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Subbaraya Pillai (). v. Sathanatha Pandaram (Petitioner)

Madras High Court
Apr 23, 1918
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Judicial Opinion Summary — Napier, J. (Civil Miscellaneous Second Appeal)

Factual and Procedural Background

The Second Appeal concerns whether Section 145 of the Code of Civil Procedure (CPC) applies to surety bonds given to a decree-holder outside of Court. The factual matrix as stated in the opinion is:

  • A counter-petitioner executed a surety bond in favour of the plaintiff in O.S. No. 110 of 1913 in the District Munsif Court of Tiruturaipundi.
  • In consideration of that bond the plaintiff-petitioner stayed execution of his decree against the defendant.
  • The plaintiff subsequently sought execution of the decree against the surety; an objection was raised that Section 145 CPC did not apply to a surety bond taken outside Court.
  • The District Munsif made a decision regarding the application of Section 145; on appeal the District Judge held the section to be of general application and allowed execution to proceed.
  • The matter reached this Court by way of Civil Miscellaneous Second Appeal, and the Court ultimately allowed the appeal and restored the judgment of the District Munsif (see Holding below).

Legal Issues Presented

  1. Whether Section 145 of the Code of Civil Procedure applies to surety bonds executed by a judgment-debtor's surety to the decree-holder when such bonds are taken outside the Court (i.e., not filed with or taken before the Court).
  2. Whether the language of Section 145 and its sub-sections (a), (b) and (c) should be confined to surety bonds entered into in the face of the Court or recorded by the Court in accordance with the provisions of the Code.

Arguments of the Parties

The opinion presents contrasting contentions on the scope of Section 145 CPC. The text does not attribute a detailed, party-by-party brief to specific named parties beyond noting the procedural posture, but it does present the principal arguments advanced before the Court. These are summarized below under neutral headings that reflect the positions taken in the litigation.

Arguments Asserting a Wide Application of Section 145

  • The plain language of Section 145 is wide and, on its face, could include surety bonds taken outside Court.
  • Decisions such as Lakshmi Narain Khanna v. Guru Datta Mehra were cited for the proposition that the section does not require the liability to have arisen by an application presented to the Court or by a bond filed in the proceedings.
  • Some authorities were said to treat the obligation of a surety (e.g., where security was reported to the Court and execution was stayed) as enabling execution against the surety even where the security was initially given outside Court.

Arguments Asserting a Restricted (In-Court) Application of Section 145

  • It was argued that the sub-sections (a), (b) and (c) of Section 145 refer in terms to classes of surety bonds taken before the Court under the provisions of the Code; therefore, the section should be limited to bonds entered into in the face of the Court or recorded by the Court.
  • Practical experience (as noted by the Judge) suggested that proceedings under Section 145 had generally not been taken in respect of surety bonds given outside Court.
  • Earlier decisions under the Old Code were interpreted to indicate that bonds taken outside Court were not within the scope of analogous provisions (see discussion of cases under Section 204 of Act VIII of 1859 and related rulings).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Lakshmi Narain Khanna v. Guru Datta Mehra (Calcutta High Court) Holds that Section 145 does not require the surety's liability to have arisen by an application to the Court or by a bond filed in the proceedings; the section should not be limited to liabilities that are a matter of record. The opinion records this decision as being "against the appellant" and notes the case involved execution being stayed by the Court and the debtor released on security given outside Court. The Court here contrasted that case's facts with the present facts (where no court order had been passed) and expressed disagreement with its reasoning.
Thirumalai v. Ramayyar (reported reference: 16 Ind. Cas., 859 / 13 Mad., 1 context) Applied the Old Code provision (Sect. 253) to permit execution against sureties where the obligation was contracted "before the Court" and regarded the surety's obligation as a matter of record, obviating the need for a fresh decree against the surety. The opinion notes this decision as supporting the view that execution could be had against sureties whose obligation was entered into in the course of or recorded by the Court. The Court observed that this reasoning is inconsistent with the wide interpretation in the Calcutta decision but is not inconsistent with the actual decision in 16 Ind. Cas., 859.
Babu Ram Kishen Doss v. Hurkhoo Singh Treated as assuming that Section 204 (Act VIII of 1859) applied to cases of sureties arising under provisions corresponding to Sections 76 or 83 of the Code. The opinion cites it as one of the earlier authorities under the Old Code considered when examining whether post-judgment or outside-Court bonds fall within analogous sections; this case was treated as an assumed application but not decisive on the present point.
Gajendra Narayan Roy v. Hemangini Dasi Holds that a security bond entered into subsequent to a judgment cannot be enforced under Section 204 (Act VIII of 1859). The opinion cites this case as authority supporting the proposition that bonds entered into after judgment (and by implication outside Court procedures) were not enforceable under the Old Code provision analogous to the present Section 145.
Abdul Karim v. Abdul Huque Kazi (Calcutta High Court) Distinguished earlier cases and indicated that bonds taken outside the Court were not within Section 204; held that a bond given subsequent to judgment, in the particular facts, could not be enforced under Section 204. The opinion treats this decision as an indication of the Calcutta High Court's view that outside-Court bonds are not within the scope of the relevant section; it is used to show conflicting rulings under the Old Code.
16 Ind. Cas., 859 (cited reference) Referenced as a decision consistent with the reasoning in Thirumalai v. Ramayyar (supporting execution against sureties where obligation is entered into before the Court). The opinion observes that the reasoning in Thirumalai is not inconsistent with the decision reflected in 16 Ind. Cas., 859; used to demonstrate that authorities are not uniform.

