Important Point
High Court has rightly held that appellant in this appeal cannot claim any rights under Ex. A6 the alleged Security Bond executed in OS 108/50.

Headnote:(i) Civil Procedure Code, 1908 -Order 41 Rule 33-Power of Court of appeal-Respondent had not filed any appeal against that part of the decree in favour of appellant-Whether appellate Court can vary or reverse it?
       Held : The general principle is that a decree is binding on the parties to it until it is set aside in appropriate proceedings, ordinarily the appellate Court must not vary or reverse a decree/order in favour of a party who has not preferred any appeal and this rule holds good notwithstanding Order XLI Rule 33 CPC. However, in exceptional cases the rule enables the appellate Court to pass such decree or order as ought to have been passed even if such decree would be in favour of parties who have not filed any appeal. The power though discretionary should not be declined to be exercised merely on the ground that the party has not filed any appeals. (Para 12)
       (ii) Nature of the document-Ex. A-6 Security Bond-Whether creates a charge over property or was only an undertaking, which could not amount to a charge? (The later).
       Held : The document Exhibit A-6 Security Bond does not in substance offer suit property by way of security. Even giving the most liberal construction to the document we cannot say that a charge as such has been created in respect of the suit property for money to be decreed in the suit. All that it states is that in the event of decree being passed not to alienate the property till the decree is discharged, which is a mere undertaking without creating a charge. Therefore, we agree with the finding of the High Court that the document at Exhibit A-6 is not a charge. (Para 17)
       (iii) Dispute between two competing Court Auction Purchasers on rights under Ex. A6-High Court holding that appellant cannot claim any rights under it-Whether correct? (Yes)-Appeal dismissed.
       Held : There is yet another reason as to why the High Court held that the appellant cannot claim any rights under Exhibit A.6 the alleged Security Bond executed in O.S. 108/50. The decree obtained in that suit was a simple money decree and not a decree on a charge or mortgage with the result the appellant who purchased the property in execution of that decree did not acquire the rights under the said document Ex. A.6. This finding appears to be correct. The decree holder sought to execute the decree in E.P. 305/62 to order sale of the suit property stating that the same is secured in the bond Ex. A.6. However, the executing court did not proceed on that basis and raised objections thereto. Thereafter, the decree holder sought for attachment of the suit property independent of the so-called charge under Ex. A.6. If really the decree holder in the proceedings wanted to proceed on the basis of the security arising out of charge under Ex. A.6. The requirement of attachment was superfluous. Whether the claim under Ex. A.6 arising out of charge was given up or not what was pursued in the execution proceeding was only to attach the suit property without recourse to charge under Ex. A.6. Therefore, the appellant could not have acquired any rights of mortgagee under Ex. A.6, the security bond. For this reason also appellant’s suit is liable to be dismissed and the finding of the High Court, therefore, stands affirmed. (Para 18)
       In the result the appeals stand dismissed and in the circumstances of the case there shall be no order as to costs. (Para 20)

Judgment

S. Rajendra Babu, J.-These appeals arise out of dispute between two competing court auction purchasers on the basis that the rights derived by each of them is superior to the other emerging out of alleged hypothecation of such property. Respondent filed a suit in O.S. 12 of 1967 on the files of II Subordinate Judge, Tiruchirappalli to restrain the appellant herein from interfering with respondents possession of the suit property. The appellant filed in the same court a suit in O.S. 211 of 1967 for redemption of the suit land, and recovery of possession thereof. The undisputed facts leading to the two suits are as under: The suit land belonged to one Ganesan who executed a registered security bond on 18.12.1950 for a sum of Rs. 3,000/- hypothecating the suit property and also executed a promissory note in favour of one Vairavan Chettiar and borrowed moneys. Vairavan Chettiar obtained a decree on the foot of the Security Bond and in execution thereof brought the suit property to sale. Respondent purchased the suit property in the said court auction sale on 6.2.1957 and the same was confirmed on 15.3.1957. Respondent took delivery of the property through court. Sandanam Mudaliar and Company filed O.S. No. 108 of 1950 for recovery of a sum of Rs. 6,493.10 against Ganesan. In that suit the plaintiffs got certain amounts due to Ganesan from the South India Railway attached before judgment. Ganesan filed I.A. No. 811 of 1950 in the said suit seeking for raising the attachment before judgment of the amount and it was ordered subject to his furnishing of security. Ganesan executed on 12.4.1950 a registered deed in respect of the said property for Rs. 7,000/- costs of the suit and subsequent interest. In this said deed recitals were made referring to the security bond dated 18.2.1950, executed in favour of Vairavan Chettian as a prior encumbrance. O.S. No. 108 of 1950 filed by Sandanam Mudaliar & Co. was decreed on 25.1.1956. Sandanam Mudaliar and Company in execution of the decree obtained by them brought the property to sale on 15.9.1962 and the original Appellant Muthuswami Gounder purchased the property on 14.12.1966 for Rs. 12,250/- which sale was confirmed on 19.1.1967.

2. The suit filed by appellant and the suit filed by Respondent were ordered to be tried jointly. One of the questions raised in the suit is whether the deed dated 12.4.1950 executed by Ganesan in O.S. 108/50 on the file of the court of Subordinate Judge Coimbatore original of Exhibit A-6 creates any charge or was it only an undertaking not to alienate the suit property. On this question the trial Court held at paras 13 and 14 as follows:-

“13. As said already, the document is named as a security deed. Exhibit A6 shows that non-judicial stamps for the value of Rs. 105 had been affixed. If it was merely a document for giving an undertaking not to alienate there was no necessity to affix stamps for Rs. 105, which is the correct value of stamps for the sum of Rs. 7000/-. In the document a specific immovable property (i.e.), suit property, is noted. It is specifically stated that for Rs. 7000/- and subsequent interest and costs this security bond is written. Even the prior encumbrance in favour of Vairavan Chettiar in respect of this property is noted. It is signed by Ganesan and attested by two witnesses. Taking all these factors found in Exhibit A6, taken along with the fact that the security was given as per order of Court in a petition to raise the attachment of the amount of Ganesan in the South Indian Railway, it is evident that the suit property was intended to be and was as a matter of fact, given as a security for the payment of the sum of Rs. 7000/-, costs and interest in the case.

14. It is thus evident that under Exhibit A6 a charge of a peculiar nature is created and “that here is an unquestioned liability and there must be some mode of enforcing it (in the words of their Lordships of the Privy Council in the ruling quoted supra). Exhibit A6 is

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1998 Supreme(SC) 898

Important PointHigh Court has rightly held that appellant in this appeal cannot claim any rights under Ex. A6 the alleged Security Bond executed in OS 108/50.

Cases Referred (1)

Important Point
High Court has rightly held that appellant in this appeal cannot claim any rights under Ex. A6 the alleged Security Bond executed in OS 108/50.