Chellam Servai v. Ramalingam Servai.

This revision petition raises for consideration a very interesting question of execution law.

The petitioner was the 2nd defendant in O.S. No. 139 of 1943 on the file of the District Munsif's Court of Manamadurai, the 1st defendant his undivided father having died, alter the institution of the suit. The suit was decreed on 21 at August 1943, But even before this date the plaintiff had attached certain moveable property belonging to the 2nd defendant and this was left in the custody of two persons who entered into a security bond to produce the moveables when called upon or to pay their value which was about Rs. 720-8-0. This attachment became absolute after the obtaining of the decree and the decree-holder became entitled to enforce the obligation of the third party surety. The first application for execution after the decree was obtained was E.P. No. 230 of 1944, which was filed to direct the sureties to produce the moveables entrusted to their care and for the sale of the moveables when produced. The sureties did not produce the property and this petition was closed on 30th October 1944. E.P. No. 394 of 1944 was the next petition in execution and that was for the issue of a warrant of arrest of the two sureties. Though the warrant was issued, the sureties could not be found with the result that the petition was closed on 29th January 1945. The next applications were also of a similar nature. E.P. No. 68 of 1945 was for the arrest of the second surety and it was ordered. But no batta was paid and the petition was dismissed on 25th July 1945. E.P. No. 49 of 1946 was an application for an identical relief against the same individual and was dismissed for the same reason on 25th March, 1946.

The decree-holder then turned his attention to the judgment debtor the 2nd defendant. E.P. No. 182 of 1946 was filed for attachment and sale of his immoveable properties and his properties were attached. On payment of Rs. 1010-8-11 on 16th July 1947 and of Rs. 500 on 26th August 1947 part satisfaction entered the sale was not proceeded with and the petition was dismissed on 19th September 1947. E.P. No. 125 of 1948 was the next execution petition. The properties which were attached in pursuance of E.P. No. 182 of 1946 were brought to sale and by reason of a payment of Rs. 220 on 24th August 1948 by the 2nd defendant, part satisfaction was recorded and the petition was dismissed on 30th August 1948. The decree-holder then proceeded against the sureties and for this purpose filed E.P. No. 144 of 1950 for the arrest of both of them. As they could not be found the petition was dismissed on 15th June 1950. On 13th July 1953 the decree holder filed E.P. No. 194 of 1953 from the order against which this present revision is brought, for the recovery of about Rs. 750, being the balance of the decree amount from the 2nd defendant.

The question is whether this petition E.P. No. 194 of 1953 is in time. It would be in time if the decree-holder's application for the arrest of the sureties, i.e., E.P. No. 144 of 1950 which was dismissed on 15th June 1950 kept alive the decree as against the judgment debtor also.

It might be mentioned that the 2nd defendant (judgment debtor) raised two objections to the maintainability of this petition. The first was that his property which had been attached before judgment had been entrusted to a person who was a close friend and relation of the decree-holder that there was collusion between the sureties and the decree-holder and that for these reasons the Court should hold that to the extent of the value of the property entrusted to the sureties the plaintiff must be deemed to have received satisfaction of his decree. The second was that the execution petition was time barred. The Court below did not consider the first objection seriously and does not refer to it in its order. As regards the second, the District Munsif held that an execution against a surety is either execution of the decree or at least a step-in-aid of execution of that decree and therefore saved limitation under Art. 182(5) of the Limitation Act and on this reasoning he allowed the execution to proceed. Against this order the 2nd defendant (judgment debtor) has filed the revision in this Court.

Mr. Sundaram Aiyar urged both the objections put forward in the Court below. I do not however see any point in the first that the entrustment of attached moveables to a person suggested by the plaintiff is tantamount to a part satisfaction of the decree to the extent of the value of that property. Learned Counsel was not clear as to the legal basis upon which such an argument could be founded and in my judgment this contention does not merit serious consideration. The next point however namely whether the execution petition E.P. No. 194 of 1953 is within time has given me considerable difficulty. The learned District Munsif has over-simplified the matter by taking it for granted that every execution petition filed against a surety for any purpose is tantamount to an execution of the decree or a step-in-aid of the execution of that decree within the meaning of Art. 182(5) of the Limitation Act.

