Ram Sagar Singh v. Yogendra Narain Pd. Singh — 1975 DIGILAW 7 (PAT)

Judgment 1. This second appeal is by the defendant arising out of a suit instituted against him for recovery of a sum of Rs. 1,500.00 besides interest, having been paid by the plaintiffs in an execution proceeding, in the following circumstances. The defendant and the plaintiffs father Tula Singh are said to have executed a handnote on 2-3-1952 for a sum of Rs. 1,600.00 in favour of one Chakradhar Prasad Singh. According to the plaintiffs case, the money under the handnote was borrowed by the defendant and their father Tula Singh was merely a surety. The defendant defaulted in paying the dues to the said Chakradhar Pd. Singh, who filed Money Suit No. 46 of 1955 in the Court of the Munsif, Hajipur, against the defendant and the plaintiffs (their father having died in the meantime) jointly and obtained an ex parte decree against them. The decree-holder levied Execution Case No. 393 of 1957 but proceeded against the property of the plaintiffs only, so much so that it was put to auction sale and Purchased by the decree-holder. Before, however, the sale was confirmed, the defendant filed a petition on 6-2-1961 (Ext. 1) admitting his liability for the decretal dues and praying for allowing him to pay the same in instalments. The prayer was allowed on that very day and the defendant paid a sum Rs. 1,600.00 in three instalments, but stopped payment thereafter. The plaintiffs in order to save their land filed a petition on 18-2-1964 in the executing Court praying that the case either may proceed against the defendant for the recovery of the balance of the decretal dues in view of his admission in the petition dated 6-2-1961 (Ext. 1) admitting his liability for the entire decretal dues, or they may be allowed to deposit the balance. The executing Court directed the plaintiffs to deposit the balance of the decretal amount and, accordingly, they paid Rs. 1,500.00 in three instalments. As already said above, the plaintiffs instituted the present suit for recovery of the same. 2. The suit was contested by the defendant, inter alia, on the ground that plaintiffs suit was barred by the principles of res judicata inasmuch as the money suit in question was decreed against the defendant and plaintiffs both and as such the plaintiffs were equally liable to satisfy the decretal dues. 2. The suit was contested by the defendant, inter alia, on the ground that plaintiffs suit was barred by the principles of res judicata inasmuch as the money suit in question was decreed against the defendant and plaintiffs both and as such the plaintiffs were equally liable to satisfy the decretal dues. It was, therefore, not open to them to take a different position in the executing Court, nor the executing Court was entitled to go behind the decree. The plaintiffs and the defendant both, therefore, having paid the decretal dues almost half and half, the plaintiffs were, not entitled to any relief in this suit. 3. Both the Courts below have decreed the suit on a finding that Tula Singh was merely a surety in the handnote in question and the defendant was alone liable to satisfy the dues thereunder. They have further held that the suit was not barred by the principles of constructive res judicata. The Court of appeal below has also recorded a finding against the defendant regarding his plea that fraud was practised upon him in filing the petition (Ext. 1) on his behalf in the execution case, in which an admission was made by him admitting the entire liability for the decretal dues on the statement that Tula Singh was merely a surety. His further case that he was carrying a joint business with Tula Singh and, therefore, both of them had executed the handnote in question has also not been accepted. 4. Mr. Baidyanath Prasad No. II appearing for the appellant in this Court has seriously contended that the plaintiffs suit was barred by the principles of constructive res judicata and the Court below committed an apparent error of law on this question. According to the contention of the learned counsel, the question as to whether the plaintiffs being the heirs of Tula Singh were liable for the dues under the handnote in question or not, or the defendant alone was liable for the same, was a necessary issue which should have been raised and decided in the money suit itself and, therefore, this question was barred by the principles of constructive res judicata. Learned counsel placed reliance upon certain authorities in support of his proposition which I shall consider hereinafter. 5. Learned counsel placed reliance upon certain authorities in support of his proposition which I shall consider hereinafter. 