Court's Reasoning and Analysis

The Court's analysis proceeds in a sequence that may be summarized as follows, relying solely on the statements in the opinion:

  1. Textual inquiry: The judge first observed that the language of Section 145 CPC is wide enough, on its face, to include surety bonds taken by a decree-holder outside Court.
  2. Examination of sub-sections: The Court then examined sub-sections (a), (b) and (c) of Section 145 and demonstrated how each sub-section corresponds to specific procedural provisions of the Code that typically involve formal court processes:
    • Sub-section (a) ("for the performance of any decree or part thereof") corresponds to a provision for staying execution under Order 41, Rule 5, Clause 3(c), where security is given for due performance of a decree or order.
    • Sub-section (b) ("for the restitution of any property taken in execution of a decree") corresponds to Order 41, Rule 6, which contemplates the Court taking security for restitution of property sought to be taken in execution.
    • Sub-section (c) ("for the payment of any money … under an order of the Court in any suit or in any proceedings consequent thereon") corresponds, inter alia, to Order 38, Rule 2, Clause (2) (surety for appearance) and to conditions for stay of execution under Order 21, Rule 26, Clause (3), and to realisation of security in insolvency-type proceedings under Section 55(4).
  3. Legislative-historical comparison: The judge contrasted Section 145 with the earlier Old Code provisions (e.g., Section 253 of the Old Code and Section 204 of Act VIII of 1859), noting differences in wording and the kinds of cases that arose under those older provisions.
  4. Survey of authorities: The opinion reviews divergent decisions from various High Courts and prior cases under the Old Code, finding inconsistent rulings — some decisions (e.g., certain Calcutta High Court decisions) suggest a wide interpretation permitting enforcement of outside-Court bonds, whereas other decisions (and one Madras decision) suggest confinement to bonds given in Court or before the Court.
  5. Practical and purposive consideration: The judge observed the practical context — that proceedings under Section 145 "have not generally been taken in respect of surety bonds not given before the Court" — and emphasized the object of the section: to allow execution against a person who is not a party to the suit or a legal representative.
  6. Conclusion of construction: Balancing the textual width of Section 145, the specific references in its sub-sections to in‑Court procedures, the conflicting authorities, and the purpose of the section, the judge concluded it is "more proper to confine it to cases where the liability has been entered into in the face of the Court or has been recorded by the Court in accordance with the provisions of the Code."
  7. Result: Applying this interpretation to the facts of the present case (where the bond was given to the decree-holder outside Court and no Court order had been passed at all), the Court held that Section 145 did not apply and therefore allowed the Second Appeal, restoring the District Munsif's judgment.

A concurring judge (Sadasiva Aiyar, J.) expressly endorsed the result and added that he disagreed both with the reasoning and the outcome in Lakshmi Narain Khanna v. Guru Datta Mehra, observing that even where a Court had stayed execution after being informed of security given outside Court, that did not authorise realisation of such security in execution; the only security that could be so realised is security furnished to the Court or at least filed in Court.

Holding and Implications

Holding: Civil Miscellaneous Second Appeal SUCCEEDS. The Court ordered that the judgment of the District Munsif be restored and awarded costs here and in the Lower Appellate Court.

Immediate consequences for the parties:

  • The decree-holder cannot proceed to execution under Section 145 CPC against the surety in this case because the surety bond was taken outside the Court and no in‑Court order recording or accepting that bond was made.
  • The District Munsif's original decision (which confined the application of Section 145 in the circumstances of this case) is restored, and the order of the District Judge (which had allowed execution to proceed on the basis of a general application of Section 145) is set aside.

