V.S. SWAMINATHA IYER (DIED) AND ORS. Vs. K.S. SRINIVASA AMMAL
LAWS(MAD)-1970-7-20
HIGH COURT OF MADRAS
Decided on July 24,1970

V.S. Swaminatha Iyer (Died) And Ors. Appellant
VERSUS
K.S. Srinivasa Ammal Respondents

JUDGEMENT

G.Ramanujam, J. - (1.) THE decree -holder is the appellant in C.M.S.A. No. 2 of 1967 while the judgment -debtor is the appellant in C.M.S.A. No. 49 of 1967. There was a suit O.S. No. 81 of 1963 on the file of the Sub -Court, Tiruchirapalli on a promissory note. In I.A. No. 227 of 1953 in the said suit the plaintiff filed an application for attachment before judgment of the properties belonging to third defendant. At that stage the third defendant gave a security bond before that Court for a sum of Rs. 10,000 in respect of her properties in Salem district. After decree was passed in the suit, the same was transferred to the Sub -Court, Salem for execution. In execution in R.E.P. No. 176 of 1960 before the Sub -Court, Salem, the third defendant raised the contention that the execution petition is not maintainable that the security bond had been executed in favour of the Sub -Court, Tiruchirapalli, that the same cannot be transferred by the decree -holder without an assignment in his favour and that in any event the security bond having limited the liability to Rs. 10,000 the decree -holder cannot proceed against the properties for recovery of the entire decree amount. The said contentions were overruled by the Sub -Court, Salem holding that the security bond stood transferred from the Sub -Court, Tiruchirapalli to Sub -Court, Salem, and that the Sub -Court, Salem had the power to proceed with the execution on the strength of the bond given to the Tiruchirapalli Sub -Court, that no assignment in favour of the decree -holder was necessary and that the recitals in Exhibit, B -1 did not limit the liability under the security bond only to the extent of Rs. 10,000 as contended for by the third defendant.
(2.) IN the appeal before the District Court, Salem, the following three contentions were raised; (i) Whether the execution should be restricted only to the extent of Rs. 10,000? (ii) Whether the assignment of the security bond is necessary, and (iii) Whether the Sub -Court, Salem has no jurisdiction to execute the decree by enforcing the bond? On the first point the Lower Appellate Court took the view that the security bond having been given only to the extent of Rs. 10,000 any claim against the secured properties for more than Rs. 10,000 was not maintainable. As regards the second and third contentions, the Lower Appellate Court agreed with the view of the trial Court that no assignment of the bond was necessary in favour of the decree -holder and that along with the transmission of the decree from the Sub -Court, Tiruchirapalli, the right to enforce the security bond also stood transferred to the Sub -Court, Salem. In the view it had taken, the Lower Appellate Court allowed the execution to proceed only to the extent of Rs. 10,000 as against the properties covered by the security bond. In C.M.S.A. No. 2 of 1967 the decree -holder questions the correctness of the view expressed by the Lower Appellate Court that the execution against the properties covered by the security bond should be limited to only Rs. 10,000. In C.M.S.A. No. 49 of 1967 the third defendant is challenging the correctness of the view of the Lower Appellate Court that no assignment of the security bond is necessary in favour of the decree -holder and that the Sub -Court, Salem, as a transferee Court can enforce the security bond without a specific order of transfer of the security bond. As regards the question whether the enforcement of the security bond should be limited to Rs. 10,000 the learned Counsel for the decree -holder contended that the sum of Rs. 10,000 mentioned in the security bond is only approximate given only for the purpose of stamp -duty, but that as per the recitals in Clause 3 of the security bond, Exhibit B -1, the executant of the bond binds himself to the suit amount, interest and costs and secures the properties for the entire amount due under the decree that may be passed in the suit, and that the execution by way of enforcement of the security bond cannot be Limited to Rs. 10,000. I am not inclined to agree with the learned Counsel for the decree -holder that the sum of Rs. 10,000 mentioned in the security bond is only approximate and that the liability thereunder will extend to the entire decree amount. On a proper reading of the security bond Exhibit B -1, it can be construed only as providing a maximum limit of Rs. 10,000 towards the liability undertaken under the security bond, and that cannot be said to have been inserted only for the purpose of stamp -duty. The actual amount sought to be recovered under the E.P. is Rs. 12,290 -75 plus Rs. 302 -11 for costs and subsequent interest. As has been held in Mohendra Math v. Roy Satish Chandra : AIR 1934 Cal 569 , a security bond must be strictly construed according to its own terms when there is no ambiguity in the terms and if there is possible contradiction in the terms of the security bond, Section 95 of the Evidence Act allows a reference to the antecedent circumstances and the Court has to consider the bond in the light of the order directing the security to be given. In this case the liability of the third defendant sought to be enforced is the one created by the security bond and that can, in no event, exceed a sum of Rs. 10,000. I am therefore not in a position to agree with the contention of the learned Counsel for the appellant that the security bond can be availed of to recover the entire decree amount sought to be recovered in the E.P. and that the lower appellate Court is not correct in holding that the execution can proceed under Exhibit A -1 to the extent of Rs. 10,000.
(3.) THE learned Counsel for the appellant further submits that the order of the Lower Appellate Court restricting the pending execution to the sum of Rs. 10,000 mentioned in Exhibit B -1 is merely academic, that if the secured properties are sold for the recovery of Rs. 10,000 mentioned in Exhibit B -1, the entire sale proceeds will come into Court whether it is more than Rs. 10,000 or less, and in the event of there being surplus sale proceeds in Court, the decree -holder can always proceed against the surplus sale proceeds in execution of the decree which will stand unsatisfied even after the enforcement of the security bond. On this basis, it is said that the decree -holder's right to recover the entire decree amount cannot be defeated by the judgment -debtor. Whatever may happen if the secured properties are sold and the sale proceeds are brought into Court, the main question whether the security bond can be enforced for any sum in excess of Rs. 10,000 mentioned thereunder has to be answered in the negative. It is true, it is open to the decree -holder to put into execution the entire decree and proceed even as against the excess sale proceeds realised by the sale of the charged properties in enforcement of the liability of Rs. 10,000 mentioned thereunder. But that will not enable the decree -holder to proceed to enforce the security bond for a sum in excess of Rs. 10,000. In considering the extent of liability under the security, bond, the executant's position as a judgment -debtor will not make any difference.;


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