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Jiban Krishna Mukherjee and anr. Vs. New Beerbhum Coal Co. Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberAppeal No. 188 of 1958
Judge
Reported inAIR1965Cal242
ActsCode of Civil Procedure (CPC) , 1908 - Section 145; ;Evidence Act, 1872 - Section 95
AppellantJiban Krishna Mukherjee and anr.
RespondentNew Beerbhum Coal Co. Ltd. and anr.
Appellant AdvocateB.C. Das, Adv.
Respondent AdvocateS.K. Gupta, Adv.
DispositionApplication dismissed
Cases ReferredElaya Pillai v. Muhammad Ibrahim Sahib
Excerpt:
- .....the judgment dated the 29th april 1959 was dismissed and the appellant was directed to pay the costs--costs of the application for special leave and of the appeal--and the interim order was vacated. thereafter the receiver in pursuance of the agreement dated the 10th march 1958 sold and delivered possession of the charged properties to the purchaser being respondent no. 2 and obtained the sum of rupees 30,000/- which was the price payable in respect of the properties sold. on the 16th november 1959 the petitioners nos. 1 and 2 filed a suit in the court of the civil judge, varanasi, being suit no. 89 of 1959 for a permanent injunction restraining the purchaser from dismantling or removing any part of the said plant and machinery from the said factory and on the same day obtained an.....
Judgment:

Bose, C.J.

1. This is an application for leave being granted to the petitioner No. 1 Jiban Krishna Mukherjee, to withdraw a cash deposit for Rupees 15,000/- lying with the learned Registrar, Original Side, and for an order releasing a surety bond for Rs. 30,000/- executed by the petitioners Nos. 1 and 2 and National Insurance Co. Ltd. dated the 16th October 1958 and for an order on the Registrar to refund the said sum of Rs. 15,000/- and to cancel and release the said bond. The application also seeks suitable direction being given, if necessary, for the payment of or securing the taxed costs of the decree-holder-respondent.

