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1954 DIGILAW 57 (ORI)

BANAMALI MOHPATRA v. TEDEPALLI SIVARAMMAYYA

1954-08-11

MOHAPATRA, R.L.NARASIMHAM

body1954
JUDGMENT : Mohapatra, J. - This miscellaneous appeal is against an order dated 9-5-52 of Sri P.C. De, Subordinate Judge of Berhampur origin in execution proceedings. The Respondents who are the Plaintiff decree-holders brought a suit in the year 1941 as mortgagees to enforce the mortgage bond executed in their favour. They had made the original mortgagors and the 8th Defendant (who is a subsequent purchaser of the equity of redemption) as parties Defendants in the suit. The Respondents eventually obtained a decree only against the 8th Defendant the subsequent purchaser of the equity of redemption and the suit was dismissed against the original mortgagors as it was found that the mortgagors were entitled to bring in aid the provisions of the Money-Lenders Act, according to which they were not liable to pay more than double the principal in any event, and this protection was not available to the subsequent purchaser of the equity of redemption as the law stood then. The 8th Defendant challenged the decree before the High Court in First Appeal No. 5 of 1944. During the pendency of the appeal before the High Court, the mortgagee-decree-holders started execution, the proceedings of which were stayed by the Hon'ble Court on condition that security to the extend of Rs. 15,000/- should be furnished by and on behalf of the 8th Defendant. In obedience to that order a security bond was executed by the 8th Defendant along with 11 others who were not parties to the suit but had hypotheticated several items of the property for a sum of Rs. 10,000/-. The appeal before the High Court having been eventually dismissed, the Respondents-decree-holders put the mortgaged properties to sale and realised a part of the decretal amount. The sale proceeds having been insufficient to satisfy the decree in full, the decree-holders in the execution proceedings want to proceed against the properties which are the subject matter of the security bond executed by the 8th Defendant and 11 others who are sureties. 2. The main objection raised on behalf of the sureties who are the Appellants before us is that the execution proceedings are incompetent and the decree-holders' only remedy is by way of a regular suit. The Respondents-decree-holders rely upon the provisions of Section 145, Code of Civil Procedure, to resist this objection raised by the Appellants. 2. The main objection raised on behalf of the sureties who are the Appellants before us is that the execution proceedings are incompetent and the decree-holders' only remedy is by way of a regular suit. The Respondents-decree-holders rely upon the provisions of Section 145, Code of Civil Procedure, to resist this objection raised by the Appellants. The learned Executing Court upheld the contention of the decree-holders and has allowed the execution proceedings to continue. 3. The first question to be determined is whether this is a case covered by the provisions of Section 145, CPC according to which even though the sureties were not parties to the suit of the original execution proceedings, the decree-holders can proceed against the secured properties of the sureties to the same extent as they would proceed against the properties of the judgment-debtors, Indeed the application of the provisions of Section 145, CPC is subject to the condition and to the extent to which the surety has rendered himself personally liable. The language of Section 145 which is quoted below makes it absolutely clear. 145. Where any person has become liable as surety-- (a) for the performance of any decree or any part there of, 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 fulfilment of any condition imposed on any person, under an order of the Court in any suit or in any proceedings consequent thereon, the decree or order may be executed against him, to the extent to which he has rendered himself personally liable, in the manner herein provided for the execution of decrees, and such person shall, for the purpose of appeal, be deemed a party within the meaning of Section 47: Provided that such notice as the Court in each case thinks sufficient has been given to the surety. 