1. This is a plaintiff's appeal arising out of a suit brought by Salig Ram Misir, creditor, to recover the amount due from his principal debtor, the suit being brought against Luchhman Das surety. It appears that on the 28th March 1912, a mortgage-deed was executed by Mt. Tulsa Kunwar and Lachhmanji, respondent, acting for himself and guardian of his minor son Dauji, for a sum of Rs. 2,000 under which a house in Benares was mortgaged. The deed stood in the name of Mt Sumitra, wife of Salig Ram, but it is the case of both parties that she was a mere benamidar. On the same date a security bond was executed by Lachhman Das, the present defendant in the suit, as a surety undertaking that if the amount of the mortgage money was not recovered from the property mortgaged under the deed or from the mortgagors, the mortgagee would be entitled to recover the whole of the amount together with the costs and the damages from the personal property of the surety. Under this bond the surety hypothecated certain immovable property.
2. Salig Ram brought a suit on the basis of his mortgage for sale of the house against Lachhmanji, Mt. Tulsa Kunwar and the minor Dauji. A defence was put forward on behalf of the minor son that there was no legal necessity for the mortgage of the house which was ancestral joint property. On 22nd January 1916, the Court held in favour of the minor that no legal necessity for the transfer had been established and accordingly declined to enforce the mortgage against the property. As, however, the suit was brought within six years of the mortgage, a simple money decree was passed against the executants Mt. Tulsa Kunwar and Lachhmanji. The decree-holder than proceeded to execute the decree by attaching the very house which had been released from the charge. Objections were raised to the attachment by one Chaturbhuj to the effect that the house did not belong to Lachhmanji at all but belonged to the objector. In support of his claim Chaturbhuj produced a sale-deed of the year 1867 standing in his ancestor's name. The objections were summarily dismissed under Order 21, Rule 58. The house was in due course put up for sale and purchased at auction in two lots for Rs. 900 and Rs. 1,250. aggregating Rs. 2,150, by the decree-holder himself. On 23rd April 1917 the auction-sale was confirmed and soon after that Salig Ram obtained possession of the house. Chaturbhuj, on 1st September 1917, instituted a suit for declaration of his title and for possession of the house. This claim was contested by Salig Ram, but was ultimately decreed on 31st July 1918, by the trial Court. Salig Ram in the meantime had made certain new constructions and additions to the house and pleaded that he was entitled to some compensation for the improvements. The Court granted a decree conditional on the payment of an amount to represent the cost of the improvements. Two appeals were preferred from this decree. One by Salig Ram challenging the finding that the property belonged to Chaturbhuj and not Lachhmanji, and the other by Chaturbhuj challenging the amount of the compensation awarded to Salig Ram. These appeals were disposed of on the 4th May 1921, on which date Salig Ram's appeal was dismissed, and the decree of the trial Court declaring Chaturbhuj's title and granting him possession was affirmed. The appeal preferred by Chaturbhuj, however, was allowed in part and the amount of compensation was reduced slightly. The result of the first Court's decree was that during the pendency of the appeal, Salig Ram was dispossessed from the house on 26th December 1918.
3. We may mention another proceeding which took place in the meantime. Salig Ram had executed his decree against Mt. Tulsa Kunwar also and had got attached certain ornaments in the house occupied by her. Objections were raised by Mt. Jasoda Kunwar that the articles attached belonged to her exclusively. The Court ordered that the ornaments should be released on condition that security was furnished of their full value. One Gopal Mukhia stood surety and deposited Rs. 1,200 which sum was considered to be the, value of the ornaments, The ornaments were allowed to be taken out of Court by Mt Jasoda Kunwar and Rs. 1,200 deposited as security remained. Ultimately the objection by Mt. Jasoda Kunwar was dismissed summarily and she brought a suit for a declaration that the ornaments actually belonged to her. While this suit was pending, the house was sold in March 1917, in execution of the simple money decree, in favour of Salig Ram. After the execution case had been struck off and the decree satisfied on full payment, Mt. Jasoda Kunwar applied to the Court for permission to withdraw the suit on the ground that it was not necessary to proceed with it. The Court allowed her to withdraw the suit. Later on the surety Gopal Mukkia was allowed to take away the amount of Rs. 1,200 lying in deposit with the Court apparently on the ground that the decree in favour of Salig Ram had been fully satisfied.
