PETITIONER:
HOWRAH INSURANCE CO. LTD
Vs.
RESPONDENT:
SOCHINDRA MOHAN DAS GUPTA
DATE OF JUDGMENT20/08/1975
BENCH:
CHANDRACHUD, Y.V.
BENCH:
CHANDRACHUD, Y.V.
RAY, A.N. (CJ)
MATHEW, KUTTYIL KURIEN
CITATION:
1975 AIR 2051 1976 SCR (1) 356
1975 SCC (2) 523
CITATOR INFO :
RF 1988 SC 654 (10,13)
ACT:
Surety Bond enforcement of-Bond in favour of District
Judge of Agartala, "his successors, successors-in-office and
assigns"-Transfer of suit to the Court of Subordinate Judge,
Agartala-Subordinate Judge, if incompetent to enforce surety
bond.
Code of Civil Procedure. Sections 145(c) and 150.
HEADNOTE:
Messers Das Bank Ltd. instituted a mortgage suit
against the responded on January 19, 1950 in respect of the
tea garden mortgaged with them in 1943. On reorganisation of
the Judicial Administration in 'Tripura, the suit was
transferred from the Tripura High Court to the court of the
District Judge, Agartala. On the application by the Bank for
appointment of a receiver, an employee of the Bank was
appointed as the receiver subject to his furnishing security
in the sum of Rs. 50,000. The Receiver took possession of
the estate on 22nd January, on February 26, 1 950 the tea
garden was damaged by a tire which destroyed over 3,000 tea
saplings. The respondent moved an application asking for
damages from the Receiver on the ground that the fire had
occured due to his negligence. He also renewed his request
that the receiver be asked to furnish security.
On August 26, 1950, the appellant M/s. Howrah Insurance
Co. executed a surety bond in the sum of Rs. 50,000 in
favour of Shri R. M. Goswami, District Judge, Agartala, his
successors, successors-in-office and assigns. The bond was
approved and accepted by the District judge on October 10,
1950. The bond was executed both by the Receiver and the
appellant in favour of "Sri Ramani Mohan Goswami the
District Judge of Agartala, his successors, successors-in-
office and assigns." By the bond, the executants bound
themselves jointly and severalty in the whole of the amount
of Rs. 50,000 up to the District Judge Agartala, his
successors, successors-in-office and assigns. The bond,
though executed on August 26, 1950, related back to January
22, 1950 being the date when the Receiver took possession of
the property. By virtue of the powers conferred by the
Tripura (Courts) order of 1950 which came into force on
December 31, 1950 the District Judge transferred the
mortgage slit to the court of the Subordinate Judge.
Agartala. The transferee court was created under the order
of 1950. The Subordinate Judge decreed the suit and also
allowed the respondent's application for damages to the
extent of Rs. 32,525. The appeal filed by the Receiver was
dismissed for default by the Judicial Commissioner,
'Tripura, but he allowed the respondent's cross-objections
and enhanced the damages to Rs. 41,525. On the Execution
Petition filed by the respondent, the Subordinate Judge
directed that the damages awarded to the respondent be
recovered from the appellant The appeal filed by the
appellant against that order a, dismissed by the Judicial
Commissioner and this appeal has been preferred on the basis
of the special leave "ranted by this Court.
It was contended for the appellant that (l) 'The
Subordinate Judge who tried the suit was incompetent to
enforce the surety bond executed by the appellant as he was
neither the successor nor the successor-in-office nor the
assign of The District Judge; and (2) Under the terms of the
bond, the appellant was not answerable for the loss caused
to the tea garden by fire.
Rejecting the contentions and dismissing the appeal,
HELD: ( I ) (i) Th Subordinate Judge of Agartala may
not be the successor-in-office of the District Judge because
"successor-in-office" would mean successor of the District
Judge in the post or office of the District Judge. But the
Subordinate Judge, Agartala is, for the purposes of the
present proceedings, a
357
successor of the District Judge who was seized of the suit
and who transferred it to the Subordinate Judge under the
Tripura (Courts) order of 1950. The surety bond was executed
in and for the purposes of the particular proceedings which
were Pending before the District Judge, in order that the
bond should be enforceable at the instance of the presiding
other of the court. "Successor", therefore, must in the
context mean the court which for the time being is seized of
the proceedings. [359B-C]
(ii) By virtue of s. 1 SO C.P.C., the Subordinate Judge
was entitled to exercise the same powers in the matter of
the enforcement of the bond as the District Judge himself.
