Judgment :- Appeal against the decree of the court of the Subordinate Judge of Tiruchirapalli in Appeal Suit No. 109 of 1952 preferred against the decree of the court of the District Munsiff of Tiruchirapalli in original Suit No. 284 of 1950. 2.This second appeal coming on for hearing the court delivered the following Judgement :- This appeal involves the construction of a security bond executed in favour of the Government by the first defendant. The second defendant obtained a licence T.L. 5 No. 52/43 and later numbered as T.L. 5/14/44 from the Central Excise Department for storage of non-duty paid tobacco of cheroot and bidi varieties in his private bonded warehouse in Palakarai, Central Excise Range, Tiruchirapalli. In respect of that licence both the defendants executed a bond, the first defendant being admittedly a surety. The bond was for a sum of Rs. 5,000/- dated 31st August, 1943. The licence appears to have been renewed year after year till 1947 but no fresh security bond was taken from the defendants. It is found that the second defendant had not properly accounted for certain stock of non-duty paid tobacco in the year 1946. The Excise department suffered loss to the extent of Rs. 1,279/11/00 caused by way of failure to pay Excise duty and sued both the defendants for recovery of the said sum. The second defendant wasex parteand the contention of the first defendant was that under the terms of the security bond he was not liable as the security bond was for the period of the licence which was for one year, that is 1943-44, and the claim in the suit relates to the year 1946. The only question for determination is whether on the terms of the security bond read in conjunction with the rules framed by the Central Excise Department, the first defendant continues to be liable notwithstanding that the licence referred to in Ex. A-1 was for a period anterior to the period during which the loss had occurred by the removal of the goods by the second defendant. The terms of the security bond did not mention specifically that it is restricted to the year 1943-44. But it refers to the licence granted viz. T.L. No. 464 of 1943 and T.L. 5 No. 14 of 1944, which certainly related to the year 1943-44. The terms of the security bond did not mention specifically that it is restricted to the year 1943-44. But it refers to the licence granted viz. T.L. No. 464 of 1943 and T.L. 5 No. 14 of 1944, which certainly related to the year 1943-44. the courts below have on a construction of the terms of the security bond read along with certain rules of the department, held that it was a continuing guarantee that was contemplated under Ex. A-1 which was also supported by the subsequent conduct of the parties and as such the first defendant would be liable.3.The security bond provides that the defendants have jointly and severally bound themselves to the Governor-General in Council in the sum of Rs. 5,000/-. The conditions of the bond were that the defendants shall observe all the provisions of the Tobacco (Excise Duty) Rules, 1943 to be observed in respect of bonded warehouses, that the defendants shall pay into the treasury to the account of the Collector of Central Excise, Madras, all dues, whether Excise duty and other lawful charges which shall be demandable on the tobacco admitted to the warehouse as shown by the records of the proper officer of Central Excise within ten days from the date of demand thereof being made in writing by the said office of the Central Excise and then the obligation shall be void. This objection as to the first defendant not holding himself liable as surety for any period beyond the period for which the licence was issued in T.L. 2 No. 454 of 1943 and T.L. 5 No. 14 of 1944, was sought to be met by reference to the particular terms of the security bond where it is stated that the obligors are bound in the sum of Rs. 5,000/- if the dues demandable in respect of tobacco admitted into the warehouse is not paid within the specifed period during which the tobacco may be admitted into the warehouse. There is no doubt there is noting in the document Ex. A-1 to show that the obligation on the part of the first defendant was to restrict it to any particular period and there is also nothing in the document to show that it related to any other period subsequent to the period referred to in the licence granted to the second defendant which was only for one year 1943-44. A-1 to show that the obligation on the part of the first defendant was to restrict it to any particular period and there is also nothing in the document to show that it related to any other period subsequent to the period referred to in the licence granted to the second defendant which was only for one year 1943-44. Reliance is also placed on certain Rules and in particular to old Rule 156 and the new Rule 155 by the learned Subordinate Judge. Rule 155 provides that every bond executed under Rule 140 and Rule 164 in respect of such goods shall, unless the Collector in any case deems a fresh bond to be necessary, continue in force notwithstanding the subsequent removal of such goods to another warehouse. Rule 140 makes it incumbent on every private warehouser to obtain a licence and furnish a bond in the proper form for the due observance of the terms, conditions and requirements of the Act and the rules. Obviously Ex. A-1 is a bond executed in pursuance of Rule 140.4.The question is whether in respect of goods deposited in the warehouse even for the period beyond the period of licence, for which the bond was executed there would be the liability of the surety. Rule 155, however, would not help the Excise Department for the reason that what the Collector could dispense with was only the execution of a fresh bond when the goods are removed to another warehouse. It does not mean that no bond would be necessary if the goods are removed to another warehouse after the expiry of the period of licence for which the security bond was executed. It is only if during the continuance of the licence for any particular period the goods are removed to another warehouse no fresh bond would be necessary. Rule 155 could not be construed as to dispense with the obtaining of a fresh bond in respect of the removal of goods to another warehouse subsequent to the period in respect of which the bond was executed. Rule 178 is important in as much as it provides that every application for licence granted or renewed under the rules shall be in such form as may be appropriate and shall be for a period not exceeding one year and shall expire on the date specified therein. Rule 178 is important in as much as it provides that every application for licence granted or renewed under the rules shall be in such form as may be appropriate and shall be for a period not exceeding one year and shall expire on the date specified therein. The licence T.L. 2 No. 464 of 1943 and T.L. 5 No. 14 of 1944 expired with the year 1943-44 and shall have reference only to the premises and for the period not exceeding one year. If the licence is to be construed as being in respect of the premises of the second defendant and for a period of one year in respect of which the first defendant stood surety and executed the bond as required by Rule 140, it is for the Government to show how his liability could be extended either by reference to the terms of the security bond or by reference to any other rule which would automatically extend the liability of the surety under the bond, notwithstanding that he has not bound himself for the period of the renewed licence. The operative portion of the bond relied upon by the learned Government Pleader certainly shows that the obligors are bound to pay any dues that is demandable on the tobacco admitted to the warehouse. But that does not mean that any dues in respect of the tobacco admitted into the warehouse after the expiry of the period of licence could be demanded from the executants of the bond.5.It is however, urged by the learned Government Pleader that it is not as if the first defendant was not aware that he would be made liable for the dues in respect of the tobacco admitted into the warehouse of the second defendant, since he has himself written on 21stAugust, 1947 under Ex. B-1 to the Assistant Collector of Central Excise pointing out that the licensee is trying to dispose of the balance of tobacco without the knowledge of the authorities. But it must be noted that he refers therein to the licence No. L. 5 No. 14/44. It cannot be that he was really aware of the implications of his letter as to his liability for any period subsequent to the period covered by the said licence. But it must be noted that he refers therein to the licence No. L. 5 No. 14/44. It cannot be that he was really aware of the implications of his letter as to his liability for any period subsequent to the period covered by the said licence. It may be that by way of abundant caution he wrote this letter to the Excise authorities as to the conduct of this second defendant. That would not anyhow impose a liability on him which is not contemplated under Ex. A-1. In my view, on a construction of Ex. A-1 and the relevant rules, the first defendant would not be liable. 6.The result is, the second appeal is allowed with costs and the suit is dismissed so far as the first defendant is concerned. Each party will bear their respective costs in the court below.