I do not propose to deal with the entire case law on the topic—and indeed learned Counsel on either side have not done so either—but merely summarise the position as it has emerged from the decisions. The whole question turns on whether the application against the sureties was “an application in accordance with law to the proper Court for execution or some step-in-aid of execution of that decree or order” within Art. 182(5) of the Limitation Act. Explanation (1) to this Article reads:

“Where the decree or order has been passed severally in favour of more persons than one, distinguishing portions of the subject matter as payable or deliverable to each, the application mentioned in Cl. 5 of this Article shall take effect in favour only of such of the said persons or their representatives as it may be made by. But where the decree or order has been passed jointly in favour of more persons than one, such application, if made by any one or more of them, or by his or their representatives, shall take effect in favour of them all. Where the decree or order has been passed severally against more persons than one, distinguishing portions of the subject matter as payable or deliverable by each, the application shall take effect against only such of the said persons or their representatives as it may be made against. But, where the decree or order has been passed jointly against more persons than one, the application if made against any one or more of them, or against his or their representatives, shall take effect against them all.”

All the decisions are uniform in this respect that a surety for the performance of a decree is not a joint debtor or one jointly liable under a decree within the meaning of the explanation. The decision in Narayan v. Timmayya (31 Bom. 50)which is a leading authority on this point has been accepted practically by all the Courts as correct so far as it lays down this proposition. The explanation being out of the way the question is whether an execution petition filed against a surety is or is not an application for the execution or for taking some step-in-aid of execution of the decree or order. The authorities which I shall be referring to presently establish that if the remedy pursued against a surety is in effect for the execution of the decree, that is the decree against the judgment debtor, such a petition is comprehended within Art. 182(5) of the Limitation Act and would keep the decree alive to permit of further execution against other persons liable under the decree and against their properties. But if the proceeding against the surety, having regard to the nature of the obligations undertaken by him in any particular case does not amount to an execution of the decree passed in the suit and which is sought to be executed against the judgment debtor, the two proceedings so to speak run on parallel lines and the one does not serve as a further starting point or a step-in-aid to the pursuit of the other. It is in this context that the terms of S. 145, C.P.C. assume considerable importance. That provision in the form in which it has taken under the Act of 1908 provides for three sets of cases: viz., (a) for the performance of and decree or any part thereof, or (b) for the restitution of any property taken in execution of a decree or (c) for the payment of any money or for the fulfillment of any condition imposed on any person, under an order of the Court in any suit or in any proceedings consequent thereon. In these three contingencies the decree or order may be executed against the surety to the extent to which he has rendered himself personally liable in the manner provided for the execution of decrees. By virtue of this provision therefore in the cases provided by three Sub-Cls. (a) to (c) the decree holder proceeds against the surety really for the execution of the decree—to the extent to which he has rendered himself personally liable. Though S. 145, Civil Procedure Code, does not make the surety a joint debtor so as to bring him within the explanation to Art. 182(5) of the Limitation Act, a similar result is achieved by the identification of the decree passed against the judgment debtor, with the liability under the security bond—to the extent to which the surety has rendered himself liable in the three sets of cases provided for by S. 145. When these conditions are satisfied it would logically follow that an execution petition under S. 145, Civil Procedure Code, against a surety would keep alive the decree as against the judgment debtor and vice versa also that is execution against the principal (judgment debtor) would keep alive the decree so far as the surety is concerned. The short point I have to consider in the present case is whether if the obligation of a surety does not fall within S. 145 the same result would or could follow.

The decision of the Allahabad High Court in Muhammad Hafiz v. Muhammad Ibrahim (43 All. 152)and its further elucidation in Baddruddin v. Muhammad Hafiz (44 All. 743)arising out of the same matter both of which have been followed by a Bench of this Court in Gangaraju v. Subbayya (68 M.L.J. 119=58 Mad. 276=41 L.W. 148) might be a good starting point for commencing the discussion on the topic. In Muhammad Hafiz v. Muhamamad Ibrahim (43 All. 152) the Court had to consider a situation where a surety who had made himself liable for the satisfaction of a decree had been proceeded against by the decree holder and not having succeeded in recovering the decree amount sought execution subsequently against the principal—the judgment debtor. It was held that the execution against the surety kept alive the entire decree such that the decree holder could within three years thereafter proceed against the judgment debtor. The lower appellate Court held the application time barred on the ground that an execution petition for the arrest of the surety could not keep the decree alive for execution against the judgment debtor. The argument of learned Counsel for the decree-holder was that having regard to the comprehensive nature of the liability undertaken by the surety in that particular case it was practically a case of joint and several liability as between the judgment debtor and the surety. The learned Judges dealing with this aspect of the matter referred to the nature of the liability which the surety had undertaken. They said:

“They (the sureties) also bound themselves to satisfy the entire decree, as it might stand after the decision of the second appeal by this Court in the event of Muhammad Ibrahim (Judgment debtor) failing to do so.”

