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Jia Bai Vs. Joharmull Bothra and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1932Cal858
AppellantJia Bai
RespondentJoharmull Bothra and ors.
Cases ReferredAppuni Nair v. Isack Mackdan A.I.R.
- .....a consent decree and therefore it is not such a decree which is contemplated by the terms of the surety bond.16. there is another aspect of this decree which before i proceed to the next step in this case deserves to be mentioned. there being some doubt whether the plaintiff was a minor or not the learned judge 'prevented her from taking the money out of court if it should be paid and required her to satisfy the court that she was of age before she could take out execution. it turns out that matter has not been inquired into. it is not contended that the plaintiff was not of age at the date she brought her suit. in these circumstances i go to the authorities to see whether there is any ground for what appears to me to be a very inconvenient doctrine that when what i have described.....

Rankin, C.J.

1. In this case the plaintiff applied for execution upon a tabular statement in respect of two sums of money--first of all, in respect of a sum of Rs. 2,000 out of Rs. 2,500 allowed to her by the decree of Buckland, J., dated 23rd May 1929, in the suit; between the parties; and secondly, for Rs. 534-11-6-- the amount of costs awarded to her upon an application by her that the bond which the respondent Joharmull Bothra had given as surety should be assigned to her (plaintiff) for enforcement. The learned Judge has not in any way dealt with the question of the sum of Rupees 534-11-6. He has dealt in his judgment only with the question of Rs. 2,500.

2. The position is this: The plaintiff, one Jia Bai, a lady who claims to have recently attained majority brought a suit being Suit No. 1688 of 1927 in this High Court against two defendant firms. Her case was that during her minority her father had deposited certain sums of money on her account at 9 per cent par annum interest with yearly rests with the firm of Radha Kissen-Gopi Kissen, that this firm came to an end in 1923 but one of the partners continued the business under the name of Radha Kissen-Kedarnath and that the deposit belonging to the plaintiff came to the hands of Radha Kissen-Kedarnath who continued to act as depositees, accountable to the plaintiff on the same terms as the previous firm had been. The defendant firm Radha Kissen-Kedarnath pleaded, first of all that the plaintiff was not of age at the time she brought her suit and that the suit was therefore incompetently brought. They agreed that the firm of Radha Kissen-Gopi Kissen had ceased to point in 1923, They agreed that moneys and been deposited with that firm as alleged by the plaintiff. They further pleaded that upon that firm ceasing to entry on the business one of the partners started a new firm--being the firm of Radha Kissen-Kedarnath on whose behalf the written statement had been filed. They further pleaded that at that time a sum of Rs. 1,251-10.3 was the total sum due to the plaintiff for principal AND interest and that sum was with the knowledge and consent of the plaintiff's father transferred to them and continued to carry interest at the rate of 3 per cent. So that subject to any little adjustment there might be about the question of figure, the plaintiff's case to substance was really confessed by the written statement, There was a further dispute as to whether the plaintiff was entitled to interest at 12 per cent. as the purported to claim by reason of a notice given under the Interest Act. The defendants further pleaded that they were all along ready and willing to pay the amount due to the plaintiff if they could get a good discharge but there was some difficulty in getting a discharge as there was no guardian for the plaintiff. Finally, they said that they did not admit that the amount due was as much as Rs. 2,076, the amount claimed.

3. The written statement was filed in December 1927, but before that time, when the pleadings closed, an application had been made to this Court under Ch. 13-A of the rules for summary judgment and the defendant firm had been given conditional leave to defend upon their giving security to the satisfaction of the Registrar of this Court in the sum of Rs. 2,000. On that occasion which was in September 1927, the present respondent, Joharmull Bothra came forward as surety and the form of the bond he entered into was this:

The condition of the above written bond or obligation is such that if the said Radha Kissen Mohata shall pay and satisfy the claim for principal, interest and costs under decree that may be passed in the said Suit No, 1688 of 1927 to the extent of Rs. 2,000, or if the said No. 1688 of 1927 shall be dismissed, then this bond or obligation shall be void and of no effect; otherwise, the same shall remain in full force and virtue.