4. Before proceeding further we will refer to the terms of the security bond in question. Besides Gobinda Mohapatro, the original 8th Defendant, there are 11 other executants who are sureties. The bond is dated 14-11-45 for a sum of Rs. 15,000/- It is in favour of "Subordinate Judge, Ganjam, Sriman Rudraprasna Misra Mahasay M.A., B.L., Sub-Judge, Berhampur, Mortgagee." The proper ties secured are Ac. 24-15 cents. It is necessary to recite the terms of the bond in extenso: "That T. Venkata Krishnaiyya Pantula. The bond is dated 14-11-45 for a sum of Rs. 15,000/- It is in favour of "Subordinate Judge, Ganjam, Sriman Rudraprasna Misra Mahasay M.A., B.L., Sub-Judge, Berhampur, Mortgagee." The proper ties secured are Ac. 24-15 cents. It is necessary to recite the terms of the bond in extenso: "That T. Venkata Krishnaiyya Pantula. Garu, the Plaintiff in suit No. O.S. 49 of 1941 M.B.J.C. having sued the Defendants in this Court and a decree having been passed on the day of 1941, in favour of the Plaintiff, and the 8th Defendant Govinda Mohapatra having preferred, an appeal from the said decree in the Honourable High Court, the said appeal F.A. 5/44 is still pending." Now the Plaintiff-decree-holder having applied to execute the decree in O.S. 49/42 R.P. 193/44 B.S.J.C. the 8th Defendant has made an application before the Honourable High Court praying for stay of execution and has been called upon to furnish security. Accordingly, we the mortgagors with our own free will, stand security to the extent of Rs. 15,000/- mortgaging the properties specified on the Schedule III in favour of the Subordinate-Judge, Ganjam, at Berhampur, and covenant that if the decree of the first court be confirmed or varied by the appellate court, the said Defendant shall duly act in accordance with the decree of the appellate court and shall pay whatever may be payable by him thereunder, and if he should fail therein then any amount so payable shall be realised from the properties hereby mortgaged, and if the proceeds of the sale of the said properties are insufficient to pay the amount due, we and our legal representatives will be personally liable to pay the balance. The properties described in the bond are free of encumbrances and there are no attachments or charges against the same. The bond seems exactly to be in accordance with the Form appearing in Appendix G attached to the Code of Civil Procedure. It is absolutely clear, on a fair perusal of the terms of the deed, that the personal liabilities of the executants will arise only after the properties secured in bond itself have been sold and the sale proceeds are found insufficient o pay the amount due. It is absolutely clear, on a fair perusal of the terms of the deed, that the personal liabilities of the executants will arise only after the properties secured in bond itself have been sold and the sale proceeds are found insufficient o pay the amount due. The terms seem to be exactly parallel to the terms of the bond which was for consideration before their Lordships of the Privy Council, in the case of AIR 1943 189 (Privy Council) . There also the first remedy was to sell the properties secure and it was only after the sale was held and the sale proceeds were inadequate that the executant bound himself liable and agreed than the other properties should remain liable to the extent of the amount secured. Their Lordships observed "On these clauses it may be convenient to observe that the only personal liability assumed by Jiwan Singh (the executant) arises in the event of the charge failing to yield a sum of Rs. 42,000/- and is in respect of any such deficiency." In that case, the Courts in India had found that the provisions of Section 145 will not apply and the view of the Indian Courts wag affirmed by their Lordships of the Privy Council in the following terms: "Upon examination of the matter it appears to their Lordships that the Courts in India were right in holding that the case is not within Section 145 if only because the section applies only to the personal liability of the surety". With great respect following the observations of the Privy Council, we are definitely of the view that the present case is not covered by the language of Section 145, CPC as the section applies only to the personal liability of the surety. To what extent the Appellants are personally liable under the terms of the security bond can be ascertained only after the secured properties have been sold and the sale proceeds are found insufficient. Now, therefore, when the decree-holders want to proceed against the secured properties, they are not entitled to seek protection u/s 145, CPC and proceed in execution. 5. But this cannot dispose of the matter and it cannot be said on this count only that the present proceedings are incompetent and the only remedy of the decree-holders is by way of a suit to enforce the charge. 