4. After having been dispossessed from the house in execution of the decree in favour of Chaturbhuj, Salig Ram took no further steps against his principal debtors Lachmanji and Mt. Tulsa Kunwar. He did not for instance try to revive the execution proceedings or to execute the decree by arrest of the person of the judgment-debtors or by attachment of their properties. He also does not appear to have 'requested the Court not to allow the sum of Rs. 1,200 to be taken away until the period of one year allowed to Chaturbhuj to bring the suit had expired. He also did not file any application under Section 47, Civil P.C.
5. What he did was that he instituted the present suit which was filed on 29th January 1924, against the surety Lachhman Das only. The principal judgment-debtors are not even parties to the present suit.
6. The claim was contested by Lachhman Das who pleaded that the remedy against the principal debtors had been exhausted and no claim lay against him. There was a further plea that in consequence of several acts and omissions committed by Salig Ram the surety has been discharged. The learned Subordinate Judge has acceded to the contention of the defendants and has dismissed the suit. Hence this appeal. The first point for consideration is whether the plaintiff, Salig Ram, having got his decree satisfied by purchase of the house, is entitled to re-open the matter and to assert that there has in fact been no satisfaction because the property purchased by him has ultimately gone out of his possession. It is clear on the authorities that if the purchase had been made by a stranger and no application by him had been preferred for setting aside the sale under Order 21, Rule 91 on the ground that the judgment-debtor had no saleable interest, he would have no further remedy by a separate suit to claim a refund of the amount paid by him as purchase-money from the decree-holder. This was the view expressed by this Court in two cases namely, Nannu Lal v. Bhagwan Das [1917] 39 All. 114 and Ram Sarup v. Dalpat Rai A.I.R. 1921 All. 377, the last case having been decided by a Bench of which one of us was a member. After some conflict of opinion in the other High Courts, all the High Courts in India have now come to the conclusion that no such separate remedy is available to an auction-purchaser. We may only refer to the following cases, namely, Habibuddin v. Hatim Mirza A.I.R. 1925 Lah. 467 Turanu Mohammad v. Jathi Mohammad [1918] 22 C.W.N. 760, Balwant Reghunath v. Bala Malu A.I.R. 1922 Bom. 205, Tirumalaisami Naidu v. Subramanian Chattiar [1917] 40 Mad. 1009 and v. Ram Dayal v. Ramphal Singh [1919] 22 O.C. 42. The basis of the decision is that at an auction the purchaser acquires the rights and interests of the judgment-debtor there being no warranty of title at all at a compulsory sale. Thus if the house had been purchased by a third party he would not have been entitled to get back the purchase-money on the ground that Chaturbhuj in a subsequent suit had dispossessed him. Of course in such a case the purchase-money would have been retained by the decree-holder himself.
7. The question before us is whether the decree-holder who purchased the property himself is in a better position than an innocent third party. It is the decree-holder himself who took the mortgage of the house and when the charge failed attached the property and put it up for sale. It was he himself who purchased it in spite of the fact that objections were raised by Chaturbhuj that the property had belonged to him and had been acquired by him under the sale-deed of 1867. The question is whether Salig Ram can even after the confirmation of the sale apply under section 47 of the code and claim that the decree has never the less not been satisfied. The only case on this point which has been cited by counsel before us, is the case of Upaw v. N.R.M. Chetty [1919] 13 Bur. L.T. 152 which strongly supports the contention of the respondent that even the decree-holder-purchaser is debarred from going behind the confirmation of the sale. In this case, however, we do not feel that we are called upon to decide this point finally, as we are of opinion that the suit must fail on a different ground.
