K.S. Das Gupta J.
1. The petitioner was defendant in a suit before the Small Cause Court at Alipore for recovery of arrears of rent. The suit was decreed ex parte. On 9-4-1949 he filed an application under Order 9, Rule 13, Civil P. C., for setting aside the 'ex parte' decree.
The provision in Section 17(1), Provincial Small Cause Courts Act is that the procedure prescribed in the Code of Civil Procedure, 1908, shall, save in so far as is otherwise provided by that Code or by the Provincial Small Cause Courts Act, be the procedure followed in a Court of Small Causes in all suits cognizable by it and in all proceedings arising out of such suits.
It was this provision which made available to the petitioner the procedure of an application under Order 9, Rule 13, Civil P. C., and, as already stated, he took advantage of this provision and filed an application for setting aside the decree. Section 17(1) has, however, a further provision in its proviso which is in these words:
'Provided that an applicant for an order to set aside a decree passed 'ex parte' or for a review of judgment shall, at the time of presenting his application, either deposit in the Court the amount due from him under the decree or in pursuance of the judgment, or give such security for the performance of the judgment or give such security for the performance of the decree or compliance with the judgment as the Court may, on a previous application made by him in this behalf, have directed.'
The result of this is that an application under Order 9, Rule 13, Civil P. C. for setting aside a decree passed under the Provincial Small Cause Courts Act is not a valid application unless either the applicant deposits in Court the decretal amount or gives such security as the Court on his application may direct. When the petitioner filed the application under Order 9, Rule 13, Civil P. C. no cash was deposited. The Court thereupon ordered him 'to deposit money, at his risk, by 30-4-49'.
On 27-4-49, on an application by the petitioner to be permitted to furnish security instead of cash deposit, the Court ordered, 'He is to furnish security, at his risk by 30-4-49', On 27-4-49, on an application by the petitioner to be permitted to furnish security instead of cash deposit, the Court ordered. 'He is to furnish security, at his risk by 30-4-49.' On 30-4-1949 a security bond was filed by the petitioner. The document is in these words:
'In the 2nd Court of the Munsif at Alipore, 24 Parganas.
Misc. Case No. of 1949
S. C. C. Suit No. 381 of 1947
Sk. Kasem Ali, Applicant
Kanai Lall Pal and Ors. Opposite Party.
Whereas an ex parte decree has been obtained by the opposite party against the applicant in the aforesaid suit and whereas the applicant Sk. Kasem Ali has brought a case for setting aside the said ex parte decree under Order 9 Rule 13 on the ground of fraud and non-service of summons.
And whereas the Court has ordered the applicant to furnish sufficient security.
Therefore I Ahmad Ali Khan son of Md. Ali Khan of Vistipara Tollygunge have voluntarily become surety and do hereby bind myself, my heirs and executors to the said Court that the applicant judgment-debtor shall pay the decretal amount at any time when called upon; and in default of such payment I bind myself, my heirs and executors in respect of my share in the property described in schedule below to pay to the said Court at its order decretal sum amounting to Rs. 179/12/9.
In witness whereof I set my hand and seal this 30th day of April, 1949.
Witnesses: Ahmad Ali Khan1. Gourhari Mandal, Pleader
Schedule above referred to.
All that piece and parcel of about 8 Cottas of land hereditament together with a two storied building standing thereon being and situated at premises No. 38 Russa Road South within Tollygunge Municipality, P. S. Tollygulge, District 24 Parganas butted and bounded
On the North By Sultan Alim RoadOn the East By Kanai Lal Halder's landOn the South By the house of Shah MoujiNanci and On the West By Russa Road
My share in the property is 4 as. 6 pies and approximate value of my share in the property is Rs. 20,000/-
Ahmad Ali Khan.'
This bond was written on a stamp paper of Rs. 1/8/0 but had no court-fee stamp affixed. Immediately after the bond was filed, the Court passed an order directing the Sheristadar to test and report on the bond. On 14-5-1949 the Court passed the following order: --
'It appears that the applicant has not filed -/8/- as adhesive stamp on the security bond. Applicant to file the same. Put up on 21/5 for the same and for Sheristadar's report.' Eight annas court-fee stamp was filed by the petitioner on 18-5-1949. On 21-5-1949 the Court after consideration of the Sheristadar's report passed an order accepting the bond and ordered further 'Call for the record and put up on 4/6 for orders.'
Thereafter, the application under Order 9, Rule 13, Civil P. C. was heard and was allowed and the Court passed an order restoring the suit.
2. This Court was moved by the opposite party against the order allowing the application under Order 9, Rule 13, Civil P. C. and it was urged that the security bond, not being duly stamped and not registered as required by law, there was not a proper compliance with the conditions prescribed in the proviso to Section 17(1), Provincial Small Cause Courts Act, and, therefore, the application under Order 9, Rule 13, Civil P. C. was not maintainable.
