1. This is an appeal from an order refusing to permit execution to be levied against a person who is alleged to have stood surety for the judgment-debtor in execution proceedings.
2. The suit out of which the controversy arose resulted in a consent-decree under which the judgment-debtor was ordered to pay Rs. 330 and the costs of the suit. An execution case followed. In the course of that case an agreement was arrived at between the surety, who is the present contending respondent, the decree-holder and the judgment-debtor. The decretal amount was not paid by the judgment-debtor, but after an application had been made to execute the decree against the surety, a petition was filed on behalf of all the parties concerned stating the terms of the tripartite agreement which had been arrived at, and praying that the execution case might be withdrawn. That petition bears a Court-fee stamp appropriate to a petition, but is not stamped either as a contract of suretyship or as a security bond. The Court, having regard to the petition, permitted the execution case to be withdrawn.
3. Subsequently, the judgment-creditor applied for execution of the decree against the surety to the extent to which he had made himself -personally liable for the decretal amount. This application was made under Section 145, C. P, C., which provides that
4. 'Where any person has become liable as surety (a) for the performance of any decree or any part thereof, or (b) for the restitution of any properly taken in execution of a decree, or (c) for the payment of any money, or for the fulfilment of any condition imposed on any person, under an order of the Court in any suit or in any proceeding consequent thereon, the decree or order may be executed against him, to the extent to which Le has rendered himself personally liable, in the manner herein provided for the execution of decrees, and such person shall, for the purposes of appeal, be deemed a party within the meaning of Section 47.
5. The objection of the surety to am order being made under Section 145, C. P. C, was that he had never become a surety within Section 145, C. P. C, or otherwise for the fulfilment of any obligation of the judgment-debtor under the decree. Now the contract of suretyship, upon which it was sought to make the respondent liable in execution of the decree obtained against the judgment-debtor was contained in the petition of compromise, which was in the following form:
6. 'Both sides hereby state:---It being inconvenient to pay money at present and the judgment-debtor, petitioner, having approached the decree-holder and Easin Sarkar of Mahajanpur having stood surety for the said money it is arranged that the judgment-debtor will pay the entire amount due after deducting the amount paid and the costs of this execution case to the decree-holder by the month of Kartik 1328 B. S., otherwise I, Easin barkar, stand surety for the entire amount aforesaid. If Easin Sarkar does not pay the money to you the decree-holder, then you the decree-holder, will be able to realise the money from me Easin Sarkar by executing this decree. Let it be known that the entire cattle attached are released from attachment. Let it be known that we, the decree-holders, have got Rs. 100 which was in deposit with Kutub Mandal which will be credited in the decree. The judgment-debtor and the surety remain liable for Rs. 253-13 (two hundred and fifty-three rupees, one anna and three pies only) and costs of this execution case after deducting the aforesaid Rs. 100.'
7. The contest of fact at the hearing of this application was whether the respondent had become liable as surety for the performance of the decree or for the Payment of any money within the meaning of Section 145, C. P. O. The respondent asserted that he had not signed and was neither a party nor privy to the contract set out in the petition. The finding of fact by the Trial Court was adverse to this contention
8. It was held by the learned Munsif that the respondent signed this petition and that the petition embodied the terms of the agreement which, had been arrived at between the parties. This finding was not animadverted upon by the lower Appellate Court and must stand.
9. In both the lower Courts this document was admitted in evidence and was marked as an exhibit. The lower Appellate Court, however, dismissed the application upon the ground that inasmuch as the contract of suretyship was not duly stamped, it was not valid as a contract and further held that whether that were so or not, the only mode by which a person could become liable as a surety under Section 145, C. P. C. was by executing a security bond in favour of the Court, which the Court accepted.
10. On a further appeal to this Court, the contention that the contract contained in the petition was rendered void because it was not duly stamped was not persisted in.
11. In my opinion, there is no substance in that contention. Failure duly to stamp a document which must needs be stamped by reason of the provisions of the Stamp Act does not affect the validity of any contract therein contained but renders the document inadmissible in evidence.
12. In my opinion, the contract contained in the petition signed by the three parties concerned amounted to a contract of guarantee within, Section 126 of the Contract Act. Under Section 126 such a contract 'may be either oral or written.' In my opinion the contract must be stamped not only as a petition but also with a further stamp appropriate to a contract of guarantee as provided by the Stamp Act. Under Section 35 of the Stamp Act, the instrument in suit ought not to have been received in evidence or acted upon unless it was duly stamped. It was conceded, however, that this instrument was admitted in evidence in the Courts below. It falls, therefore, within the ambit of Section 36 of the Stamp Act which provides that:
Where an instrument has been admitted in evidence such admission shall not, except as provided ins. 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been, duly stamped.