2. The facts giving rise to this application are as follows: On the 5th December 1955 the plaintiff-respondent New Beerbhum Coal Co. Ltd. obtained a consent decree in suit No. 1024 of 1953 of this Court for Rs. 18,497-15-0 with interest till realisation against the defendant Benares Ice Factory Ltd., the petitioner No. 2. The said suit was however dismissed as against the petitioner No. 1, Jiban Krishna Mukherjee. The consent decree Inter alia directed payment of the decretal amount in six equal annual instalments and provided that in default of payment of any one instalment, the whole of the balance outstanding on the date of such default would at once become due and payable and the decree-holder would be at liberty to execute the said decree. It was further provided in the said decree that the decretal amount would form a first charge upon certain plants and machinery of the Benares Ice Factory Ltd., the judgment-debtor. As the Benares Ice Factory Ltd. made default in payment of the instalments, the decree-holder applied for execution of the decree on the 10th April 1956 and on the 17th May 1956 an interim order was passed by this Court in execution proceedings appointing Mr. A. K. Sen (Junior), Barrister-at-law, as the Receiver of the charged properties. On the 30th May 1956 the application for execution was finally disposed of and the Receiver was inter alia authorised to sell the charged properties by private treaty or public auction and the defendant company was ordered to pay the costs. On the 5th September 1966 writ was filed by Benares Ice Factory Ltd. and one Sm. Monorama Debi being suit No. 2594 of 1956 challenging the consent decree dated the 15th December 1955 passed in suit No. 1024 of 1953 on the ground inter alia that it was a collusive decree. In December 1956 the Receiver Mr. Sen took possession of the factory of the judgment-debtor in which the charged properties were located. On the 13th August 1957 the judgment-debtor paid a sum of Rs. 3,500/- to the Receiver in part payment of the decretal dues. On the 10th March 1958 the Receiver entered into an agreement with one Sukhlal Amarchand Vadnagra who is respondent No. 2 in this application, for sale of the charged properties at a sum of Rs. 30,000/- and on the 30th March 1958 the decree-holder made an application for confirmation of the said agreement for sale dated the 10th March 1958. On the 9th May 1958 an order was made by this Court on the said application of the decree-bolder directing inter alia that the defendants in the said suit No. 1024 of 1953 would pay Rs. 3,000/-within three weeks from the date of the order to the Attorneys of the plaintiff on account of its claim and also the balance of the plaintiffs dues under the said decree within ten weeks from the date of the order and in the event of such payment being made the agreement for sale would not be confirmed but in the event of the judgment-debtor defaulting in making payments in terms of the said order, the agreement for sale would stand confirmed. The order also directed payment of costs by the defendant. On the 30th May, 1958 the judgment-debtor paid a sum of Rs. 3,000/- to the solicitor for the decree-holder in terms of the order dated the 9th May 1958 bat the judgment-debtor failed to make any other payment in terms of the said order. Thereafter the judgment-debtor made an application inter alia for extension of the time for payment of the balance of the decretal dues and for cancellation of the agreement for sale. On the 29th July 1958 the said application was dismissed with costs. On the 20th August 1958 the judgment-debtor took out a notice of motion praying for leave to deposit the whole of the balance of the decretal dues in full satisfaction of the consent decree and also asked that the Receiver might be restrained from receiving any money in terms of the agreement for sale dated the 10th March 1958. On the 4th September 1958 the said application was dismissed with costs but the delivery of possession of the charged properties under the agreement for sale to the purchaser was stayed for a week from the date of the order. On the 11th September 1958 the judgment-debtor filed an appeal against the order dated the 4th September 1958 which was numbered as Appeal No- 186 of 1958 and on the same day the judgment-debtor made an application for interim stay of delivery of possession of the charged properties pending hearing of the application. The appeal Court granted interim stay on a condition of the petitioners funishing security for the sum of Rupees15,000/- in course of the day. Pursuant to the said order the petitioner No. 1 deposited the sum of Rs. 15,000/- in cash with the Registrar, Original Side, on that very day. This application for stay came up for final hearing on the 16th September 1958 and the Appeal Court made the ad interim order absolute and stayed the delivery of possession of the charged properties on condition of the appellant's furnishing a further security in the sum of Rs. 30,000/- either in cash or by a bank guarantee from one of the scheduled banks or a Bond executed by one of the guarantee-societies in the approved list of this Court to the satisfaction of the Registrar, Original Side, within one month from date. On the 16th October 1958 a Bond was executed by the petitioners Nos. 1 and 2 and National Insurance Co. Ltd. of 7 Council House Street, Calcutta for Rs. 30,000/-. After reciting the order of the Court dated the 16th September 1958 of furnishing the further security of Rs. 30,000/- and the fact that the interim order made on the 11th September 1958 was made absolute and the execution of the decree was stayed, the Bond providedas follows:

'Now the conditions of the above written Bond or obligation are such that if the above bonded defendants Nos. 1 and 2 deposit in Court the sum of Rs. 30,000/- only and shall give immediate notice to the said Court or if the company shall become insolvent or go into liquidation, then and in such ease the above written Bond or obligation shall become void and of no effect, otherwise the same shall, subject to the provisions hereinafter contained, be and remain in full and virtue provided always that if the defendants Nos. 1 and 2 shall not for every successive term of twelve calendar months to be computed from the 14th day of October 1958 and within fifteen days after the 14th October in each and every year pay or caused to be paid at the office of the company the annual premium, viz., the sum of Rs. 300/- only, then the company shall at any time after such default be at liberty to move the Judge in Chamber on summons under Rule 62 Chapter XXXVII of the Rules of the said Court to be relieved from all further liabilities as such sureties as aforesaid upon such terms as the Court may direct provided always that nothing herein contained shall relieve the company from any liability in respect of any loss or damage occasioned by any act or default of the defendants Nos. 1 and 2 previous to such cessor or determination of liability.