3. The matter came up for hearing before Chunder, J. and His Lordship remanded the case to the Small Cause Court to be heard by some other Judge than the learned Munsiff who decided the application on the first occasion -- for decision of two objections raised on behalf of the plaintiff viz. the bond required adhesive stamp and further that it required registration, and directed, 'If the court below finds that these objections are proper it will reject the application under Order 9, Rule 13. If the court finds that they do not affect the petition filed by the defendant then it will proceed with the merits of the case'. After the matter went back in accordance with this order, the learned Munsiff, who heard it, decided that the bond required, under the law, to be stamped with adhesive court-fee stamp of annas eight, and also that it required registration and in that view rejected the application under Order 9, Rule 13.
4. The present Rule has been obtained by the petitioner against this order rejecting his application under Order 9, Rule 13, Civil P. C.
5. The decision of the first question viz. whether the security bond is required to be affixed with court-fee stamp of eight annas depends on the answer to the question whether it is a bail bond 'given in pursuance of an order made by a Court under the provisions of the Civil Procedure Code'. The sixth clause of Schedule II, Court-fees Act provides for a court-fee of eight annas on a
'bail bond or other instrument of obligation given in pursuance of an order made by a Court or Magistrate under any section of the Code of Criminal Procedure, 1898, or the Code of Civil Procedure, 1908, and not otherwise provided for by this Act.'
Admittedly, there is no other provision in the Court-fees Act as regards the bail bond that was given in the case. The question, therefore, is whether it is a bail bond given in pursuance of an order made by a Court under any section of the Code of Civil Procedure. In the case of Peda Pitchamma v. Pedamuneyya 1935 Mad 380 (AIR V 22) (A) a Full Bench of the Madras High Court held that a bail bond given under Section 17(1), Provincial Small Cause Courts Act had to be stamped with court-fee stamp of annas eight under Article 6 of Schedule II, Court-fees Act.
Their Lordships thought that the Provincial Small Cause Courts Act is a kind of supplemental Act indicating the special procedure to be followed in Small Cause Courts and that the proviso to Section 17(1) does not add to the section but cuts down the very wide discretion which Courts have under Order 9, Rule 13, Civil P. C., in setting aside an ex parte decree, and in imposing terms upon the petitioner, and that consequently, the order passed was an order under the Civil Procedure Code.
6. A somewhat similar question came up before a Special Bench of the Bombay High Court in the case of Baburao Keshavrao v. Kalavatibai Amrutrao 1940 Bom 275 (AIR V27) (B). In that case the Court had to consider whether a bond given by the applicant as guardian of the estate of a minor in accordance with the orders of the Court was required to be stamped under Article 6 of Schedule II, Court-fees Act, and their Lordships held,
'Article 6 of Schedule 2, Court-fees Act, only refers to the bail bonds or other instruments of obligation given in pursuance of an order made by a Court or Magistrate under any Section of the Criminal Procedure Code or Civil Procedure Code. In our opinion, the bond was not given under either of those Codes; it was given under the Guardians and Wards Act. The case is covered by Article 57 of the Schedule to the Stamp Act.'
Their Lordships held, that the bond did not required to be stamped with court-fees under Article 3 of Schedule 2.
7. With great respect to the learned Judges of the Madras High Court, I am of opinion that the view that the bond given in accordance with the provisions of Section 17, Provincial Small Cause Courts Act is a bond given under the Code of Civil Procedure is not correct. Whether the procedure laid down in the Provincial Small Cause Courts Act can be correctly called supplemental to the Civil Procedure Code or not is of little consequence.
The fact remains that the proviso as enacted in Section 17(1), Provincial Small Cause Courts Act is not in the Civil Procedure Code. Order 9, Rule 13, Civil Procedure Code may properly be said to be a section of the Civil Procedure Code. If Order 9, Rule 13 had provided for any order for a bond, the bond might have been considered to have been given under an order passed under the Civil Procedure Code.
Order 9, Rule 13, however does not contain any such provision. The plain and simple fact is that the provision of law under which the order directing a security bond to be given is passed is embodied in the Provincial Small Cause Courts Act; and I can see no reason why I should accept the fiction that such an order is passed under the Civil Procedure Code, in place of the fact that it is given under the provisions of Section 17, Provincial Small Cause Courts Act.
My conclusion, therefore, is that the law does not require this security bond to be affixed with any court-fee stamp, and consequently, having been written on stamp paper in accordance with Stamp Act, the bond was proper and sufficient in so far as the matter of stamps was concerned.
