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CALCUTTA HIGH COURT
Stephen, J., Mitra, J., Harington, J., Geidt, J., Francis W. Maclean, J.
Debendra Nath Dutt and Banku Behary Banerjee - Appellant
Versus
Administrator-General of Bengal - Respondent
Decided On : 23-03-1906
Suretyship - Administration Bond - Indian Succession Act, 1865, Sections 214, 234, 256, 257, 262, 328 - Indian Contract Act, 1872, Sections 142, 143, 20, 128 - Administrator-General's Act, 1874, Section 33 - The court held that the sureties on an administration bond were liable for the misappropriation of the estate assets by the administrator, even though the grant of letters of administration was void ab initio due to fraud. The court reasoned that the sureties' liability was not dependent on the validity of the grant but on their guarantee of the administrator's honest administration. The court also rejected the argument that the sureties were discharged due to mutual mistake or misrepresentation by the court. The court further held that the sureties were liable for the proceeds of sale of the bank shares, even though the shares might be recoverable from the purchasers, as the sureties had not taken steps to recover the shares.
Fact of the Case:
An administrator obtained letters of administration by fraud, misrepresenting his authority as attorney of the next of kin. He then sold estate assets, including bank shares, and misappropriated the proceeds. The executors of the will later discovered the fraud and obtained fresh letters of administration for themselves. The Administrator-General sued the sureties on the administration bond to recover the misappropriated assets.
Finding of the Court:
The court found that the grant of letters of administration to the administrator was void ab initio due to fraud. However, the court held that the sureties on the administration bond were liable for the misappropriated assets. The court reasoned that the sureties' liability was not dependent on the validity of the grant but on their guarantee of the administrator's honest administration. The court also rejected the argument that the sureties were discharged due to mutual mistake or misrepresentation by the court. The court further held that the sureties were liable for the proceeds of sale of the bank shares, even though the shares might be recoverable from the purchasers, as the sureties had not taken steps to recover the shares.
Issues: Whether the sureties on an administration bond were liable for the misappropriation of the estate assets by the administrator, even though the grant of letters of administration was void ab initio due to fraud. Whether the sureties were discharged due to mutual mistake or misrepresentation by the court. Whether the sureties were liable for the proceeds of sale of the bank shares, even though the shares might be recoverable from the purchasers.
Ratio Decidendi: The court held that the sureties' liability was not dependent on the validity of the grant but on their guarantee of the administrator's honest administration. The court also rejected the argument that the sureties were discharged due to mutual mistake or misrepresentation by the court. The court further held that the sureties were liable for the proceeds of sale of the bank shares, even though the shares might be recoverable from the purchasers, as the sureties had not taken steps to recover the shares.
Final Decision: The court dismissed the appeals and held the sureties liable for the misappropriated assets.
JUDGMENT
Francis W. Maclean, K.C.I.E., C.J. - These two appeals are brought against a judgment and decree of this Court in its Original Jurisdiction in favour of the Administrator-General of Bengal for Rs. 1,07,159-9 against the appellants, on an administration bond executed by them, conditioned for the due performance by Ernest Cowie of his duties as Administrator-General of the estate of Edmund Craster Craster, deceased.
2. Edmund Craster Craster died in August 1898 in England, leaving assets of considerable value in this country. The bulk of these assets consisted of 86 1/2 shares in the Bank of Bengal.
3. On July 29th 1902 Ernest Hardwicke Cowie, a member of the firm of Sanderson & Co., the Solicitors of the Government of India in Calcutta, and who was then regarded as a man of high probity and position, alleging, that Edmund Craster Craster had died on August 31st 1900, leaving one Henry Craster Craster, his only son and next of kin, applied for letters of administration to the deceased's estate. He produced in support of his application a document, which purported to be a power-of-attorney duly executed by Henry Craster Craster, and he filed the necessary affidavit and made the usual affirmation. On this evidence the order granting letters of administration was made in due course, and Cowie then did that which he was obliged to do u/s 256 of the Succession Act, as amended by Act VI of 1889, section 6, before the letters so granted could issue from the office, namely, gave a bond with one or more sureties (in this case the two appellants) engaging for the due collection, getting in, and administering the estate of the deceased. The sureties, apparently, were strangers to Cowie, but they each received a bonus for accepting the suretyship, one of Rs. 300 and the other of Rs. 200. At that time Cowie's character stood very high. This bond was taken in the name of the Chief Justice of Bengal. Amongst other questions raised the appellants say that the bond was, improperly taken in the name of the Chief Justice.
4. The letters of administration to Cowie were in the following manner:
Hereby maketh known that on the twenty-ninth day of July in the year one thousand nine hundred and two, letters of administration of the property and credits of Edmund Craster Craster, late a British subject and a retired member of the Indian Civil Service, residing at Beadnell, in the county of Northumberland in England, deceased, were granted to Ernest Hardwicke Cowie, of No. 30 Dalhousie Square, Calcutta, Attorney-at-Law, and one of the constituted Attorneys of Henry Craster Craster, who is at present residing beyond the jurisdiction of this Court, the only son of the said deceased (with effect within the Province of Bengal) for the use and benefit of the said Henry Craster Craster and limited until he, the said Henry Craster Craster, shall obtain from this Court letters of administration of the property and the credits of the said deceased, he, the said Ernest Hardwicke Cowie, having undertaken to administer the said property and credits and to make a full and true inventory thereof and exhibit the same in this Court within six months from the date of this grant, or within such further time as the Court may from time to time appoint, and also to render to this Court a true account of the said property and credits within one year from the same date or within such further time as the Court may from time to time appoint. Dated at Fort William aforesaid this 16th day of August in the year 1902;" and the bond was as follows:
Know all men by these presents that we, Ernest Hardwicke Cowie of No. 30-2 Dalhousie Square, Calcutta, Attorney-at-Law, and one of the constituted Attorneys of Henry Crastcr Craster, the only son of Edmund Craster Craster, deceased, and Debendra Nath Dutt of No. 18 Tamer's Lane in Calcutta aforesaid, and Banku Behary Banerjee of No. 81 Baranoshee Ghose's Street in Calcutta aforesaid, are held and firmly bound unto the Hon'ble Sir Franci
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