4. That bond had been given in the ordinary form in use in this Court before the written statement was filed. The case came on for hearing on 23rd of May 1929, The plaintiff's counsel opened his case and Radha Kissen-Kedarnath by their Counsel Mr. Hazara, according to the minutes offered to put in the money with simple interest at 9 per cent. that is, Rs. 1,738-3-1 up to the data of suit and filed an affidavit. The Court thereupon delivered judgment making a decree for Rs. 2,500 inclusive of costs against defendant 1. The learned Judge's judgment is before us. He says that

the firm of Radha Kissen Kedarnath state that they are prepared to pay the amount if they can get a good discharge.

5. That, as a matter of fact, had in substance been stated in the written statement from the beginning:

They have no desire to go to the trouble and expense of contesting this suit simply upon the ground as to whether or not the plaintiff has now attained her majority.

6. The learned Judge says:

That attitude is not unreasonable. They therefore are prepared to consent to a decree for Rs. 2,500 which will include all costs;

and he says:

There will be judgment accordingly against Radha Kissen-Kedarnath... Radha Kissen-Kedarnath by their counsel say that they are prepared to pay the money into Court or deposit it with the Registrar which I give them liberty to do.

7. Then the learned Judge gives direction that it is not to be taken out until it is shown that the plaintiff is of age and he says that, if the defendants do not pay the money into Court, no execution will issue without further orders of the Court because it may be necessary to ascertain whether the plaintiff is major. The form of the decree recites:

The defendant firm Radha Kissen-Kedarnath offering to pay into Court the money standing to the credit of the plaintiff in the plaint in this suit mentioned with simple interest thereon at the rate of 9 per cent. per annum aggregating the sum of Rs. 1,738-3-1, It is ordered and decreed that the said defendant firm do pay to the plaintiff the sum of Rs. 2,500 in respect of her claim and costs.

8. It was further ordered that the defendant firm was at liberty to pay the money into Court and that the plaintiff was not to withdraw the same until the Registrar was satisfied that the plaintiff had attained majority. It was further ordered that, in the event of the defendants failing to pay the sum, the plaintiff may apply for leave to execute the decree against the defendant firm.

9. In these circumstances, it turns out that, although the defendants had offered to pay the money into Court, they have not paid anything into Court. Accordingly, the plaintiff brought a motion before the learned Judge for leave to have the bond executed in favour of the Registrar assigned to her in order that she might enforce it. That was the occasion on which the present respondent, Joharmull Bothra was brought before the learned Judge upon the motion in the action. That is the origin of the sum of Rs. 534 which the plaintiff now asks execution for. In addition to that the plaintiff asks under Section 145, Civil P. C., that the decree for the sum of Rs. 2,500 be executed as to Rs. 2,000 against the respondent Joharmull Bothra.

10. The first objection taken by the defendant Joharmull Bothra before the learned Judge has not been mentioned in this Court and was very properly repelled. The suggestion was that because the suit had at one time been dismissed for default and was then restored, the bond was of no effect. The learned Judge has very properly held that the bond has reference to the ultimate issue of the suit.

11. The next point taken before the learned Judge was that what took place on 23rd May 1929 and the order and decree made there was really a consent decree,, that it was a bargain made behind the back of the surety between the plaintiff and the defendants and that, therefore, the surety was not bound to implement his bond. That argument has in the end prevailed with the learned Judge, although an opinion had been previously expressed by Lort-Williams, J., to the contrary effect; and it is necessary for us to consider the authorities and to say whether we agree with the view taken by the learned Judge or not. It appears that there was in this Court a previous case National Goal Co. Ltd. v. Kshitish Bose & Co. A.I.R. 1926 Cal. 818 where the decision was given by Buckland, J., in favour of the surety. It appears further that the case upon which most of the Indian cases have centred is the case of Tatum v. Evans [1885] 54 L. T. 336 a decision on an action on a surety's bond tried before Denman, J. It seems to me that the plaintiff and the defendants in the present case were at arm's length all the time. It is true that the defendants by their written statement admitted that a certain amount of money had been received and was being held by them for the plaintiff. They disputed the figure, they disputed the claim for interest and they disputed the competency of the suit in the absence of a next friend, but the substance of the plaintiff's case was not disputed. It cannot be that the plaintiff's right to have recourse to the surety depends on whether the defendants dispute something or not. In these circumstances, when learned Counsel for these defendants was before the learned Judge, he thought it not to be in the interest of his clients to raise the question as to whether the lady was of age or not. If she was not of age, it could only mean that the defendants would be liable when the suit was reconstituted. He did not think fit to stand upon that footing. The plaintiff's right to recover upon the bond cannot possibly be defeated by that.