Sd/- Jiban Krishna Mukherjee.Signed, sealed and Sd/- Benares Ice Factory delivered at Calcutta Ltd. By the pen ofin the presence of-- Gopalraj Mukherjee itsSecretary' On the 29th April 1959 the Appeal No. 188 was heard and dismissed with costs and the stay order was vacated. On the 4th May 1959 the petitioners Nos. 1 and 2 made an application for leave to appeal to the Supreme Court and obtained an interim injunction restraining the purchaser from dismantling and/or removing the said plant and machinery. On the 18th May 1959 the said application for leave to appeal to the Supreme Court was dismissed and the order for interim injunction was vacated. On the 27th May 1959 upon an application for Special Leave made before the Supreme CourtSpecial Leave was granted and there was also an order for injunction made restraining the purchaser from dismantling or removing the said plant and machinery. On the 10th November 1959 the appeal to the Supreme Court against the judgment dated the 29th April 1959 was dismissed and the appellant was directed to pay the costs--costs of the application for special Leave and of the appeal--and the interim order was vacated. Thereafter the Receiver in pursuance of the agreement dated the 10th March 1958 sold and delivered possession of the charged properties to the purchaser being respondent No. 2 and obtained the sum of Rupees 30,000/- which was the price payable in Respect of the properties sold. On the 16th November 1959 the petitioners Nos. 1 and 2 filed a suit in the Court of the Civil Judge, Varanasi, being suit No. 89 of 1959 for a permanent injunction restraining the purchaser from dismantling or removing any part of the said plant and machinery from the said factory and on the same day obtained an interim injunction. In this suit the consent decree was challenged as being without jurisdiction. On or about the 17th November 1959 an order was obtained from the Varanasi Court appointing a pleader as Commissioner and for dispossession of the Receiver. Thereafter certain steps were taken to oust the Receiver from possession which led to the purchaser making an application for committal of some of the Directors of the Benares Ice Factory Ltd. for contempt and the ultimate withdrawal of the Benares suit on the 15th February 1960 filed by the petitioners Nos. 1 and 2. On the 15th February 1960 a suit was filed in this Court being suit No. 198 of 1960 by and on behalf of the petitioners No.. 1 and 2 against the purchaser for declaring the said sale void and for permanent injunction restraining the purchaser from dismantling and removing the said plant and machinery and an interim injunction was obtained in this suit. On the 18th May 1960 this suit was dismissed with costs and the interim order was vacated. Thereupon the petitioners Nos. 5 and 2 preferred an appeal being appeal No. 84 of 1960 and again obtained an interim injunction restraining the purchaser from dismantling and removing any part of the plant and machinery. On the 21st June 1960 this application was dismissed with costs and the interim order was vacated. On or about the 16th December 1961 the respondent No. 2, the purchaser, filed a suit in this Court being suit No. 1980 of 1961 against Banares Ice Factory Ltd. (defendant No. 1.) Jiban Krishna Mukherjee (defendant No. 3) and New Beerbhum Coal Co. Ltd. (defendant No. 3) for it decree for Rs. 30,000/- for damages against defendant Nos. 1 and 2 and alternatively for an enquiry into the damages and for a declaration that the purchaser (respondent No. 2) along with New Beerbhum Coal Co. Ltd. has a lien and/or first charge on the security deposit of Rs. 15,000/-and in respect of the surety Bond for Rs. 30,000/-and for a permanent injunction restraining the defendants Nos. 1 and 2 in that suit from withdrawing the said sum of Rs. 15,000/- or getting the said surety Bond for Rs. 30,000/- discharged and for certain incidental reliefs. Prior to that on the 9th August 1961 the present application for leave to withdraw the sum of Rs. 15,000/- and for release or discharge of surety Bond for Rs. 30,000/-was made before this Court. On the 37th August 1961 an order was made by this Court directing the Receiver to pay the sum of Rs. 27,000/- being the balance of the sale proceeds of the charged properties in his hands to the decree-holder New Beerbhum Coal Co. Ltd. and pursuant to the said order the said sum was paid to the decree-holder. After this application came up for hearing before this Court, the hearing was adjourned from time to time and on the 21st February 1963 an order of attachment had been made by this Court at the instance of Messrs. Leslie and Khettry, the solicitors for the purchaser, of the said sum of Rs. 15,000/-lying as security deposit, on account of costs of the purchaser incurred in the said suit No. 1024 of 1953 and the Appeal No. 188 of 1958 and an attachment had been levied accordingly. Similarly another attachment had been levied on the said security deposit of Rs. 15,000/- for Rs. 3,8637- being costs of Leslie and Khetry in suit No. 198 of 1960 and Appeal No. 84 of 1960 pursuant to an order made on the 27th March 1963. Then again pursuant to an order of attachment obtained by Sandersons and Morgans, Solicitors of New Beerbhum Coal Co. Ltd. in respect of costs, to the extent of Rupees 7,935.48 nP. an attachment had also been levied on the said security deposit of Rs. 15,000/- and on the 8th May 1963 another attachment had been levied for Rs. 3,027.95 nP. in respect of costs of New Beerbhum Coal Co. Ltd. incurred in suit No. 198 of 1960 and in Appeal No. 84 of 1960 pursuant to an order of this Court made for this purpose. In respect of this last order of attachment an appeal has been preferred being Appeal No. 298 of 1963 and it is still pending disposal. In respect of the other three orders of attachment no appeal has been preferred.

