EAPEN CHACKO Vs. KORATHU CHANDY
HIGH COURT OF KERALA
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(1.) The sole question that arises for consideration here is about the liability of the first appellant as a surety. He stood as a surety for the defendant in O.S. 882 of 1088. The bond executed is not before court. But it is admitted that as per the bond he undertook to discharge the decree liability to the extent of Fs. 3,000. After the decree became final execution was taken out by the decree holder. The one with which we are concerned now is E.P. 843 of 1124 filed on 21.11.1124. The decree was sought to be executed against the first appellant, the first surety, it being stated that no relief was wanted as against the other two sureties. The first appellant filed C.M.P. 3207 of 1125 by way of objection, one of the contentions raised being that he was not liable for any interest on the amount specified in the surety bond, there being no provision regarding the same. The decree holder has no case that there was any definite stipulation making the surety liable to pay any interest, his only contention in C.M.P. 4832 of 1950 filed by him in reply to the objections being that the objection of the surety regarding interest cannot stand and that interest as allowed by the decree can be recovered from the surety also. So what has to be considered is whether when the bond stipulates that the liability of the surety is for Fs. 3,000 in case a decree was passed against the judgment debtor he can be made liable for interest also on the ground that the decree had provided for the same and his liability was coextensive with that of the judgment debtor. Both the courts below have held that the surety is liable for the interest. What the lower appellate court says is that there being no objection filed by the surety in prior execution petitions and in view of the admitted liability for the principal amount he is also liable to pay interest on the said amount and hence as per S.31 of the Travancore Civil Procedure Code then in force the surety was liable for interest to the extent of Fs. 3,000. Now, on behalf of the first appellant it is contended that the surety bond is to be strictly interpreted, that when there is no provision in it making the surety liable for interest a court cannot allow the decree holder any relief with regard to the same and he was at liberty to raise this objection even though it be for the first time in the present execution proceedings themselves. It is a well known principle that in equity and in law a surety bond is to be strictly construed. When a third party undertakes the liability he cannot be fastened with any which he does not consciously agree to. The surety bond is the document which embodies the details of his liability. In Maharaja in Benares v. Har Narain Singh (ILR 28 Allahabad 25) cited on behalf of the appellants the sureties undertook to pay arrears of rent of the leasehold which was the subject matter of the suit in case the lessee defaulted. In execution of the decree the decree holder claimed that under the bond the sureties were liable for interest also. It was held that when the bond referred only to the liability to pay arrears of rent the sureties cannot be fastened with the liability for interest. There at page 27 it was observed as follows after referring to the relevant provisions in the bond there:
It seems to us that upon the true construction of this surety bond, the executants intended to be responsible for the rent, and for the rent alone. If it had been in the contemplation of the parties to give security not merely for the arrears of rent but also for interest it would, we think have been so stated, and the passage in the bond to which we have referred would have contained some such words as with interest thereon. Therefore, this is not, we think, a case to which the ordinary rule according to which the liability of a surety is coextensive with the liability of the principal is applicable.
Chacko Joseph v. Raman Pillai Bhaskaran Nair ( 1950 KLT 203 ) also supports the appellants position that he is not liable for any other item than that specifically mentioned in the surety bond. In the present case also it is not proved that there is a provision in the bond regarding the liability of the surety to pay any interest. Hence it follows that the lower courts were wrong in holding that there was such a liability. The liability of the first appellant surety is only to the extent of Fs. 3,000 mentioned in the bond. As there was no prior adjudication of this point in the previous proceedings there is no bar to raise it in the present execution proceedings.
(2.) In the result, the appeal is allowed accordingly with costs.;
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