Broader implications: The Court's reasoning confines the application of Section 145 to circumstances where the liability of the surety has been entered into in the face of the Court or recorded by the Court in accordance with the Code. The opinion highlights conflicting precedents and emphasizes a purposive construction tied to the procedural provisions referenced by the sub-sections of Section 145. The Court did not purport to establish an exhaustive precedent resolving all possible factual permutations; rather, it applied its interpretive conclusion to the facts before it.

Disposition (as stated in the opinion): "The Civil Miscellaneous Second Appeal Succeeds and the judgment of the District Munsif must be restored, with costs here and in the Lower Appellate Court."

Show all summary ...

Napier, J. — The sole question raised in this Second Appeal is whether Sect. 145 of the Code of Civil procedure applies to surety bonds taken by the judgment-creditor outside Court. The counter-petitioner in the case executed a surety bond in favour of the plaintiff in O. S. No. 110 of 1913 in the Court of the District Munsif of Tiruturaipundi in consideration for which the plaintiff-petitioner stayed execution of his decree against the defendant. He now seeks execution of the decree against the surety, and objection is raised that Sect. 145 does not apply. The District Munsif held that Sect. 145 applies to cases in which the surety bond was put into Court before final orders were passed on the prior execution petition. The District Judge on appeal held that the section is of general application and allowed execution to proceed. It is somewhat remarkable that the exact point has not been decided before now, and it seems to be generally admitted that the proceedings under this section have not generally been taken in respect of surety bonds not given before the Court. My learned brother who has an unrivalled experience in these matters tells me that he has never known of such an application. It cannot be denied, however, that the language of the section is wide enough to include such surety bonds. But it is argued that the Sub-Sects, (a), (b) and (c), which describe the classes of surety bonds affected by the section, all in terms refer to bonds taken before the Court under the provisions of the Code and that therefore the application of the section must be so limited. Sub-Sect, (a) “for the performance of any decree or part thereof” would certainly apply to a provision for staying execution, under O. 41, R. 5, cl. 3 (c), on the appellant giving security for the due performance of such decree or order as may ultimately be binding on him. Sub-Sect. (b) “for the resolution of any property taken in execution of a decree” undoubtedly applies to O. 41, R. 6, which requires the Court which passed the decree on sufficient cause being shown by the appellant to take security from the respondent for the restitution of any property which he seeks to take in execution of the decree. Sub-Section (c) “for the payment of any money……… under an order of the Court in any suit or in any proceedings consequent thereon” in terms applies to O. 38, R. 2, cl. (2), namely, “Every surety for the appearance of a defendant shall bind himself in default of such appearance to pay any sum of money which the defendant may be ordered to pay in the suit.” In the same Sub-Sect, (c), the words “for the fulfilment of any condition imposed on any person under an order of the Court, etc.,” would in terms apply to any condition for the stay of execution imposed under O. 21, R. 26, cl. (3), and also to a realisation of security in default of a judgment-debtor applying to be made insolvent under Sec. 55, Sub-Sect. (4). In all these cases, the security might contain a surety bond and the bond would of course be given before the Court. Sub-Sections (b) and (c) in Sect. 145 are new. The corresponding section of the Old Code, Sect. 253, ran as follows: “Whenever a person has before the passing of a decree in an original suit becomes liable as surety for the performance of the same or any part thereof, the decree may be executed against him to the extent to which he has rendered himself liable, in the same manner as a decree may be executed against a defendant.” The same question would therefore arise on the construction of this section, but the only cases dealing with this section are those that raised the question whether the words “before the passing of a decree in an original suit” apply to a suretyship for the due performance of appellate decrees on which there was a difference of opinion in the different High Courts of this country.