The learned Judges then referred to the provisions of S. 145 Civil Procedure Code, which provided for a remedy by way of execution against a surety who had bound himself to satisfy a decree after the decree was passed. They went on to add:

“The case of such a surety does not seem to be covered on any part of Explanation 1 to Art. 182 of the First Schedule to the Limitation Act” —which was just the conclusion which had been reached by the Bombay High Court in Narayan v. Timmayya (31 Bom. 50). The learned Judges added:

“The decree itself affects Muhammad Ibrahim, but Muhammad Hussain (surety) has become liable to be proceeded against in execution by reason of the special provisions of S. 145 Civil Procedure Code.”

The learned Judges posed the question:

“does an application asking the proper Court to execute the entire decree by the arrest of the person of a surety who has made himself liable for the satisfaction of the decree amount to asking the execution Court to a take step-in-aid of the execution of the decree as against the principal whose liability the surety has taken upon himself?”

and the answer was in the affirmative. The decision in Baddruddin v. Muhammad Hafiz (44 All. 743) arose out of the same facts and was an appeal by a cosurety in the same surety bond. On the reasoning of the Court in Mohammad Hafiz case (43 All. 152), that the execution against the surety was an execution of the decree under Art. 182(5) the decision had to be against the cosurety as well, who was bound under the same decree and under the same order. The learned Judges held that the previous application was an application in accordance with law to the proper Court for execution of the decree. These two decisions were followed by this Court in preference to the views which prevailed in Bombay, Rangoon and Patna in Gangaraju v. Subbayya (68 M.L.J. 119=58 Mad. 276=41 L.W. 148). In this case the surety was one for the satisfaction of the decree by the judgment debtor [one within S. 145(a) C.P.C.] The earlier execution petitions were filed against the judgment debtor and when these were unavailing to realise the decree the decree-holder sought to proceed against the surety. The learned Judges held that the application against the surety was in time. They said:

“We agree with the Allahabad view that Explanation I does not contemplate a case of this kind at all and therefore that Cl. (5) of Art. 182 itself is the only provision by which this question of Limitation must be determined. They proceeded to add that in the case of a surety it was proper that the creditor should exhaust the principal debtor before proceeding against the former and on this ground also held that the procedure adopted by the decree-holder in that case was in accordance with natural justice. This decision therefore by itself does not assist the respondent here. In Bechehu Singh v. Radhelal (A.I.R. 1937 Oudh 351), the surety came on the scene alter the decree and made himself liable for the entire decree amount for which he could be proceeded against under S. 145(a), C.P.C. The earlier execution petitions were against the surety and the question was whether the subsequent execution petition against the judgment debtor was saved by the earlier ones, and was answered in favour of the decree-holder. The learned Judges held that Explanation (1) to Art, 182 could not be applied because the liability of the surety emerged after the passing of the decree whereas the explanation contemplated cases where the decree itself is passed against more than one person. They also held that S. 145, C.P.C., which entitles the decree-holder to execute the decree against the sureties cannot make the sureties joint debtors if they were not parties to the suit at the time when the decree was passed. They were therefore left to consider whether under Art. 182(5) the execution against the surety was an execution of the decree which was subsequently sought to be executed against the judgment debtor or at least was a step-in-aid of execution of such a decree. They answered the question thus:

“The proceedings taken by the decree-holder for realisation of part of the decree-tal debt from the surety Muneshar Singh were clearly proceedings in furtherance of the decree. The judgment debtor would have had the benefit in execution proceedings of any money realised by the decree-holder from the surety. In the circumstances, there can be no doubt that the applications made by the decree-holder against Muneshar Singh (surety) from time to time were steps-in-aid of execution of the decree. The case therefore is literally covered by the terms of Cl. (5).”

