SUPREME COURT OF INDIA
A.N. RAY, C.J.I., K.K. MATHEW AND Y.V. CHANDRACHUD, JJ.
M/s. Howrah Insurance Co., Ltd. Appellant
Versus
Shri Sochindra Mohan Das Gupta, Respondent.
Civil Appeal No, 1611(N) of 1971,
D/20-8-1975.
Advocates Appeared
Mr. S. V. Gupte, Sr. Advocate, (M /s. D. N. Mukherjee and G. S. Chatterjee, Advocates with him), for Appellant; Mr. P.K. Chatterjee, Sr. Advocate (Mr. Rathin Das Advocate with him), for Respondent.
-The surety bond is part of the proceedings before the Court and on transfer of the suit, the entire proceedings including the bond stands transferred to the transferee Court and the Court to which the business of the Court is transferred can enforce the surety bond
-the surety bond has undoubtedly, to be construed strictly but it is impossible to accept the contention, as held in Howrah Insurance Co. v. Shri Sachindra Mohan Das Gupta, AIR 1975 SC 2051, 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 default of the Receiver.
Judgment
CHANDRACHUD, J. - By a deed of mortgage dated February 10, 1943 the respondent mortgaged a tea garden called the "Ishanchandrapur 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 Rangan Dutta was appointed as the Receiver subject of 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 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.
2. 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 bond was approved and accepted by the District Judge on October 10, 1950.
3. 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 1950.
4. 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. 41,525.
5. 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 court. The appellant filed his 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.
6. Learned counsel appearing on behalf of the appellant has raised two contentions : (1) 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.
7. Both of these contentions turn on the terms of the surety bond and it is therefore necessary to have a look at that bond.
8. The bond is executed both by the Receiver and the appellant in favour of "Sri Ramani Mohan Goswami the District Judge of Agartala, his successors, successors-i
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