12. Then comes the other question. The parties were in dispute about the figure. The defendants said that Rs 1,700 was all that was really due to the plaintiff including interest. That is the effect of their written statement. Their learned Counsel mentioned that figure and said that they were prepared to bring that figure into Court as the amount due up to the date of the suit and on that footing the defendants would clearly be liable for some costs, The learned Judge's judgment shows that learned Counsel in these circumstances was prepared to say that he would consent to a decree for Rs. 2,500 to include costs.

13. Then on that basis, we have to consider the question: What was the plaintiff to do? Supposing she was desirous of not forfeiting the valuable right she had against this surety on the terms of the bond, what was the plaintiff to do? A conceivable view to take is chat the plaintiff might say:

Well I don't expect to get any more but I will insist on proving my case although the defendant's counsel is willing to admit it.

14. That does not seem to be a very reasonable suggestion. Another possible suggestion would be to say:

No. Rs. 2,500, to include costs will really content me but in order to preserve my right against the surety, I am going to insist upon getting more if I can. I am not going to have it said that I am content to accept Rs. 2,500 including costs. I will ask leave to fight to get a little more.

15. Clearly that suggestion too cannot be entertained. The position was that the defendant's counsel was admitting that they owed to the plaintiff a sum of money and judgment would go against them for that sum of money with costs and the two together would be not less than Rs. 2,500. The plaintiff may have had a right to something more but she lid not press for anything more. In these circumstances, not by any secret or fraudulent or collusive bargain between the parties but the parties by their respective counsel making their position clear before the Court at the time when they were at arms length the learned Judge gives judgment. He does not give it formally as a consent matter but he recites the offer made by the defendants. It is capable of inference that the plaintiff did not press for any more and he gives (judgment in accordance with that offer. The question is whether it can be con-tended so far that that is a consent decree and therefore it is not such a decree which is contemplated by the terms of the surety bond.

16. There is another aspect of this decree which before I proceed to the next step in this case deserves to be mentioned. There being some doubt whether the plaintiff was a minor or not the learned Judge 'prevented her from taking the money out of Court if it should be paid and required her to satisfy the Court that she was of age before she could take out execution. It turns out that matter has not been inquired into. It is not contended that the plaintiff was not of age at the date she brought her suit. In these circumstances I go to the authorities to see whether there is any ground for what appears to me to be a very inconvenient doctrine that when what I have described happens in a suit the surety for the defendants who if they had not given security would have had a judgment against them is discharged from all obligations. It is quite clear that there is nothing in the terms of this bond upon which it is possible to hang any argument that a consent decree or a decree that is not resisted is not within the terms of the bond. It says if the defendants pay what should be the principal, interest and costs under any decree that may be passed or if the suit is dismissed then in either of these events the bond will come to an end, otherwise the surety is to be bound. We have to see therefore if this bond can be construed upon any principle which would be of avail to the surety.