I have to add one observation in regard to the reasons above set out and that is the fact that the moneys realised from the surety would go in reduction of the decree amount is not Very material for the consideration of this question. [ Vide Vyravan Chetti v. Rayalu Ayyar Nagaswami Ayyar & Co. (1951) 1 M.L.J. 298=64 L.W. 824),]The Lahore High Court had to consider a similar question in Kishan Singh v. Prem Singh (A.I.R. 1939 Lah. 687). The surety here bound himself to pay the entire decree amount and therefore was within S. 145(a), C.P.C. The earlier proceedings were as in the Oudh Case first against the surety and subsequently against the judgment debtor. The learned Judges held that execution against the sureties kept the decree alive as against the principal debtor. The decision in Baddruddin v. Muhammad Hafiz (44 All. 743), and the decision of this Court in Gangaraju v. Subbayya (68 M.L.J. 119: 58 Mad. 276=41 L.W. 148), were referred to with approval and the later execution proceedings held to be in time. The Bombay High Court had to consider the converse case in Vyasarao v. Ramachmdra (A.I.R. 1945 Bom. 489). The suretyship here extended to the entire decree amount [S. 145(a) C.P.C.]. The earlier execution applications were against the judgment debtor and the one in controversy before the Court was against the surety and the legal representative of the deceased judgment debtor. The learned Judges held that Narayan v. Timmayya (81 Bom. 50) was correct law in so far as it ruled that a surety was not within Explanation (1) to Art. 182(5) of the Limitation Act but they distinguished that decision on the ground that the applicability of the main provision in Art. 182(5) was not considered and alter dealing with the language of this Article and following the Allahabad and Madras decisions held the application for execution to be in time. But as I have remarked already, the surety there was one who fell within S. 145(a), C.P.C. and therefore the decree as such could be executed as against him. In the last of the series of the cases in this branch of law, it is necessary to refer to another decision of the Bombay High Court in Bhavaniprasad v. Naranibai (A.I.R. 1948 Bom. 13). There also the surety bond was for the satisfaction of the decree that might be passed as against the judgment-debtor though the sum payable by the surety was limited to Rs. 4500 whereas the decree which was passed subsequently was for Rs. 5500 and odd. The earlier execution petitions were taken against the principal debtor and the one in dispute was against the surety. The learned Judges following the decision in Vyasarao v. Ramchandra (A.I.R. 1945 Bom. 489), held that the decree was kept alive by reason of the step-in-aid in execution of the decree and could be enforced against the surety. I do not propose to refer to other decisions of this type. These do not travel beyond affirming that where there is a surety for the performance of a decree or any part thereof, an application for execution either against the judgment-debtor or the surety is an application for the execution of the same decree.

The difficulty however in the present case is that the surety is not one whose obligation is comprehended within any of the three classes of cases provided for by S. 145, C.P.C. So far as this aspect of the matter is concerned there are two decisions of this Court which bear upon it. The first is a decision of a Bench in Sankunni Variar v. Vasudevan Nambudripad (51 M.L.J. 239=24 L.W. 300). There also, as here, some moveables belonging to the judgment-debtor was attached but on his intercession the sale was adjourned. The attached property was delivered to certain sureties who executed a bond undertaking to produce the property when called upon. The sureties did not produce the property and in consequence the sale which the decree-holder desired to effect could not take place. The decree-holder filed an application to enforce the liability of the sureties by arresting them. The question was whether this could be done in execution or whether the decree-holder had to proceed by way of a suit after getting the security bond assigned in his favour. The learned Judges referred to the decision of the Privy Council in Raj Raghubar Singh v. Jai Indra Bahadur Singh (42 All. 158=13 L.W. 82 (P.C.) and stated:

“This is certainly authority for the proposition that although the case does not come within the terms of S. 145, the Court has the inherent power to enforce its bond without recourse to a suit.

In the present case it is contended that S. 145 is applicable because the sureties had become liable under Cl. (c) for the payment of money under an order of the Court in any suit or in any proceeding consequent thereon. This contention must be negatived for the liability under S. 145 attaches only in the case of a person who is surety for the payment of any money under an order of the Court and not a surety liable to pay owing to default. In this case there was no order of the Court directing payment o f any money by the judgment-debtor and consequently the sureties were not sureties for such payment.”

