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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

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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:

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    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

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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

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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