3. In the light of these facts the question that arises for determination is whether the petitioners are entitled to withdraw the said sum of Rupees 15,000/- or to have the surety of the sum of Rupees 15,000/- (sic) is concerned, the position appears to be clear that this sum has been attached under four orders of this Court as already mentioned and the attachments are subsisting. The total sum for which the four attachments have been made exceeds the sum of Rs. 15,000/- which is lying as security deposit and it appears to us that pending such attachment, no question can possibly arise for granting any leave in Favour of the petitioners for withdrawal of the sum of Rs. 15,000/-. So our view is that the petitioners are not entitled to any relief so far as the claim for Rs. 15,000/- is concerned. As regards the surety Bond for Rs. 30,000/- the contention of the petitioners has been that the amount secured by the Bond is not answerable for the claim for costs of the decree-holder and the purchaser and so an order should be made for discharge or release of the Bond. This contention Is disputed by the counsel appearing for the decree-holder and the purchaser and it is submitted on their behalf that not only Is the Bond answerable for the costs incurred by the decree-holder and the purchaser in the various proceedings already referred to, but it is also answerable for the damages claimed by the purchaser on account of delay in delivery of the possession of the charged properties. Our attention has been drawn to a large number of authorities cited by the parties Raj Raghubar Singh v. Jai IndraBahadur Singh, 46 lad App 228: (AIR 1919 PC 55); Sundarlal v. Khazanamal, AIR 1929 Lah 769(2); In re Horst Guderian, : AIR1931Cal474 Sahu Ram Kishore v. Chiranjilal, AIR 1938 All 68; Paramasivam Pillai v. Ramaswami Chettiar, AIR 1939 Mad 152; Nedungadi Bank Ltd. v. Doraikannu Ammal, AIR 1941 Mad 282; Pannaji Devichand v. Basappa Virappa, AIR 1943 Bom 243; Bharat Saw Mill Co. Ltd. v. Tarapada Sur, ILR (1951) 1 Cal 341 and Kunjamoyee Dassi v. Akshoy Kumar Das, : AIR1961Cal43 but it is not necessary to deal with these cases at any length.