The learned Judges went on to add that the Court had inherent power to enforce the security bond apart from the provisions of S. 145. I will next refer to the decision of Jamnudas Bavuji Sait v. Krishnan (65 M.L.J. 507=38 L.W. 450). The learned Judge had to consider a case converse to the present one—where the earlier execution was against the judgment-debtor, the subsequent one being against surety. After attachment of certain moveables in execution of a decree they were left in the possession of two sureties who executed a bond for their production, agreeing that if default were made in the production of the properties the sureties would be liable for the loss that might be sustained thereby. In other words the sureties did not make themselves liable for the decree amount. The District Munsif found that the applications against the judgment debtor for execution of the decree did not keep it alive against the sureties for the enforcement of the terms of that bond, a decision which was affirmed by the District Judge on appeal. The learned Judge (Walsh, J.,) held himself bound by the decision in Sankunni Variar v. Vasudevan Nambudripad (51 M.L.J. 239=24 L.W. 300), to hold that the case did not come within S. 145:C.P.C., though the surety might be proceeded against in execution under S. 151, C.P.C. In this view he held:

“Steps therefore taken in execution against the judgment debtor are not steps against the sureties nor are steps in execution against the sureties, steps in execution of the decree itself. There is no authority at all to the contrary and the injustice and anomalies of any doctrine which would render steps in execution against the judgment debtor steps against the sureties, who have only agreed to produce certain articles attached in execution are obvious.”

The learned Judge referred to the injustice of holding that steps taken against the judgment debtor could save limitation against the surety and corrected himself against having decided the converse case, for the learned Judge said:

“It is unnecessary to consider the converse whether steps taken against the sureties will be steps against the judgment debtors to save limitation.”

This decision therefore notwithstanding the reservation I have referred to is an authority in favour of the petitioner, and I do not consider that its correctness has been shaken by the decision of the Bench in Gangaraju v. Subbayya (68 M.L.J. 119=58 Mad. 276=41 L.W. 148), which dealt with a case of a surety who had rendered himself liable to be proceeded against for the performance of the decree.

In connection with the last point I might refer to the decision of Kuppuswami Aiyar, J., in Annamalai Chettiar v. Sundaresa Aiyar (1943) 2 M.L.J. 444=56 L.W. 632), which has been specifically approved by a Bench of this Court in Ramamurthi v. Tirupatiraju (1948) 2 M.L.J. 287 at 290=61 L.W. 606). A security bond was executed by the sureties to whom the judgment debtor's moveable properties were entrusted when they were attached in execution of a decree. This bond was executed on 13th August 1934. The execution petition in the course of which this bond was executed was struck off on 24th November 1934. The petition to enforce the security bond was filed on 12th December 1938. In the meantime however the decree-holder had filed applications against the judgment debtor for attachment and sale of other properties belonging to him. The District Munsif dismissed the execution petition against the sureties on the ground that it was barred by limitation as it was filed more than three years after the date on which the sureties failed to produce the article and a right to enforce the security bond accrued to the decree-holder, a decision which was affirmed on appeal by the Subordinate Judge. The learned Judge dismissed the second appeal holding that the execution application against the surety was not for the execution of the decree which was being executed against the judgment debtor but only for the enforcement of the liability which arose out of the bond. The decision of Walsh,]., in Jamnudas Ravuji Sait v. Krishnan (65 M.L.J. 507=38 L.W. 450), was followed and holding that the proper Article of limitation for the enforcement of this right was Art. 181 it was held that the execution petition was barred by limitation and that the application for execution against the judgment debtor could not keep alive the right to enforce this order as against the surety. The ratio of the decision is to be found in the passage:

“it is not in execution of decree that the claim is sought to be enforced as against the surety. When the judgment debtor's properties were attached they must have been left in the custody, of the Court. The Court delivered them to the sureties because they executed a security bond. It is that security bond which is sought to be enforced by the Court at the instance of the decree-holder. It is the liability under the security bond that is sought to be enforced. In Madras this could be done in the execution proceeding itself by a summary procedure which enables the decree holder to realise the amount payable under the bond (evidently referring to 51 M.L.J. 239). I therefore do hot think that this could be considered to be an execution petition for the execution of the decree, though the summary remedy arises by reason of the bond executed to the Court in the course of the execution proceedings.”