5. In order to appreciate the contention advanced before me, it will be necessary to examine the scope of the liability of surety. Sec.128 of the Contract Act is the relevant provision in this regard. It provides that the liability of a surety is co-extensive with that of the principal debtor, unless it is otherwise provided by a contract. It is well settled that in order to attract the principles of res judicata as a bar in a subsequent suit, the matter must have been directly and substantially in issue in the earlier suit. In other words, a decision on the question must be necessary in order to either decree or dismiss the plaintiffs suit. A contention was, however, raised that the decree in question being ex parte, there was no occasion for the plaintiffs to raise this question and, therefore, this question could not be deemed to be heard and decided in the earlier suit. This matter has since been settled by a Bench decision of this Court in the case of Habibur Rahman V/s. Vijay Charan Abhay Charan Dubey and Bros. AIR 1959 Pat 31 , where it has been clearly laid down that the application of the doctrine of res judicata has not to depend on the decree being ex parte or contested. A party is as much bound by an ex parte decree as by a contested one. The question, however, that still remains to be answered is as to whether the conditions for the application of the doctrine of res judicata between the parties, who were co-defendants in the earlier money suit, were existing. In order to apply this doctrine between co-defendants, there must be (1) a conflict of interest between the co-defendants. (2) the necessity to decide that conflict in order to give the plaintiff the appropriate relief, and (3) a decision of that question between the co-defendants. Reference may be made in support of this proposition to a case of the Judicial Committee in the case of Chandu Lal Agarwalla V/s. Khalilur Rahman, AIR 1950 PC 17. It has, therefore, to be seen as to whether in order to dispose of the former money suit, there was any necessity to decide the question as to whether Tula Singh was liable under the handnote or not. It has, therefore, to be seen as to whether in order to dispose of the former money suit, there was any necessity to decide the question as to whether Tula Singh was liable under the handnote or not. If that question was not necessary to be decided for the determination of the suit, then one of the relevant conditions for the application of the doctrine of res judicata between the co-defendants did not exist. However, had the matter been raised and that Court would have proceeded to decide this question, the matter might have perhaps been different, but the decree being ex parte, no such question was raised. From the provision of Sec.128 of the Contract Act, it is manifest that the liability of a surety is co-extensive with that of the principal debtor and it was open to the plaintiff of that suit to institute his suit against the surety alone or to recover the decretal dues by proceeding against the surety in the first instance in the execution proceeding and relieving the main debtor. In my opinion, therefore, in the earlier money suit, the matter as to which of the defendants was liable for debt under the handnote, was neither directly nor substantially in dispute. In other words, there was neither any conflict of interest between the co-defendants, their liability being co-extensive for the dues under the handnote; nor was any necessity to decide any such conflict, even if there was any, to grant the plaintiff the appropriate relief. The Court was, therefore, not bound to give a decision on that question between the co-defendants. I am supported in my view by a decision of the Supreme Court in the case of Bank of Bihar Ltd. V/s. Dr. Damodar Prasad, AIR 1969 SC 297 , where on a reference to Sections 128 and 140 of the Contract Act, it was held that the liability of the surety is co-extensive with that of the principal debtor and the surety is liable to pay the entire amount, his liability being immediate. On payment, he is only to be subrogated to the rights of the creditors under Sec.140. The contention raised on behalf of the appellant has, therefore, got no substance, and, as such the plaintiffs suit was not barred by the principles of constructive res judicata. On payment, he is only to be subrogated to the rights of the creditors under Sec.140. The contention raised on behalf of the appellant has, therefore, got no substance, and, as such the plaintiffs suit was not barred by the principles of constructive res judicata. The Courts below, therefore, have committed no error of law in answering this question agai nst the appellant, as the Court in the earlier suit was not at all called upon or required to decide the present question in order to decide that suit. 6. It is not disputed that the plaintiffs did pay a sum of Rs. 1,500/-under the decree. In view of the finding that the plaintiffs father Tula Singh was merely a Surety in the handnote in question which finding is not open to challenge in the second appeal, the plaintiffs must be held to be entitled to recover the amount that they have had to pay in the execution proceeding. This right is well recognised under the provision of Sec.140 of the Contract Act itself, according to which a surety upon payment of the liability of the principal debtor, is invested with all the rights which the creditor had against the principal debtor. Chakradhar Pd. Singh, the (principal debtor, had the right to recover Rs. 1,500/-under the decree from the defendant, which amount has been paid by the plaintiffs. The plaintiffs, therefore, having been subrogated to the right of the decree-holder have been rightly held to be entitled to get a decree for the amount paid by them. 7. This appeal, therefore, has got no merit and is dismissed with costs.