[359D-E]
(iii) As laid down by section 145(c) of tho C.P.C., by
the surety bond, the appellant rendered itself liable as a
surety for the fulfilment of the conditions imposed on the
Receiver under the orders passed by the Court, Therefore,
the order for the recovery of damages obtained by respondent
against the Receiver can be executed against the appellant
to the extent to which it rendered itself personally liable
under the terms of the bond. [359-FG]]
(2) 'The Receiver Was put in possession of the tea
garden in his capacity as a Receiver and parties had made
contentions from time to time as to whether the tea garden
was managed by the Receiver economically and efficiently The
surety bond which was given retrospective operation with
effect from the date on which the Receiver had taken
Possession of the mortgaged property including the tea
garden, would therefore cover the loss occasioned to the tea
garden due to the Receiver's default. [360B-C]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1611 of
1971.
Appeal by special leave from the Judgment and order
dated 29-70 of the Judicial Commissioner’s Court Tripura,
Agartala in Civil Misc. 1st Appeal No. 4 of 1964.
S. V. Gupte, D. N. Mukherjee and G. S. Chatterjee, for
the appellant.
P. K. Chatterjee and Rathin Das, for the respondent.
The Judgment of the Court was delivered by
CHANDRACHUD, J. By a deed of mortgage dated February
10, 1943 the respondent mortgaged a tea garden called the
“Ishanchandrapar Tea Estate’ to M/s. Das Bank Ltd. On
January 19, 1950 the Bank instituted Mortgage Suit No.
2/1950 against’the respondent on the original Side of the
Tripura High Court, for recovering the amount due under the
mortgage. On reorganisation of the Judicial Administration
in Tripura, the suit was transferred to the court of the
District Judge, Agartala. On January 20, 1950 the Bank
applied for the appointment of a Receiver. On the District..
Judge directing that the Bank should nominate a Receiver in
terms of clause 12 of the mortgage deed, first the Secretary
of the Bank and later another employee called Adhir Ranjan
Dutta was appointed as the Receiver subject to his
furnishing security in the sum of Rs. 50,000. The Receiver
took possession of the estate on 22nd January but since the
security was not furnished, the court directed on an
application of the respondent that the Receiver should
furnish the requisite security within the time allowed to
him. On February 26 1950 the tea garden was damaged by a
fire which destroyed over 3,000 tea saplings. On 28th
February, the respondent moved an application asking for
damages from the Receiver
358
on the ground that the fire had occurred Due to his
negligence. The respondent also renewed his request that the
Receiver be asked to furnish security.
On August 26, 1950 the appellant M/s. Howrah Insurance
Co. Ltd. executed a surety bond in the sum of Rs. 50,000 in
favour of Shri R. M. Goswami, District Judge, Agartala, his
successors successors-in-office and assigns. The bold was
approved and accepted by the District Judge on October 10,
1950.
By virtue of the powers conferred by the Tripura
(Courts) order of 1950 which came into, force on December
31, 1950 the District Judge transferred the mortgage suit to
the court of the Subordinate Judge, Agartala. The transferee
court was created under the order of 1 950. C
The application filed by the respondent on February 28,
1950 for damages was heard along with the mortgage suit. The
learned Subordinate Judge decreed the suit on May 31, 1956,
but he also allowed the respondent’s application for damages
to the extent of Rs. 32,525. He directed that the Receiver
should pay the amount within two months, failing which the
amount should be recovered from the security of Rs. 50,000.
Civil Miscellaneous First Appeal No. 22 of 1956 filed by the
Receiver against that order was dismissed for default by the
Judicial commissioner, Tripura on December 18, 1959. But, he
allowed the respondent’s cross-objections and enhanced the
damages to Rs. 4],525.
On October 4, 1961 respondent filed in the court of the
Subordinate Judge, Execution Petition No. 39 of 1961 against
the Receiver and the appellant praying that execution do
issue, against the appellant as directed by the Court. The
appellant filed this objections to that petition but the
learned Judge rejected the objections and directed that the
damages awarded to the respondent be recovered from the
appellant. The appellant filed an appeal against that order
but it was dismissed by the learned Judicial Commissioner on
June 29. 1970. This appeal by special leave is directed
against that judgment.