8. Under Section 134, Indian Contract Act, a surety is discharged by any act or omission of the creditor, the legal consequence of which is the discharge of the principal debtor. So far as this High Court is concerned, it is now well settled that if the remedy of the creditor against the principal debtor is allowed to become barred by time, the surety is deemed to have been discharged. No doubt the other High Courts have taken a contrary view but we are bound to follow our own rulings unless overruled by their Lordships of the Privy Council. We may further note that the words in Section 134 are not that by any act or omission by the creditor the debt became extinguished. The words are that the legal consequence of which is a discharge of the principal debtor.
9. The view taken by this Court is that when the remedy against the principal debtor is barred by time and ceases to be enforceable, the legal consequence of this circumstance is that the principal debtor is discharged. If the surety were still liable to pay the amount he would in his turn be entitled to proceed against the debtor and recover the amount from him even after limitation has set in. We may only refer to the cases of this Court Hazari v. Chunni Lal (1886) 8 All. 259; Radha v. Kinlock [1889] 11 All. 310 and Ranjit Singh v. Naubat [1902] 24 All. 504. The point has been discussed at considerable length in these cases and it is not necessary for us to go into it in any detail. It must be taken that if Salig Ram allowed his remedies to become barred as against Lachmanji and Mt. Tulsa, it is no longer open to him to proceed against the surety.
10. The point that now remains to be considered is whether Salig Ram's remedies against Mt. Tulsa were barred on 29th January 1924, when the plaintiff's suit was instituted. The learned advocate for the appellant has contended that after dispossession the remedy open to Salig Ram was to revive the execution proceedings inasmuch as the auction-sale had been automatically set aside and that under Section 47, Civil P. C,. he was entitled to proceed against the judgment-debtors, on the ground that the decree had not been in fact satisfied. If an application of this nature could be maintained, it would, however, be an application for execution of the decree which would be governed by Article 182, Limitation Act, or by an application for revival of execution proceedings which would be governed by the general Article 181 of the Act. In either case, the right to apply would accrue on 31st July 1918, when the suit was decreed by the Court of first instance and in any case on 26th December 1918, when Salig Ram was actually dispossessed. The mere fact that an appeal from the first Court's decree preferred by Salig Ram himself was pending in the High Court and was ultimately dismissed, would not prevent the first Court's decree from being operative. Once it had been declared by the first Court that his judgment-debtor had no saleable interest, the cause of action for making the application certainly arose in favour of Salig Ram. Once time began to run it could not be suspended. As authority for this proposition we may refer to the case of Hukum Chand Boid v. Pirthi Chand Lal Chowdhury A.I.R. 1918 P.C. 151 decided by their Lordships of the Privy Council. At page 519 their Lordships observed that under the Indian law and procedure an original decree is not suspended by presentation of an appeal nor is its operation interrupted when the decree on appeal is one of dismissal and that the cause of action arises on the passing of the first Court's decree and is not suspended till that decree is finally affirmed on appeal.
11. It has been urged on behalf of the appellant that inasmuch as the appeal preferred by Chaturbhuj was allowed in part the decree of the first Court was modified and the case decided by their Lordships of the Privy Council is distinguishable. We, however, think that the two appeals stood on a different footing. In Chaturbhuj's appeal no question of the validity of the decree as regards title was at all raised. He was only challenging the amount of the compensation awarded. The question of title was raised in the appeal preferred by Salig Ram and the case is, therefore, very much similar to the present case. The present Suit was not filed till more than three years after the first Court's decree and even after the delivery of possession to Chaturbhuj. We must, therefore, hold that the remedies of the creditors, if any, had become barred by time when the present suit was filed. In view of the authorities "of this Court the plaintiff has disqualified himself from seeking any relief against Lachhman Das. The result, therefore is that this appeal must be dismissed with costs.