13. The admissibility of the document, therefore, cannot be challenged in this appeal or in any proceeding subsequent to the trial and incidental to the suit.
14. Now the meaning and effect of Section 36 of the Stamp Act was considered in the case of Rung Lal Kalooram v Kedar Nath Kesriwal 77 Ind. Cas. 815 : 27 C. W. N. 513 at p. 520. In that case Richardson, J., at page 520*, observed with reference to Section 36:
Under that provision if any penalty is to be exacted, it can only be exacted under Section 61. The revenue is then protected, so far as it is protected, by that section.
In my opinion, once an instrument is admitted in evidence in any proceeding, either under Section 35 or under Section 36, it is available in that proceeding for all purposes as if it had been properly stamped from the outset. The proceeding will go through to a valid termination and cannot afterwards be challenged for want of jurisdiction merely by reason of non-compliance with the Stamp Act.
Section 36 would be entirely nullified if on the conclusion of the proceeding in which the instrument is admitted, the proceeding could be set aside by a separate proceeding initiated by one of the parties on the sole ground that the person having authority to receive evidence had admitted or acted upon an unstamped or insufficiently stamped instrument.
15. See also per Chitty, J., in Bombay Co., Ltd. v. National Jute Mills Co., Ltd. 16 Ind. Cas. 153 : 39 C. 669 at p. 678.
16. The learned Pleader for the respondent, however, contended that such, a contract of suretyship not being a security. bond in favour of the Court but merely a private arrangement between the decree-holder, the judgment-debtor and the surety did not render the surety amenable, to the provisions of Section 145, C. P. C. In my opinion for such a contention there, is no warrant either in the C. P. C. or in the Contract Act, Under Section 145, C. P. C., in order that execution may be levied against a surety, it is incumbent upon the applicant to prove that the surety had rendered himself personally liable for the performance of some obligation as provided in the section.
17. Having regard to the terms of the contract of suretyship in this case it is apparent that the respondent expressly contracted that he should be personally liable to perform the decree as provided in the compromise, and that if he failed to fulfil his obligation as a guarantor of the judgment-debtor, 'the decree-holder will be able to realize the money from me Easin Sarkar by executing this decree.' It is clear therefore, that if the instrument in question, is within Section 145, Order F. C. the contract is one under which the respondent rendered himself liable to have the decree executed against him personally to the extent to which he had guaranteed the performance by the judgment debtor of his, obligations under the decree. It is urged, however; that a contract of suretyship under Section 145* C. P. C., must be in the form of a security bond. No authority for such a contention has been cited before us, although we have been referred to mumerous cases upon the subject and the terms of the section contained no reference to the form which a contract of suretyship within the meaning of the section must take. The words are: 'Where any person has become liable as surety,' and under Section 126 of the Contract Act a contract of suretyship 'may be either-oral or written' In my opinion, the: instrument in suit conforms to the require ments of Section 145, C. P. C.
18. Lastly it is urged that it is only where the contract of suretyship is in favour of the Court that execution can be levied against the surety under Section 145, C. P. C.
19. No doubt in many cases the security for the performance of the obligation referred to in Section 145 will be given to the Court, and in such a case it is usual torequire that a security bond should be entered into. But I see no warrant in any of the cases to which we have been referred for the proposition that it is only a security bond in favour of the Court which can be executed against the surety under Section 145.
20. No such limitation is contained in the section, and, in my opinion, it follows from the ratio decidendi of the judgments delivered in Mukta Prosad v. Mahadeo Prasad 33 Ind. Cas. 982 : 38 A. 327 : 14 A. L. J. 385. and Brogendra Lall Dass v. Lakshmi Narain Khanna 29 Ind, Cas. 149 : 19 C. W. N. 961. that no such limitation as is suggested ought to be placed upon the language used in Section 145, C. P. C. In my opinion in a case where a person has contracted expressly that he will guarantee tie performance of any of the obligations set Out in Section 145 whether such a contract be oral or in writing, he has rendered himself liabe to be proceeded against in execution of the decree as provided in Section 145, C. P. C.
21. For these reasons, in my opinion, the order against which this appeal is brought should be set aside and the decree-holders would be permitted to proceed with the application under Section 145, C. P. C., for execution against the surety.
22. In my opinion this instrument ought not to have been admitted in evidence without having been stamped with an additional eight annas stamp, and we determine that the amount of duty with which the instrument is now chargeable is eight annas exclusive of any penalty which may be levied, and that the duty is payable by the decree-holders. The document will be impounded, and a copy of the declaration of the Court as to the duty payable will be sent to the Collector.
23. The appellants are entitled to their costs in all the Courts. The hearing fee on this appeal is assessed at three gold mohurs.
24. I agree