8. This brings us to the much more difficult question whether the filing of an unregistered security bond was a compliance with the condition laid down in Section 17(1), Provincial Small Cause Courts Act. If without registration the bond was effective to bring into existence a security which the party could enforce, it could be a sufficient compliance. On this question divergent views have been expressed by different High Courts.
Our own court appears to have assumed in several cases that without registration the bond will not be effective and will not be admissible in evidence. But the question does not appear to nave been raised or decided in any reported case of this Court. The Madras High Court has taken the view that without registration such a bond is not effective and is not admissible in law. But the Bombay and Lahore High Courts have taken a different view. The Rangoon High Court has taken the same view as the Madras High Court.
9. The question is whether Section 17, Registration Act requires registration of this bond. Section 17 provides among other things that non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property, shall be registered.
The sequence of Section 49, Registration Act is that a document required by Section 17 to be registered shall not affect any immoveable property comprised therein, or shall not confer any power to adopt, or shall not be received as evidence of any transaction affecting such property, unless it has been registered. On the face of it the bond that was filed did purport to create right, title and interest in properties valued over one hundred rupees, and consequently, it would ordinarily require registration.
The second Sub-section to Section 17, however, lays down certain exceptions to the requirements of the first sub-section and Clause (vi) provides that any decree or order of a Court except a decree or order expressed to be made on a compromise & comprising immoveable property other than that which Is the subject matter of the suit or proceeding, shall not require registration in spite of what is contained in the first sub-section.
10. Another exception that has been recognised is as regards documents forming part of Judicial proceedings. In the case of Bindesri Naik v. Gangasaran Sahu 25 Ind App 9 (PC) (C), the Privy Council held that five incidental petitions to the Court praying for further time after the expiry of the year of grace in foreclosure proceedings, which petitions were confirmed by the Court and directed to be filed with the foreclosure record, were admissible in evidence, and laid down the principle
'that the provisions of Section 17, Registration Act do not apply to proper judicial proceedings, whether consisting of pleadings filed by the parties, or of orders made by the Court'.
Less than two years after this in the case of Pranal Annee v. Lakshmi Annee 26 Ind App 101 (PC) (D) the Privy Council had to consider the effect of an agreement (razinamah), which was made the foundation of an order in another suit passed by the Court, as regards the properties in that suit, in creating title to some or other properties included in the razinamah. Their Lordships held that
'the objection founded upon its non-registration did not apply to its stipulations and provisions, in so far as these were incorporated with, and given effect to, by the order made upon it by the Subordinate Judge in the earlier suit, and that the razinamah, in so far as it was submitted to, and was acted upon judicially by the learned Judge was in itself a step of judicial procedure, not requiring registration.'
Their Lordships proceeded to observe,
'If the parties, after agreeing to settle the suit of 1885 on the footing that they were each to take a half share of the lands involved in that suit, and also a half share of the lands now in dispute, had informed the learned Judge that these were the terms of the compromise, and had invited him by reason of such compromise, to dispose of the conclusions of the suit of 1885 their Lordships see no reason to doubt that the order of the learned Judge, if it had referred to or narrated these terms of compromise, would have been judicial evidence, available to the appellant, that the respondents had agreed to transfer to her the moiety of land now in dispute. But their Lordships are unable to find that any such course was taken either in the razinamah or in the judicial order which gave effect to it. * * * So far as regarded these lands, the compromise was not submitted to the learned Judge, but was deliberately left by the parties to stand upon their unregistered agreement of union.'
Their Lordships held that owing to non-registration the agreement, except in so far as it was incorporated in the consent decree was ineffectual in law to create title in the defendant to the lands in suit.
11. The main question for decision in the present case is whether the security bond that was filed falls within the rule laid down in Bindesri's case (C) and Pranal Annee's case (D). In the case of Jayappa Lokappa v. Shivangouda Dyamangouda 1928 Bom 42 (AIR V15) (E) the Bombay High Court had to consider the question whether an unregistered security bond furnished by the defendants under the order of the Court to obtain stay of execution could be enforced, Marten C. J. and Crump, J. held that the security bond was 'in itself a step in judicial procedure' and plainly an order making the rule absolute was founded upon it.
Accordingly, they held, it fell within the rule laid down in Pranal Annee's case (D), and relying on this rule, and also on the pronouncement of the Privy Council in Bindesri's case (C) that the provisions of Section 17, Registration Act did not apply to proper judicial proceedings, whether consisting of pleadings filed by the parties or of orders made by the Court, held that the security bond did not require registration.
12. This view was also taken by a Full Bench of the Lahore High Court in the case of Kasturi Lal v. Goverdhan Das 1934 Lah 138 (AIR V21) FB) (P) overruling the contrary view taken by Martineau, J. sitting singly in the case of Lahore Spinning and Weaving Co. v. Uttam Chand 1919 Lah 8 (AIR V8) (G).