4. It appears to be a well-settled principle of law that a surety Bond is to be construed in the light of the order directing the security to be given, if there is any doubt or ambiguity as to the true construction or meaning of the Bond. In the case of Raghunandan Prosad Singh v. Kirtyanand Singh, Lord Tomlin in delivering the judgment of the Judicial Committee observed at p. 132:

' 'The Bond must be considered in the light of the order directing the security to be given.' This decision of the Privy Council has been followed by this Court in the case of Mohendranath v. Satish Chandra, : AIR1934Cal569 . In this Calcutta case it has been laid down that the rule that a security Bond must be strictly construed according to its own terms is certainly true where there is no ambiguity in the terms but where there is a contradiction in terms, Section 95 of the Evidence Act allows a reference to antecedent circumstances. Thus where there is any doubt about the true construction of the security Bond, the Bond must bo considered In the light of the order directing the security to be given.' 5. Reiterating and explaining this principle laid down by the Privy Council in other cases, the Madras High Court in the case of Elaya Pillai v. Muhammad Ibrahim Sahib, AIR 1948 Mad 302 has observed at p. 305:

'It is true that a security Bond should be strictly construed according to its terms but it seems to us that the real meaning and effect of this rule are very often misunderstood. In our opinion, the true position is this: If it is reasonably clear that the contingency in which the Bond is sought to be enforced would not fall within the language of the condition it is not permissible to override that language in the light of what the parties intended if they did not succeed in expressing that intention in suitable language. If, on the other hand, on a fair reading of the Bond in the light of the surrounding circumstances--the most important of such circumstances being the order pursuant to which the security is given--the Court considers that the contingency in which the security is sought to be availed of falls reasonably within the language of the condition which is sufficiently wide to comprehend it, there is no rule compelling the Court to adopt the stricter of two constructions to both of which the language may be susceptible.' 6. It is therefore necessary to advert to the language of the surety Bond in this case and to interpret it in the light of the surrounding circumstances under which the Bond was given, specially as the Bond itself does not expressly state or embody the purpose for which it was given. Now itis clear from the order dated the 11th September 1958 that the purpose for which the security for Rs. 15,000/- was ordered was to secure the interest of the decree-holder and the purchaser in so far as it was affected by the granting of the stay of delivery of possession of the charged properties. Then by the order of the 16th September 1958 the stay order of llth September 1958 was continued upon the petitioner (judgment-debtor) furnishing security for a further sum of Rs. 30,000/- either in cash or bank guarantee or by a Bond executed by one of the approved guarantee societies. The wording of the Bond, particularly the portion 'provided always that nothing herein contained shall relieve the company from any liability in respect of any loss or damage occasioned by any act or default of the defendants Nos. 1 and 2 previous to such cessor or such liability,' indicates that if by reason of any act or omission of the judgment-debtor the charged property was damaged or it was lost, the Bond will cover liability for such damage or loss. So also if there was any deterioration in the condition of the charged property by reason of delay in delivery thereof, any liability arising from such deterioration would also be covered by the Bond. It seems clear that in these contingencies, the provisions of the Bond will be attracted and the amount secured by the Bond will be answerable. Whether the amount secured by the Bond is answerable for the costs incurred by the purchaser or the decree-holder in the various proceedings already referred to, it is not necessary for us to express any opinion at this stage. It appears that on or about 16th December 1961 a suit has been filed claiming damages alleged to have resulted from the stay or delay in delivery of possession of the properties. One of the allegations in the plaint in suit No. 1980 of 1961 in which damages have been claimed is as follows:

'Furthermore, on account of the said prohibitory orders the dismantling of the said plant and machinery was delayed by about two years, as a result whereof the condition of the said plant and machinery became deteriorated and the same became rusty and the value of the said plant and machinery was considerably diminished and/or was lowered during the said period.' (paragraph 28 of the plaint). 7. Prior to this Suit No. 1980 of 1961 this claim for damages was also asserted in paragraph 10 of the affidavit of Prafulla Kumar Verma affirmed on 11th September 1961 and filed on behalf of the purchaser in this application.

8. So until the claim of the purchaser is adjudicated upon, there cannot be any question of the petitioner's obtaining any order for release or discharge of the surety Bond. In our view the applicants are not entitled at this stage to any of the relief claimed either with regard to the security deposit of Rs. 15,000/- or with regard to the surety Bond dated 14/16th October 1958.

9. In the result, this application fails and it is accordingly dismissed with costs to the appearing respondents.

Mitter, J.

10. I agree.


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