5. But this cannot dispose of the matter and it cannot be said on this count only that the present proceedings are incompetent and the only remedy of the decree-holders is by way of a suit to enforce the charge. The decree-holders can invoke the inherent powers of the Court to enforce the security bond in the same proceedings without having resort to a separate suit when the bond has been executed in favour of the Court and the underrating was given by the sureties to the Court for the purpose of the judgment-debtors getting the advantage of staying the execution proceedings started by the decree-holders. The principle has been very well recognised for a long time that the Court is not a juridical person; neither can it be sued against; the court cannot assign nor can it hold property. But when the undertaking is given in favour of the Court, the Court can enforce the undertaking in the selfsame proceedings as a separate suit cannot be maintained. The dictum has been laid down by their Lordships of the Privy Council in the case of Raja Raghubir Singh v. Jai Indra Bhadur Singh AIR 1919 P.C. 55 in the following terms: "But the court is not a juridical person. It cannot be sued. It cannot take property, and as it cannot take property it cannot assign it. It remains, therefore, the there is an unquestioned liability, and there must be some mode of enforcing it and that the only mode of enforcing it must be by the court making an order in the suit upon an application to which the sureties are parties, that the property charged be sold unless before a day named the sureties find the money". In that case also the decree-holder sought to rely upon the provisions of Section 145, Code of Civil Procedure, but from the construction of the bond itself their Lordships held that the section had no application on account of the absence of personal liability. This decision has served as the leading case on the subject since the time and has been quoted with respect in the cases decided on the subject in India. The Privy Council case reported in AIR 1943 189 (Privy Council) reiterates the same view. This decision has served as the leading case on the subject since the time and has been quoted with respect in the cases decided on the subject in India. The Privy Council case reported in AIR 1943 189 (Privy Council) reiterates the same view. Their Lordships after, as we have indicated above, finding that the case was not covered by the provisions of Section 145, observed that the Court had inherent power to enforce the undertaking in the same proceeding. 6. We would only refer to two other cases of the Indian High Courts following the same principle. In the case of Eramullan Kunhi Moidin and Another Vs. Kunhi Koman Nair and Another, the security bond was in favour of the Court; their Lordships found there also that the provisions of Section 145 did not apply. The contention was raised that when the provisions of Section 145 would not apply, the only remedy would be by way of a suit, to enforce the charge. Chief Justice Beasley observed "as regards the other contention that the Appellants remedy is by suit, there is one obvious difficulty and it is that the security bond was given to the Court. The Appellants therefore were unable to sue upon the bond unless it had been assigned to them. By whom was the security bond to be assigned? If the bond had been executed in favour of the Amin or some officer of the Court, then that person could either have sued upon it or, under orders of the Court, assigned it to the Appellants to sue upon. But that is not the case here as the security bond does not support to bind the Plaintiff to any individual officer or person but merely binds the Plaintiff to the Court". These observations apply with great force to the present case. On a construction of the bond itself we are definitely of the view that it was executed in favour of the Court and not in favour of the mortgagee-decree-holders nor in favour of an officer of the Court. Manifestly, therefore, the mortgagee-decree-holders cannot sue as it is not in their favour. Neither can bond be assigned in their favour as according to the dictum of their Lordships of the Privy Council the Court cannot hold the property or assign the property. Manifestly, therefore, the mortgagee-decree-holders cannot sue as it is not in their favour. Neither can bond be assigned in their favour as according to the dictum of their Lordships of the Privy Council the Court cannot hold the property or assign the property. The suit, if filed by the mortgagees, will therefore be incompetent; but nevertheless it can never be suggested for a moment that there is no remedy even though an obligation is there and that on the basis of the application and undertaking to the Court the judgment-debtors had gained sufficient advantage at a loss to the decree-holders whose execution proceedings were stayed for a considerable length of time. The proper remedy, therefore, is by enforcing the transaction in the execution proceedings as in the present one, in exercise of inherent powers of the Court. 