Learned counsel appearing on behalf of the appellant
has raised two contentions (l) The Subordinate Judge who
tried the suit is incompetent to enforce the surety bond
executed by the appellant as he is neither the successor nor
the successor-in-office nor the assign of the District
Judge; and (2) Under the terms of the bond, the appellant is
not answerable for the loss caused to the tea garden by
fire.
Both of these contentions turn on the terms of the
surety bond and it is therefore necessary to have a look at
that bond.
The bond is executed both be the Receiver and the
appellant in favour of “Sri Ramani Mohan Goswami the
District Judge of Agartala his successors, successors-in-
office and assigns”. By the bond, the executants bound
themselves jointly and severally in the whole of the amount
of Rs. 50,000 up to the District Judge. Agartala, his
successors,
359
successors-in-office and assigns. The bond, though executed
on August 26, 1950, relates back to January 22, 1950 being
the date when the Receiver took possession of the property.
It is urged that the bond can be enforced only by or at
the instance af the District Judge, Agartala, or his
successors, successors-in-office of assigns and the
Subordinate Judge, Agartala not being either of these, it is
incompetent for him to enforce the bond. We see no
substances in this contention. The Subordinate Judge of
Agartala may not be the successors-in-office of the District
Judge because “successor-in-office” would mean successor of
the District Judge in the post or office of the District
Judge. But the Subordinate Judge, Agartala is, for the
purposes of the present proceedings, a successor of the
District Judge who was seized of the suit and who
transferred it to the Subordinate Judge under the Tripura
(Courts) order of 1950. The surety bond was executed in and
for the purposes of the particular proceedings which were
pending before the District Judge, in order that the bond
should be enforceable at the instance of the presiding
officer of the court. “Successor”, therefore, must in the
context mean the court which for the time being is seized of
the proceedings.
Under section 150 of the Code of Civil Procedure, save
as otherwise provided, where the business of any Court is
transferred to any other Court, the transferee Court has the
same powers and is entitled to perform the same duties as
those respectively conferred and imposed by the Code upon
the transferor Court. The surety bond was a part of the
proceedings pending before the District Judge and on the
transfer of the Suit the entire proceedings, including the
bond. stood validly transferred to the Court of the
Subordinate Judge. Thus, by virtue of section 150, the
Subordinate Judge was entitled to exercise the same powers
in the matter of the enforcement of the bond as the District
Judge himself.
Section 145(c) of the Code of Civil Procedure provides,
to the extent material, that where any person has become
liable as a surety for the fulfilment of any condition
imposed on any person under an order of the Court in any
suit or in any proceeding J consequent thereon, the decree
or order may be executed against the surety to the extent to
which he has rendered himself personally liable, in the
manner provided for the execution of decrees. By the surety
bond, the appellant rendered itself liable as a surety for
the fulfilment of the conditions imposed on the Receiver
under the orders passed by the court. Therefore, the order
for the recovery of damages obtained by the respondent
against the Receiver can be executed against the appellant
to the extent to which it rendered itself personally liable
under the terms of the bond.
There is no substance in the second contention either.
Under the bond, the appellant rendered itself liable “in
respect of any loss or. damage occasioned by any act or
default of the Receiver in relation to his duties as such
Receiver as aforesaid”. The fire having been caused due to
the Receiver’s negligence in the performance of his duties
the appellant is liable to make good the loss caused to the
tea garden by the
360
fire. Learned counsel for the appellant however urged that
the appointment of the Receiver was limited to the stock-in-
trade, machinery and movables in the tea garden and to the
factory premises and since the Receiver owed no obligation
in relation to the tea garden, the appellant would not be
liable for the loss caused thereto by the fire. Reliance is
placed in support of this argument on the words “as
aforesaid” which qualify the words “in relation to his
duties”. The surety bond has, undoubtedly, to be construed
strictly but it is impossible to accept the contention that
the Receiver owed no duty or obligation in respect of the
tea garden. He was put in possession of the tea garden in
his capacity as a Receiver and indeed parties had made
contentions from time to time as to whether the tea garden
was managed by the Receiver economically and efficiently.
The surety bond would therefore cover the loss occasioned to
the tea garden due to the Receiver’s default. It is
significant that though the bond was executed six months
after the tea garden was damaged by the fire it was given
retrospective operation with effect from January 22, 1950
being the date on which the Receiver had taken possession of
the mortgaged property including the tea garden.
For these reasons we confirm the judgment of the
learned Judicial Commissioner and dismiss this appeal with
costs.
V.M.K. Appeal dismissed.
361