17. The doctrine that where a person is a surety for the obligation of another person under a contract any variation in the contract will discharge the surety is plain enough. In the same way if the creditor gives time to the principal debtor that is a matter which may affect the surety and the surety's obligation may be discharged in such a case as that. We are dealing here with a person who has given security for whatever may be recoverable under a decree to be in the future by the Court. The ease Tatum v. Evans [1885] 54 L. T. 336 was, it appears me, very correctly decided but it was a case of very exceptional character. It would appear that the defendant borrowed some money from the plaintiff upon a mortgage and the plaintiff brought two suits one for 75 alleged to be due for default in payment of instalments of principal and interest and the other for the whole balance of the mortgage-money alleged to be outstanding on the mortgage. A summons was taken out in the first suit only under Order 14 for summary judgment and Willis, J., ordered that leave to defend should only be given in that suit on 75 being paid into Court or security being given for it within a fortnight and that as regards the second suit the defendant was to have unconditional leave to defend. He ordered that the two actions should be consolidated and that if the security was not given the plaintiff was to be at liberty to sign judgment in the first action only. The sureties in that case however entered into a bond the form of which is set out and which is very different from the form in the case which we have before us also, very different from the form which appears now to be in use as sat out in Chitty's Forms p. 130 of the last edition. The form of the bond was that if the defendant do pay to the plaintiff the sum of 75 or such sum (not exceeding that amount) as the Court shall think fit to award 'to the said George Tatum. in the above consolidated actions.' That being so the consolidated actions came on for hearing before Grove, J., and were settled by an arrangement which contained a good many terms. There was no question as to whether 75 was shown to be due for default in payment of instalment of principal and interest. No such question was agitated; no such question was decided and there was no judgment upon any such question at any time passed.

18. It was arranged by consent that judgment should be entered for the plaintiff in the consolidated actions for 750 to include costs. It was to be payable as to the 400 by instalments of 25 a month and as to the balance by instalments of 50 a month. The defendant was to reconvey all his interest in the premises to the plaintiff forthwith. No further claims on either side with reference to matters in this action were to be allowed. The first payment by the defendant was to be taken in discharge of sureties but the sureties were not to be fully discharged until payment of 75. In these circumstances Denman. J., held that the bond which had been entered into by the sureties did not contemplate any such arrangement as was herein arranged by consent. Whether the defendant was ever liable to pay in 75 or not was special matter which does not seem to have been specially dealt with and the learned Judge came to the conclusion in that case that the sum of 750 in the settlement was not an amount which the Court 'thought fit to award' within the meaning of the bond. It was the result of an elaborate arrangement about a great many different matters. In the course of his judgment however the learned Judge Denman, J., very clearly disclaimed any intention to hold the broad proposition that a surety for the liability of defendant was not liable upon a consent decree. It was pointed out in that case that the sureties relied on a representation that the action would be defended and not compromised. I cannot think that that was an element which had any bearing upon the plaintiff's right under the bond. The learned Judge said:

I do not say that in no case where a person gives security as surety under Order 14, he is liable where a judgment is submitted to by consent, but I am of opinion that the compromise in this case is a thing so very different from a judgment in invitum pronounced by the Court after some inquiry into the facts as to release a surety, who was not consulted about it. I do not think that in what took place, looking at the substance of the thing there was within the meaning of the bond, an awarding of such sum as the Court should think fit but a complicated arrangement about which the surety had a right to be consulted.

and so forth. Now, that case was followed in this Court by the case already refereed to, National Goal Go, Ltd. v. Kshitish Bose & Co. A.I.R. 1926 Cal. 818 where the defendant had under Order 37, Civil P. C, been ordered as a condition for leave to defend to give security for Rs. 16,000. A decree by consent was made without the knowledge and consent of the surety whereby it was agreed that the defendant firm should pay Rs. 4,700 with costs and interest--Es, 1,500 by the 7th May and the balance by monthly instalments of rupees 500 until realization and the parties also provided that the surety was to continue as guarantee for the performance of the conditions of that decree, although the surety was no party to bargain. The learned Judge decided that case by referring to the case of Tatum v. Evans [1885] 54 L. T. 336 and saying that:

This case is very much to the point and it seems to me that the application must fail unless ha can show that the surety either consented to the order or that he satisfied it or waived any rights that he might have.

