Back
Andhra Pradesh High Court
Judges : A.SEETHARAM REDDY
Bank of India - Appellant
Versus
Vijay Transport - Respondent
Decided On : 04-27-88
RESTITUTION - SECURITY BOND - ENFORCEABILITY - INHERENT POWERS OF COURT - SECTION 144, 145, 151 CPC - INTERPRETATION - GUARANTEE BOND EXECUTED IN COURT - LIABILITY OF SURETY - EXTENT - REVIEW - ERROR OF LAW - MANIFEST ERROR - EQUITABLE REMEDY - WRONG PROVISION OF LAW - RELIEF - COURT'S DISCRETION.
Fact of the Case:
The petitioner-Bank filed a suit against M/s. Vijay Transport and others for recovery of a sum of Rs. 18, 14, 817-97. The Sub-Court decreed both the suit as well as the counter claim. The petitioner preferred an appeal to the High Court, which was allowed for Rs. 8,14,324-92 resulting in the dismissal of the counter claim. The petitioner filed three E.As. before the Sub-Court, Eluru, seeking restitution of Rs. 16 lakhs deposited by the petitioner-Bank pursuant to the conditional order made by the High Court. The Sub-Court, Tadepalligudem eventually allowed the review petition holding that the Karnataka Bank, respondent No. 6, becomes liable only on the failure of the 2nd respondent for herself and on behalf of the 1st respondent to duly discharge her liability. Consequently, E.A. Nos. 363/84, 196/85 and 197/85 were dismissed. The petitioner-Bank filed three revision petitions before the High Court.
Finding of the Court:
The High Court held that the security bond executed by the Karnataka Bank in favour of the court cannot be enforced under Section 145 CPC, but it can be enforced in the execution proceedings under Section 151 CPC, as no separate suit is necessary. The Court further held that the surety's liability is co-extensive with that of the principal-debtor and that the surety can be proceeded against before initiating proceedings against the judgment-debtor. The Court also held that the lower court erred in reviewing the order passed earlier, as there was no manifest error of law. The Court set aside the order of the lower court and directed it to initiate necessary proceedings for the recovery of the amount from the 1st respondent, Vijay Transport, and to pass necessary orders for payment in turn to the petitioner-Bank.
Issues: 1. Whether the security bond executed by the Karnataka Bank in favour of the court can be enforced under Section 145 CPC? 2. Whether the surety's liability is co-extensive with that of the principal-debtor? 3. Whether the surety can be proceeded against before initiating proceedings against the judgment-debtor? 4. Whether the lower court erred in reviewing the order passed earlier?
Ratio Decidendi: 1. Section 145 CPC applies to personal liability and a security bond executed by a judgment-debtor in favour of the Court cannot be enforced under it. But such a bond can enforced in the execution proceedings under S. 151, and no separate suit is necessary. 2. The surety's liability is co-extensive with that of the principal-debtor. 3. The surety can be proceeded against before initiating proceedings against the judgment-debtor. 4. The lower court erred in reviewing the order passed earlier, as there was no manifest error of law.
Final Decision: The High Court allowed the revision petitions, set aside the orders passed in E.A. No. 363/84, E.A. No. 196/85 and e.A. No. 207/85 dated 30-12-1985, and directed the lower court to initiate necessary proceedings for the recovery of the amount from the 1st respondent, Vijay Transport, and to pass necessary orders for payment in turn to the petitioner-Bank.
( 1 ) BY a common order, these three revision petitions could be disposed of, as they are inter-related involving common point.
( 2 ) THESE three revision petitions arise under the following circumstances:- bank of India, who is the revisionist in all the three revision petitions, filed the suit, o. S. No. 12/75, against M/s. Vijay Transport, madras and others for recovery of a sum of Rs. 18, 14, 817-97 on the file of the sub-Court, Eluru. M/s. Vijay Transport (defendant No. 1), Sunkavalli Rajalakshmi (defendant-No. 3), Sunkavalli Venkatakrishna parvatalu (defendant No. 4) and sunkavalli Annapurnamma (defendant no. 14) put in a counter claim. The Sub-Court, eluru decreed both the suit as well as the counter claim. The petitioner, bank of India, preferred an appeal to this court in AS No. 858/76 against the said decrees- In the appeal,. stay was granted on condition of deposit of a sum of Rs. 16 lakhs by the petitioner-Bank, which was in turn enabled to be withdrawn by the respondents-defendants on furnishing bank guarantee. The said amount was withdrawn by the 1st defendant for which at first the United Commercial Bank gave security which was later replaced on cancellation by the Karnataka Bank. The said appeal Suit however was allowed by judgment and decree dated 20-9-1983 for rs. 8,14,324-92 resulting in the dismissal of the counter claim.
( 3 ) IT is thereafter the following three E. As. were filed by the petitioner-Bank before the Sub-Court, Eluru. E. A. No. 363/84 was filed seeking a direction to the Karnataka Bank for the restitution of rs. 16 lakhs by depositing the same in the court, E. A. No. 364/84 was filed seeking a direction for the restitution of Rs. 16 labhs with interest and E. A. No. 365/84 for a direction for the restitution of interest. Thereafter, the Sub-Court, Eluru made an order dated 1-8-1985 in E. A. No. 363/84 directing the Karnataka Bank, respondent no. 6 herein, to deposit Rs. 16 lakhs into the Court, which was deposited. Soon thereafter, applications were filed by the respondents-defendants to stay all the proceedings and not to make payment to the petitioner-Bank, while at the same time seeking to review the order made in e. A. No. 363/84. However, the case was posted on 16-8-1985 for final orders. But then on the filing of O. P. No. 215/85 by the respondents-defendants before the district Court, Eluru, all the proceedings were stayed. After the dismissal of the o. P. , the respondents-defendants preferred a Transfer Civil Miscellaneous Petition in the High Court under Section 24 C. P. C. , for transferring all the applications including the records in O. S. No. 12/75 from the file of the Sub-Court, Eluru to the file of the Sub-Court, Tadepalligudem, which was ordered. The Sub-Court, tadepalligudem eventually allowed the review petition on 30-12-1985 holding that the Karnataka Bank, respondent No. 6, becomes liable only on the failure of the 2nd respondent for herself and on behalf of the 1st respondent to duly discharge her liability. Consequently, E. A. Nos. 363/84, 196/85 (E. A. No. 354/84 on the file of elaru Sub-Court) and 197/85 (E. A. No. 365/84 on the file of Eluru Sub-Court) were dismissed. However, the Sub-Court tadepalligudem allowed the application for restitution of costs which were withdrawn by the 1st defendant. ft also ordered the application for payment of costs with interest at 6% from the date of withdrawal till the date of realisation. Hence, the following three revision petitions by the petitioner-Bank : 1) C. R. P. No. 1/86 against the order made on 30-12-1985 dismissing E. A. No. 363/84 by the Sub-Court, Tadepalligudem. 2) C. R. P. No. 2/86 against the order made on 30-12-1985 dismissing E. A. No. 196/85 (E. A. No. 364/84 on the file of sub-Court, Eluru), sought for restitution of Rs. 16 lakhs with interest. 3) C. R. P. No. 3/86 preferred against the order dated 30-12-1985 allowing E. A. No. 207/85 (E. A. No. 469/85 on the file of Sub-Court, Eluru) and r
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