There is a decision of the High Court of Calcutta reported in Lakshmi Narain Khanna v. Guru Datta Mehra(1), which is against the appellant. In that case a warrant was issued for the arrest of a judgment-debtor which was directed to be stayed if the judgment-debtor furnished security. The judgment-debtor was arrested and brought before the Court. Then the following entry was made in the order sheet: “The judgment-debte has been brought after being arrested. The decree-holder's pleader states that the judgment-debtor's father-in-law has deposited with him Government Promissory Notes of the value of Rs. 2,000 as stated in his petition, as security for the decretal amount; so he asks the Court to release judgment-debtor from custody. The judgment-debtor is released.” The decree-holder applied for execution against the surety and prayed that the promissory notes in his custody might be sold. Objection was taken that Sect. 145 was not applicable, because the appellant did not become surety by an application to the Court or by a bond filed in the proceedings. The Bench held that the section does not provide that this liability must have accrued upon an application presented to the Court or a surety bond filed in the proceedings and proceeds as follows: “We cannot limit the application of the section to cases where the liability of the surety is undisputed or is a matter of record.” The facts of this case, however, show that execution was stayed under an order of the Court and the debtor released on the security being given although the security was certainly taken outside Court. In the present case no order has been passed by the Court at all, so that although the language of the Judges seems wide enough to cover the present case and though they specifically decide that the security need not be taken before the Court, there is still the difference that it was the Court that stayed its hand and not the decree-holder. In Thirumalai v. Ramayyar, the main question was whether Sect. 253 of the Old Code could be availed of where security had been given on behalf of the respondent to an appeal under Sect. 546 of the Code for the due performance of the decree, that is, under O. 41, R. 6 of the present Code. The Court held that execution could be had against the sureties and used the following language: The obligation which the surety undertakes is an obligation to fulfil the decree which may be passed against the defendant or appellant in the original suit or in appeal, and the obligation is contracted before the Court and is as much a matter of record as the decree undertaken to be fulfilled. There is no apparent reason for directing the successful party to obtain a fresh decree against the surety………whilst the very obligation is to fulfil the decree against the defendant or appellant.” The reasoning of the Court here is inconsistent with the contention of the respondent and with the wide language in Lakshmi Narain Khanna v. Guru Datta Mehra(2) but is not inconsistent with the actual decision in 16 Ind. Cas., 859. Then there were some decisions under Sect. 204 of Act VIII of 1859, which were as follows:—“Whenever a person has become liable as surety for the performance of a decree,” “etc.,” which section it is to be noted, has not got the words in Sect. 253 of the Code of 1882, “before the passing of the decree in an original suit.” In a case reported in Babu Ram Kishen Doss v. Hurkhoo Singh(3), it seems to have been assumed that Sect. 204 applies to cases such as that of parties who become sureties under Sect. 76 or 83 of the Code. In Gajendra Narayan Roy v. Hemangini Dasi, it is held that a security bond entered into subsequent to a judgment cannot be enforced under Sect. 204. These two cases were considered by the High Court of Calcutta in a later decision reported in Abdul Karim. v. Abdul Huque Kazi. There the judgment-debtor had been arrested upon a warrant in execution of a decree and applied for his discharge on the ground that he had no means of paying the debt. He was released on a bond given to the Munsif by two sureties, under a provision corresponding to Sect. 55, Sub-Sect. (4) of the present Code. The Munsif held that as the bond was given subsequent to the judgment, it could not be enforced under Sect. 204. The Court distinguished the two prior cases in 7 Weekly Reporter 329 and 13 Weekly Reporter 35 on the ground that the liability of the surety in those two cases did not arise in the course of or out of proceedings in the suit but upon distinct and independent contracts made between the sureties and the creditor and seemed to be of opinion that in such circumstances the section would not have been applicable. It is to be noted however that the decision of the two earlier cases did not go on this question at all. But this is an indication of the view of the Court that bonds taken outside the Court are not within the section. The position then is that there are contradictory rulings under the Old Codes in the Calcutta High Court and language in a modern decision by the High Court of Calcutta which is against the appellant, whereas the language in 13 Mad., 1 seems to be in his favour. I find it impossible to express a confident opinion on the point. But as at present advised, I think that considering that the language of the various sub-sections can be referred to specific provisions of the Code, and considering that the object cf the section is to allow execution against a person who is not a party to the suit or legal representative, it is more proper to confine it to cases where the liability has been entered into in the face of the Court or has been recorded by the Court in accordance with the provisions of the Code.

The result will be that the Civil Miscellaneous Second Appeal Succeeds and the judgment of the District Munsif must be restored, with costs here and in the Lower Appellate Court.

Sadasiva Aiyar, J.—I agree and only wish to add with the greatest respect to the learned Judges who decided the case in Lakshmi Narain Khanna v. Guru Datta Mehra that I agree neither with the reasons for the decision nor with the actual decision, even having regard to the peculiar facts of that case. I do not think that the fact that the Court itself stayed execution on the report made to it of security having been given outside the Court would enable the Court to allow the security to be realised in execution. The only security which could be so realised is one to be furnished to the Court or at least filed in Court.

K. V. S.Appeal allowed.