19. I do not clearly gather from this passage what view the learned Judge took of the effect of the decision in Tatum's case [1885] 54 L. T. 336. I would say upon this case that if it is to be contended that the surety is discharged from his bond in any case where there is a consent decree proving for postponed payment or payment by instalments, then that is a proposition to which as at present advised, I am not prepared to assent. The case before us does not raise that exact question and therefore I am content merely to say that I see some difficulty in holding that a provision for instalments releases the surety in a case of consent. In this appeal we have been referred to the decision in Ahmed Karim v. Maruti Ravji A.I.R. 1931 Bom. 56. In that case a Division Bench of the Bombay High Court in a judgment with which I fully agree as I do with the judgment of Lort-Williams, J., in the present case examined the terms of the surety bond which said that in case the defendant failed to pay the decree:

I bind myself to pay any sum up to Rs. 3,000 according to the orders of the Court.

20. The Bombay High Court held that the bond in that form was just as applicable to a consent decree as to any other. Of course, it is quite obvious that if there is anything fraudulent about the consent or if the arrangement between the parties is a mere fraud the surety is entitled to repudiate his obligation. Assuming that the consent decree is not in any wise fraudulent, it is just as much within the terms of such a bond as any other decree and indeed it strikes one as rather surprising that the ordinary form of a bond in a case under Order 14 should not be supposed to cover the case of a consent decree. No doubt it is possible for the defendants to collude with the plaintiff to the disadvantage of the surety, but in the ordinary way, the fact that the defendants admit their liability is a better proof that they are 'liable than any proof that the plaintiff can give; and it strikes me that any practice to the effect that by accepting any admission of liability made by the defendants before the learned Judge, a plaintiff would deprive himself of the right to security which he has obtained would be a very bad and inconvenient practice leading to much injustice.

21. In these circumstances I am of opinion that the learned Judge ought to have directed execution to issue against the surety for the amount of his bond. The fact that execution of the decree was stayed is not a matter which, in any conceivable way, could prejudice the surety. This is not a case where there was a sum of money payable by instalments, but it is merely a case where the defendants are admitting liability and asking to pay the money into Court. The fact that the enforcement of the decree was postponed has no effect whatever to the prejudice of the surety.

22. The only question which remains is with reference to the costs of Rs. 534 which amount was included in the tabular statement. It is quite true that those costs were awarded against the surety on the hearing of a motion in the suit. It was a motion that the bond might be assigned by the Registrar to the plaintiff. The other claim in the tabular statement is a claim under Section 145, Civil P. C. whereby the decree against the defendants is made to be executed against the surety and the question is whether there is anything which would prevent the plaintiff from putting in these two claims in one tabular statement. I see no reason for holding that these two claims which after all have reference to the same thing should not be included in one tabular statement. I imagine that it would be a serious grievance to execution debtors and creditors alike if we were to hold that every order should] have a separate execution proceeding and that, even if they are related, it is impossible to have two claims in one execution proceeding. Unless there were very good authority for such a proposition, I should be most loath to accept it.

23. I think therefore that this appeal should be allowed with costs and we must make an order for execution of the decree as asked for and also for execution of the order for costs. The costs will be as of an appeal from a decree.

Costello, J.

24. It seems to me abundantly clear that, in the present case, the surety must be hold liable having regard to the precise terms of the bond itself. There were only two conditions on which the surety could be released. One, that the suit should be dismissed, that is to say, the defendant should be under no liability at all towards the plaintiff and, secondly, that a sum having been adjudged to be payable by the defendants to the plaintiff that sum should be paid by the defendants to the plaintiff. Neither of those conditions have been satisfied in the present instance. This case, in my opinion is analogous to the case of Appuni Nair v. Isack Mackdan A.I.R. 1920 Mad. 355 where the matter was put by Burn, J., at p. 279 (of 43 Mad.) in this way:

The respondent had made himself liable for the amount that might be adjudged against the defendant. This adjudication might follow a compromise which the Court considers lawful and the liability of the surety is not limited to cases where there has been a contest to the finish.

25. It is obvious in the present instance that the learned Judge who dealt with the matter was of opinion that the com-promise if it could properly be called a compromise was not in the nature of a {collusive arrangement; it was, in fact, lawful and satisfactory. I agree however that this appeal should be allowed with costs.

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