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Abdul Baby Sadagar Vs. Belay Ali Sadagar - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in37Ind.Cas.919
AppellantAbdul Baby Sadagar
RespondentBelay Ali Sadagar
Cases ReferredRaj Narain Mookerjee v. Ful Kumari Debi
Excerpt:
civil procedure code (act v of 1908), order xxxviii, rules 5 (b), 6 (b) - surety, withdrawal of--order permitting withdrawal without notice to parties, effect of--recission of order, legality of--continuing guarantor, position of--contract act (ix of 1872), section 130. - .....the learned judges in the courts below seem to have considered that, in a case of this nature, the surety could withdraw from the guarantee at any time by simply giving a notice that he intended not to be a surety any longer. in my opinion that is not so. section 130 of the indian contract act only says that a continuing guarantee may be revoked at any time as regards future transactions. it is a well known class of cases and there have been many cases in the english courts in which a surety has been allowed to withdraw, where the guarantee has been found to be a continuing guarantee, which the guarantee in the present case is not, as to any future transaction. but no case has ever established that where a surety has given a guarantee to cover a definite case, he can simply by a notice.....
Judgment:

Fletcher, J.

1. This is an appeal from a decision of the learned District Judge of Chittagong dated the 14th January 1916, affirming the decision of the Munsif of the same place. The appellant before us obtained a decree for money against one Nawab Ali. The respondent to the appeal was a person who stood surety for the judgment debtor Nawab Ali for the amount of any decree that might be passed against the judgment debtor. A case of that nature is no doubt a simple case; but in view of what happened in the Courts below the matter seems to have created some difficulty. The decree-holder, who is the appellant before us, made an application under the terms of order XXXVIII, Rule 5, Code of Civil Procedure, for attachment before judgment. A Rule was issued and it was made absolute in the ordinary terms that unless the defendant gave security to the satisfaction of the Court, for the amount of any decree that might be passed against him in the suit, his property should be attached. The defendant did give security, the surety being the present respondent to this appeal. Subsequently, on the 17th August 1914, the respondent, the surety, made an application to the Judge to be released from his security-bond. The Judge heard that application without issuing notice to the plaintiff, the present decree-holder, and made an order on the 18th August 1914 that the defendant do file fresh security-bond for the same amount of money within a week, in default, the plaintiff's application for attachment before judgment may be granted. The plaintiff and his Pleader are absent. The surety be released from the terms of the security, bond.' The order seems to have been made without notice to the plaintiff, who obviously had a considerable interest in the matter. 'Upon coming to know of that order, the plaintiff applied to he Judge to annul that order and the Judge on the 4th September 1914 annulled the order till the hearing of the matter, and it is obvious from another order of the same date that the defendant had failed to give any further security and the order of the 15th August was treated as anulled. The learned Judges in the Courts below seem to have considered that, in a case of this nature, the surety could withdraw from the guarantee at any time by simply giving a notice that he intended not to be a surety any longer. In my opinion that is not so. Section 130 of the Indian Contract Act only says that a continuing guarantee may be revoked at any time as regards future transactions. It is a well known class of cases and there have been many cases in the English Courts in which a surety has been allowed to withdraw, where the guarantee has been found to be a continuing guarantee, which the guarantee in the present case is not, as to any future transaction. But no case has ever established that where a surety has given a guarantee to cover a definite case, he can simply by a notice to the creditor withdraw the guarantee so as to nullify altogether the effect of the security. The decision in Raj Narain Mookerjee v. Ful Kumari Debi 29 C. 68 C.W.N. 7 has got nothing to do with this case at all. That decision shows that the guarantee that was given by the surety in that case was, in fact, a continuing guarantee and that the surety could withdraw not absolutely from the guarantee but with reference to any future transaction. That has got nothing to do with the point raised in this case. The Judge in the case, having made the order without notice to the other side that the surety could withdraw from the security, was obviously competent to rescind that order on the application of the plaintiff the present decree-holder. He did do so, the effect being, as it ought to be, that the security given by the present respondent for the amount of any decree that might be passed against the defendant stands good and is a valid security. In my opinion, the decisions of the Courts below are wrong. We ought, therefore, to reverse them and allow the appeal with costs both in this Court as well as in the lower Courts. We assess the hearing-fee at fifty rupees.

Richardson, J.

2. I agree The order of the 15th August 1914 discharging the respondent was, as I understand, made without notice to the plaintiff That order was at the best suspended by the order of the 4th September 914 and it was never revived. So far as I can see, the Courts below were wrong in law in the conclusion that they came to that the respondent had been, in fact, discharged.


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