It is unnecessary to refer to the facts of the decision of the Bench in Ramamurthi v. Tirupathiraju (1948) 2 M.L.J. 287 at 290=61 L.W. 606). It is sufficient to mention that the decision of Walsh J. in Jamnudas Ravuji Sait v. Krishnan( 65 M.L.J. 507=38 L.W. 450), and Kuppuswami Aiyar J. in Annamalai Chettiar v. Sundara Aiyar (1943) 2 M.L.J. 444=56 L.W. 632), were referred to with approval as deciding that in such cases the proper Article of limitation in the matter of enforcement of the liability of the sureties in such bonds is Art. 181 and not Art. 182 which applies to the execution of the decree passed in the suit. There are some decisions of other High Courts which appear to favour the view that a surety as in the present case—for the production of moveable property entrusted to his custody and in default to pay the value as recited in the bond—is a surety who satisfies the requirements of S. 145(b), C.P.C. I am unable to agree with this view because assuredly in such a case there is no principal debtor for whom the person who has executed the bond has become surety and moreover the decisions of this Court have uniformly held that this condition has to be fulfilled before the executant of the security bond could be deemed to be a surety within S. 145(b), C.P.C. These decisions are binding upon me and I do not therefore propose to discuss this question in any detail and will proceed upon the footing that the surety in the present case is not within S. 145 though according to the practice in this State following Sankunni Variar v. Vasudevan Nambudiripad ( 51 M.L.J. 239=24 L.W. 300), the remedy by way of execution is open in the event of a default on the part of the surety.

If then the obligations of the surety and his liability to make good the amount of the bond arise independently of the decree, it follows that an application for execution of that liability is not an application for the execution of the decree passed in the suit and which is being executed against the judgment-debtor. In my opinion the principle of the decision in Gangaraju v. Subbayya ( 68 M.L.J. 119=58 Mad. 276=41 L.W. 148), that an execution against either a surety or a judgment-debtor is an execution or step-in-aid of execution as against the other, applies only to cases where the surety is one against whom the decree passed in the suit may be executed, in other words, to a surety to whom S. 145, C.P.C. directly and in terms applies. In the case of other “sureties” such as the one we have in the present case there is so to speak a separation of the obligations of the two parties. The liability of the judgment-debtor is under the decree and the liability of the “surety” is not under the decree but under a bond which he has executed in a collateral and ancillary transaction. If in the present case the judgment-debtor had satisfied the entire decree by payment of the decree amount, he could undoubtedly have proceeded to execute the security bond and the obligations arising under it against the surety. This itself shows that what is sought to be enforced against the surety is not an obligation under the decree but one de hors the decree, though, if any sum were recovered by the decree-holder by proceeding against the surety, it would so in reduction of the decree.

Before concluding it is necessary to notice an argument advanced by learned Counsel for the respondent that E.P. No. 144 of 1950 should be deemed to be an application for the execution of the decree in O.S. No. 139 of 1943 for the reason that it sought reliet against the moveables of the judgment-debtor. But unfortunately the facts do not permit any such contention. The moveables of the judgment-debtor being dooned to have been attached in execution of the decree after it was passed, if an application were filed for directing the executants of the security bond to produce these articles and for their sale when produced, such an application would undoubtedly have been one for the execution of the decree. Such application would have been against the judgment-debtor also and he would have been impleaded as party thereto. E.P. No. 230 of 1944 was such an application. E.P. No. 144 of 1950 however was merely for the arrest of the sureties and not for sale of the moveables belonging to the judgment-debtor. The relief sought was therefore against the executants of the security bond to enforce their obligation under the bond and not a proceeding against property belonging to the judgment-debtor. In my opinion therefore the proceedings in E.P. No. 144 of 1950 could not be deemed to be an execution of the decree in O.S. No. 139 of 1943.

In my judgment therefore the execution petition. E.P. No. 144 of 1950 was not an application for the execution of or a step-in-aid of the execution, of that decree which is sought to be executed in E.P. No. 194 of 1953. The later application having been filed more than three years after the disposal of the last application for execution of the decree in O.S. No. 139 of 1943 is clearly barred by limitation.

The revision petition is allowed and the execution petition is dismissed with costs here and below.