A security bond had been executed in accordance with an order passed under Order 41, Rule 5, Civil P. C., and the appeal against the decree having been dismissed and the judgment debtor having failed to pay the decretal amount, the decree-holders moved the executing court to enforce the bond against the sureties and the properties hypothecated under the bond. The question was whether the bond required registration. Tek Chand, J. delivering the leading judgment said that it was not the execution of the bond which effected the transfer of right in the immovable property described there, so as to make it available for the satisfaction of the decree which might be passed by the Appellate Court, but it was the order of the Court accepting the bond which creates those rights; and that the case fell within the purview of the 'broad general principle repeatedly laid down by the Privy Council that proceedings of Court do not require registration.'
13. The question whether such security bonds require registration came up for consideration before the Madras High Court, as early as 1908, in
-- 'Nagaruru Sambayya v. Tangatur Subbayya' 31 Mad 330 (H). The Court rejected the argument that, 'the order of the Court 'security is accepted', which is endorsed on the bond, is what gives the bond validity and that the document falls within exception (i) to Section 17' and observed,
'We do not think that this is so. The words 'Security is accepted' are we take it merely an intimation by the Court that the property given as security is sufficient for the purpose.'
Their Lordships held that the view taken by them that the document required registration was not inconsistent with the decisions of the Privy Council in the cases of 22 Mad 508 (D) and 20 All 171 (O).
14. In -- 'A.S.P.S.S. Chettyar Firm v. Lloyds Bank' 1935 Rang 168 (AIR V 22) (I), the Rangoon High Court had to consider this Question. A consent decree had been passed by which the amount that was decreed was made payable in two instalments and it had been further ordered that the defendant shall tender security for the amount due x x x x Pursuant to the decree, the defendant executed a bond. The question arose whether this security bond required registration.
The Court answered the question in the affirmative. Page C. J., who delivered the leading judgment, held that the execution of the bond was not a step of judicial procedure. Referring to the judgment of Tek Chand J. in 1934 Lah 138 (AIR V 21) (F) that it was not the execution of the bond which effects the transfer of right, but it was the order of the Court accepting the bond, which created this right, Page C. J. observed:
'But with all due deference I do not so appraise the legal position. As I apprehend the matter all that the Court does in such circumstances is to intimate that the property tendered as security is deemed to be sufficient; in other words, it approves the substance not the form of the security the execution of the bond being the mode and the bond the form in which the security is subsequently furnished.
I cannot persuade myself that in such circumstances the execution of the bond is an act of the Court or 'a step of judicial procedure', or that the court merely by approving the substance of the security tendered can, or purports to convert instruments such as the security bonds under consideration, which by law are incapable of affecting the title to immoveable property into operative, valid and admissible documents of title.'
15. Clearly, on the authority of the decisions of the Privy Council in Bindesri's case (C) and Pranal Anni's case (D), we are bound to hold that if the execution of the bond forms part of judicial proceedings, the bond does not require registration. Whether or not it forms part of judicial proceedings, depends on the question whether it is the order of the Court which transfers the right in the property.
The purpose of an order to furnish a security bond is to provide, in consideration of some respite given to a party -- either in the way of extending the time for payment or in the way of staying of execution of a decree or in some other way -- that the other party to the proceedings be secured from loss and the inconvenience that may result from the fact that respite is given. This security must be complete and effectual before the Court will give the respite. The security may be given in cash or by a document hypothecating movable or immovable property, or in the Presidency Town by deposit of title deeds.
In whatever form the security is given, it seems to me, that the order of acceptance by the Court has nothing to do with the sufficiency or the validity. With great respect to the learned Judges of the Bombay and the Lahore High Courts, who took the contrary view, I am of opinion, that to think that it is the order of the Court which creates the rights is entirely fallacious. The Court cannot accept a bond unless it effectually transfers rights; how can the Court say, 'I shall accept it, and thereby make the transfer effective.' The transfer of the rights must happen first; the acceptance by the Court can only come later.
16. I, therefore, respectfully agree with the view taken by the Rangoon High Court and the Madras High Court that a security bond, requires no order of the Court to make it effective and the Court's order of acceptance of the bond only indicates that the Court considers the security sufficient and does not give validity to the bond.
It necessarily follows, as held by Page, C. J., that execution of a bond, in such circumstances, is not a step of judicial procedure or a part of judicial proceedings. My conclusion, therefore, is that this bond required registration and as it was not registered it was not a valid and effective bond. Consequently, the condition in Section 17(1), Provincial Small Cause Courts Act was not complied with.
17. The application under Order 9 Rule 13, Civil P C has, therefore, been rightly rejected. I would, therefore, discharge this Rule. But, in the circumstances of the case, the parties would bear their own costs.
Debabrata Mookerjee, J.
18. I agree.