7. Mr. P.V.B. Rao, appearing on behalf of the Appellants, strongly contends that the Privy Council decisions have no application to the present case and are distinguishable on account of the clear position that in those cases the bonds were in favour 01 none, but the liability was there. In the present case, however, it is contended by him, the bond is in favour of a named individual. Mr. Rao relies upon the position that the ratio decidendi of the Privy Council decisions was passed upon the feature that the bonds were not in favour of an individual. The contention, to our mind, has no force inasmuch as it appears so manifest from the passage in the judgment of their Lordships in Raj Raghnbir Singh's case AIR 1919 P.C. 55 , quoted above, that if the bond is in favour of the Court the remedy is under the inherent powers of the Court to enforce the transaction as the Court cannot sue, nor can it assign, and it is impossible to accept the position that the obligation would go unenforced. 8. The next contention raised by Mr. Rao is that in the present case the bond is in favour of an Officer of the Court and not the Court, and, as such, according to the recognised practice in such cases, the Officer of the Court can assign the bond in favour of the mortgagee-decree-holder who is to pursue his remedy by way of a regular suit. Rao is that in the present case the bond is in favour of an Officer of the Court and not the Court, and, as such, according to the recognised practice in such cases, the Officer of the Court can assign the bond in favour of the mortgagee-decree-holder who is to pursue his remedy by way of a regular suit. We find from the observations of their Lordship of the Privy Council in the leading case of Raj Raghubir Singh which run to the effect: "It appears that in the High Court at Calcutta, in instruments of this nature, the parties bind themselves to some named officer of the Court, and that, if the instrument has to be put iv suit, either the officer sues of, he under the order of the Court, assigns the security to the party who wishes to avail himself of it; but this instrument does not purport to bind the sureties to any individual officer or to anyone". This practice finds favour in some other High Court in India also, but it is clear that the practice is based on the position that the bond is in favour of an officer of the Court and not the Court itself. In the present case the bond is executed in favour of "Subordinate Judge, Ganjam, Sriman Rudraprasana Misra Mohasaya, M.A., B.L., Sub-Judge, Berhampur." It is manifestly clear that the bond is in favour of the Court itself and not in favour of the officer of the Court. 9. Mr. Rao further contends that the present bond might be in favour of the Presiding Officer of the Court, but it cannot be said to be in favour of the Court. The Presiding Officer of the Court is not the same thing as the Court itself. For this part of his argument he relies upon an observation appearing in the judgment of Shri Rajmannar, officiating C.J. of the Madras High Court (as he then was) reported in Kambhan Ramamurthi v. Sagiraju AIR 1949 Mad. 152. It was accepted as a matter of principle in that case that the bond was in favour of the Court and it should be enforced under the inherent powers of the Court. No suit lies upon it since it cannot be assigned. 152. It was accepted as a matter of principle in that case that the bond was in favour of the Court and it should be enforced under the inherent powers of the Court. No suit lies upon it since it cannot be assigned. But it was observed that if the bond was executed in favour of the Presiding Officer or an Officer of the Court the bond is assignable in favour of the mortgagee as the Officer of the Court and the Presiding Officer are juridical persons. The terms of the bond are not in the report. We do not know how the obligee was described in the bond which was before their Lordships in the above case. We fail to follow how a distinction could be made in a case of this nature between a Presiding Officer of the Court and the Court itself. In the case before us, as we have mentioned already, the bond is executed in favour of the Subordinate Judge of Ganjam. Exactly such a allose came up before their Lordships of the Patna High Court (Das and Wort, JJ.) reported in the case of Tata, Iron & Steel Co. Ltd. v. Charles Joseph Smith ILR Pat. 801. There also the bond was in favour of the Special Subordinate Judge of Ranchi. Their Lordships, after quoting the passage appearing in the Privy Council decision of AIR 1919 P.C. 55 , held that the Special Subordinate Judge was not a juridical person and, therefore, he could neither assign nor sue. He could, therefore enforce the bond in exercise of his inherent powers. Their Lordships, while quoting the passage from the Privy Council decision, observed: "the procedure is in this passage stated with clearness and precision which should not in my judgment mislead any person; in my opinion therefore it is open to the decree-holder to realise the property in execution u/s 47 of the code." The same view