A surety for a Court-appointed Receiver cannot unilaterally discharge themselves from liability by giving notice to the decree-holder under Section 130 of the Indian Contract Act; such discharge requires the express consent of the Court.

Asutosh Mookerjee and Rankin, JJ. -

is an appeal from an order made by Mr. Justice Greaves against a surety under S. 1, 5, Civil P. C. The facts material for the determination of the questions in controversy are really not in dispute and may be briefly stated.

On the 29th July 1920, a preliminary decree was made in a mortgage suit instituted by Howeson Brothers against the Harveys. On the same day, one of the defendants, W. S. G. Harvey, was appointed Receiver. On the 9th September 1920, the appellant, M. A. Mamooji, became surety for the Receiver. The surety bond stated as follows :

" If the said W. S. G. Harvey do and shall duly account for all sums of moneys which shall and have come into his hands as such Receiver as aforesaid and file all papers and his half-yearly accounts before a Judge of this Court, as directed by the said decree of the 29th July 1920, and do and shall duly and faithfully perform the duties as such Receiver as aforesaid, according to law, and in all respects discharge the duties and obligations which shall devolve upon him as such Receiver as aforesaid, and obey and carry out the said order and all other orders and directions which may hereafter be made and given by the said High Court in the said mortgaged properties, then and in such case the above written bond or obligation shall become void and be of no effect ; other wise the same will remain in full force and virtue."

On the 22nd July 1921, Mamooji made an application to be released from his obligations and covenants as stated in the security bond. This application was heard by Mr Justice Greaves on the 5th August 1921, but no order was made in favour of the petitioner. On the next day the solicitor for Mamooji wrote to the plaintiff and stated that as Harvey had not carried out his agreement with Mamooji, Mamooji did not wish to continue to guarantee the acts of Harvey in whom he could not any longer place confidence. Mamooji accordingly desired to be released from further liability. The letter, however, stated that Mamooji would hold himself under the bond al ready executed for all acts and omissions of Harvey till such date as he might be released from further acting by order of the Court which he would then seek to obtain. On the 10th August 1921, a similar letter was addressed by the solicitor to the plaintiff. The letter repeated that Mamooji did not wish to act any further as surety for Harvey and requested the plaintiff to apply to the Court for the removal of Harvey and for the appointment of the Court Receiver in his place. On the 2nd December 1921, the solicitors for the plaintiffs wrote to the solicitors for Mamooji with the result that on the 12th December 1921, Harvey was removed and Martell was appointed Receiver in his place. On the 19th May 1922, the Referee found that a sum of Rs. 32,806-14-3 was due from Harvey. On the 15th July 1922, an order was made by Mr. Justice Greaves on Harvey to pay this sum to Martell. Harvey was apparently unable to make the payment and on the 7th August 1922, an application was made to recover the sum from Mamooji. This application was dismissed on the 18th August 1922, as the bond which stood in the name of the Registrar had not been assigned to the Receiver. The assignment was effected on the 24th August 1922, and thereafter, the present application was made under S. 145, Civil P. C., on the 5th December 1922, to recover the sum from the surety. The position taken up by the surety was that he had effectively discharged himself by the notice he had given. This contention was overruled by Mr. Justice Greaves and an order was made against the surety in terms of S. 145, Civil P. C. In the present appeal, we have been invited to consider the propriety of this order.

On behalf of the surety, reliance was placed upon S. 130 of the Indian Contract Act and the decision in Rajnarain Mukherjee v. Phulcoomari Debi [1909] 29 Cal. 68 : 6 C. W. N. 7. This decision was doubted by the Madras High Court in Subrayya v.