1959 Supreme(AP) 45
Andhra Pradesh High Court
Judges : MANOHAR PERSHAD, MOHAMMED AHMED ANSARI
Mohd.Sultanuddin - Appellant
Versus
Mohd.Dastagir - Respondent
Decided On : 03-09-59
Important Points
Subject
Limitation Act - Period of Limitation for Suit Against Surety
Act Referred
LIMITATION ACT : Art.115, Art.120, Art.132
Headnote
LIMITATION ACT - SURETY - ARTICLE 115 - APPLICABILITY - PERIOD OF LIMITATION FOR SUIT AGAINST SURETY ON UNREGISTERED BOND IS THREE YEARS.
Fact of the Case:
Plaintiff filed a suit against the surety (appellant) and the principal debtor (2nd respondent) for the recovery of Rs. 937.00. The plaintiff claimed that the 2nd respondent had borrowed Rs. 1500.00 from him and executed a mortgage deed for Rs. 2000.00, including profits, and the appellant stood surety for him by executing a bond on the same date. The appellant admitted executing the bond but pleaded that the entire amount due under the bond had been paid and that the claim against him was barred by limitation. The trial court dismissed the suit against both defendants, but the appellate court allowed the appeal and decreed the suit to the extent of Rs. 487.00.
Finding of the Court:
The court held that the period of limitation prescribed against the surety (appellant) was three years under Article 115 of the Limitation Act since the surety bond was unregistered. The court further held that the appellate court erred in holding that Rs. 400.00, which was admittedly received by the plaintiff, was included in the amount of Rs. 1100.00, as the evidence on record sufficiently proved that this amount had nothing to do with the suit transaction.
Issues: 1. What is the period of limitation prescribed against a surety on an unregistered bond? 2. Whether the appellate court erred in holding that Rs. 400.00, which was admittedly received by the plaintiff, was included in the amount of Rs. 1100.00?
Ratio Decidendi: 1. The liability of the surety and that of the principal debtor are distinct because the liability of the surety does not necessarily, in all cases, arise simultaneously with that of the principal. 2. Article 115 of the Limitation Act applies to the claim of the plaintiff against the surety on an unregistered bond, and the period of limitation is three years. 3. The appellate court erred in holding that Rs. 400.00, which was admittedly received by the plaintiff, was included in the amount of Rs. 1100.00, as the evidence on record sufficiently proved that this amount had nothing to do with the suit transaction.
Final Decision: The appeal was allowed. The judgment and decree of the appellate court in so far as it was against the appellant was set aside, and the suit against him was dismissed. As against the 1st defendant, the judgment and decree of the appellate court was upheld.
( 1 ) THIS is an appeal on behalf of the 2nd defendant against whom and the 1st defendant (2nd respondent herein) a suit was filed for the recovery of Rs. 937. 00 O. S. The plaint allegation was that the 2nd respondent had borrowed a sum of Rs. 1500a from him in cash agreeing to repay the same together with a sum of Rs. 500. 00 on account of profits. According to the plaintiff; the 2nd respondent executed a mortgage deed in his favour for Rs. 2000. 00, (Rs. 1500/- being the amount advanced and Rs. 500. 00 being the profits) and the appellant stood surety for him after executing a bond on 28th Amardad 1355f (3-7-1946) i. e. on the date of the execution of the mortgage bond undertaking the liability to pay the sum of Rs. 2000. 00. The plaintiff avers that a sum of Rs. 1100. 00 has been paid towards this mortgage bond and the balance, according to him, was Rs. 900. 00. Including the registration charges for the mortgage bond, the plaintiff claimed Rs. 937/~ as stated earlier. The 2nd respondent, who was the 1st defendant in the trial court, was absent and he was set ex parte. The appellant in his written statement, while admitting-the execution of the bond, pleaded that there was no amount due, as the whole amount due under the bond had been paid. He also pleaded that the claim as against him was barred by limitation. The trial court, on the evidence accepted the payment pleaded by the appellant and dismissed the suit as against him and the 2nd respondent. Aggrieved by the judgment and decree of the trial court, the plaintiff filed an appeal to the lower appellate court, which disagreed with the trial court and held that only the payment of Rs. 1100. 00 inclusive of Rs. 400. 00 has been proved. In the result the appellate court allowed the appeal, set aside the judgment and decree of the trial court and decreed the suit to the extent of Rs. 487. 00 O. S. Aggrieved by the judgment and decree is this second appeal, which initially carne up for arguments before our learned brother Srinivasachari, J. who having regard to the importance of the question of law involved, has referred this to a Bench.
( 2 ) THE question of law is what is the limitation prescribed against a surety. The contention of the learned counsel for the appellant is that the suit by the plaintiff is for the recovery of the mortgage money from the defendant personally and not " from the property and though the period of limitation as against the 2nd respondent is 6 years, but as against the appellant, he urges, the document being unregistered it would be three years and therefore the suit is barred by limitation. Reliance is placed upon the case of Charu Chandra v. L. Faithful, AIR 1919 Cal 636, and of P. C. Muthu Chettiar v. Rengappa Naidu, AIR 1927 Mad 945 (1 ). He next contended that the appellate court has erred in holding that Rs. 400. 00, which admittedly had been received by the plaintiff (1st respondent herein) was included in Rs. 1100. 00, when the evidence on record does not warrant such a conclusion and if this payment is accepted no amount would be due to the plaintiff. On behalf of the plaintiff respondent it is contended that the liability of the surety and that of the principal debtor being co-extensive the period of limitation prescribed for both would be the same and the appellate court has rightly held that no question of limitation arises at all. Reliance is placed on the case of Daljit Singh v. Harkishan Lai, AIR 1940 All 116. It is further urged that even if it is held that the period of limitation prescribed for the surety is not the same as that prescribed for the principal debtor, article 115 08 the Limitation Act would not be applicable. On the other hand he urges that the article applicable would be Article 132 or Article 120. As regards the receipt of Rs. 400. 00, it is contended that the lower appellate court has erred, in holding that this amount is included in the amount of Rs. 1100. 00, when the evidence on record sufficien