also was followed by Rowland and Chatterji, JJ. of the Patna High Court in the case of Lalita Prasad Chaudhury v. Syed Muhammad Mamoor ILR Pat. 719. of the Patna High Court in the case of Lalita Prasad Chaudhury v. Syed Muhammad Mamoor ILR Pat. 719. In that case the bond was in favour of the Subordinate Judge of Motihari and their Lordships held "As regards the effect of expressing a security bond in the name of the Presiding Officer of the Court, this mater is dealt with in the case above cited Tata Iron & Steel Co. Ltd. v. Charles Joseph Smith where it in pointed out that the Subordinate Judge is not a juridical person." In that case it was argued by the analogy of Section 85 of the Guardian and Wards Act under the provisions of which the District Judge in whose favour a security bond had been executed by a guardian appointed by him could assign the bond. Their Lordships distinguished the case under the Guardian and Wards Act as a special procedure governed by the special .statute provided for. Following the aforesaid two decisions of the Patna High Court, we are definitely of the view that the bond in question is in favour of the Court who can enforce it in exercise of its inherent jurisdiction, and that the suit will not be maintainable as the court is not a juridical person who can either sue for itself or can assign the bond in favour of the mortgagees. 10. Mr. P.V.B. Rao argues strenuously that the distinction has got to be made between a Court and a Judge. He contends that "the Court" means "a Judge or Judges in open Court" while "a Judge" means "a Judge sitting in Chambers." In support of his contention be has drawn our attention to a decision of Kay, L.J., appearing in In re B (an alleged Lunatic) 1892 1 LR Chancery Division 463. In that case, Order XLIV, Rule 2 of the Rules of the Supreme Court was for interpretation. The Rule runs thus: "No writ of attachment shall be issued without the leave of the Court or a Judge, to be applied for on notice to the party against whom the attachment is to be issued". Kay, L.J. observed: "When the roles say 'the Court or a Judge', it is understood that 'the Court' means 'a Judge or Judges in the open Court,' and 'a Judge' means 'a Judge sitting in Chambers'". Kay, L.J. observed: "When the roles say 'the Court or a Judge', it is understood that 'the Court' means 'a Judge or Judges in the open Court,' and 'a Judge' means 'a Judge sitting in Chambers'". The decision is absolutely of no assistance to us inasmuch as the rule itself which was for interpretation makes a distinction between "a Court" and "a Judge", and as such, their Lordships had to put the meaning of the word "Court" as while sitting in open Court and understood "a Judge" as sitting in Chambers. This is exactly what happened in the case reported in Kyrburg v. Pomamki 1884 13 LR Queen's Bench Division 218. There also Order XLIV, Rule 2 came up for interpretation before their Lordships. Our attention has been drawn to P. Ramanath Iyer's Law Lexicon of British India at p. 255 (Col.1)-1940 Ed. where the words "Court or Judge" have been explained. He has taken the meaning from the above decisions and puts it "when the rules say 'the Court or Judge', it is understood that 'the Court' means a Judge or Judges in open Court and 'a Judge' means a Judge sitting in Chambers". But later on the same author, while interpreting "Court and Magistrate", says "The Code of Criminal Procedure (1898) uses the terms 'Court' and 'Magistrate' generally, if not always, as convertible terms". At p. 254 (Col. 2), the word "Court" alone has been explained and the author puts the meaning as the Court means "Judge, Arbitrator, Persons or Person, before whom a legal proceeding is held or taken". Without discussing the matter any further the position is completely clarified beyond all possible doubt by reference to definition of "Court" appearing in Section 3 of the Indian Evidence Act which runs thus "Court includes all Judges and Magistrates and all persons, except arbitrators, legally authorised to take evidence." We are, therefore, definitely of the view that no destination can be made between "a judge" and "the Court" and the bond in question having been executed in favour of the Subordinate Judge must be interpreted as in favour of the Court who is not a juridical person capable of suing or assigning. The Court, therefore, has jurisdiction in exercise of its inherent powers to enforce the bond in a summary way in execution as a suit by the mortgage-decree-holder would be incompetent. 11. The Court, therefore, has jurisdiction in exercise of its inherent powers to enforce the bond in a summary way in execution as a suit by the mortgage-decree-holder would be incompetent. 11. In conclusion therefore, the appeal fails and is dismissed with costs. Narasimham, J. 12. I agree. Final Result : Dismissed