.R. 521. The facts in that case are Dot quite the same as those here, for under the surely bond there under consideration the sureties undertook no personal liability but offered immoveable property as security. It was held that Section 145 could have no application but nevertheless, their Lordships held that the security could be enforced by the Court making an order upon an application to which the sureties are parties. The reason given for this is as follows: 'It is suggested that they (viz., the sureties) 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.' They conclude by saying that it can be enforced by an order of Court to which the sureties are parties. This is certainly authority for the proposition that, although the case does not come within the terms of Section 145, the Court has the inherent power to enforce its bond without recourse to a suit.

3. In the present case, it is contended that Section 145 is applicable because the sureties had become liable under Clause (c) for the payment of any money under an order of the Court in any suit or in any proceeding consequent thereon. This contention must be negatived for the liability under Section 145 attaches only in the case of a person who is 'surety', for the payment of any money under an order of the Court and not a surety liable to pay owing to default. In thi3 case there was no order of the Court directing payment of any money by the judgment-debtor and consequently the sureties were not sureties for such payment. It is on this view of the question that the case of Rajah of Venkatagiri v. Sura Krishna Reddi 60 Ind. Cas. 134 : (1920) M.W.N. 784 was decided but that case was decided without any reference to the decision of the Privy Council referred to above, according to which it would appear that the Court has inherent power to enforce a security bond. It has always seemed to me anomalous that, when the Court has granted indulgence to the judgment-debtor upon terms, that Court should not be able to enforce those terms without recourse to a separate suit. If the security had not been furnished, the property would have remained in the custody of the Court and would have been available for sale at any moment. The sureties having undertaken to produce the property or in default to be liable for its value, they cannot evade that liability. It would be a very roundabout proceeding to compel either the Court or the decree-holder, both of whom have been prejudiced by the conduct of the sureties, to proceed by way of a separate suit. In accordance, therefore, with the principle laid down in Raj Raghubar Singh v. Jai Indra Bahadur Singh 55 Ind. Cas. 550 : 46 I.A. 228 I would hold that the security bond can be enforced by way of execution apart from the provisions of Section 145. The lower Court's order directing process to issue is, therefore, correct but in view of the circumstances of the case, the value of the property ordered to be produced in Court, viz., Rs. 11,061, appears to be excessive. The property is still available for sale in the hands of the Receiver in order to discharge the judgment-debtor's debts and, therefore, the loss to the other creditors is practically nil. The decree-holderhas, however, to suffer, because instead of realising the full amount of his decree at once he may be compelled to receive only a proportionate share of the assets of the judgment-debtor, who is now an insolvent. He has, therefore, been prejudiced to that extent. Consequently, the amount which should be produced by the sureties is the decree amount together with interest up to date of production.

4. The lower Court's order will, therefore, be modified by ordering the sureties to produce the property or Rs. 3,007-2-8 together with interest at 6 per cent, from 16th April, 1925 to the date of production. Time one month from this date.

5. As the appellants have substantially failed on the main question, they must pay the first respondent's costs in this appeal.

Madhavan Nair, J.

6. I agree and have nothing to add.


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