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1936 Supreme(Mad) 443

IN THE HIGH COURT OF MADRAS
Varadachariar, J.
The Firm of Ayili Mallappa Sanna Jembappa by partner Bharmappa
Versus
Parasetti Sidramappa and Anr.
Decided On : 24.11.1936

The main legal point established in the judgment is the interpretation of Section 141 of the Contract Act and the provisions of Order 34, Rule 14 of the Civil Procedure Code in determining the discharge of the surety and the rights of the plaintiff and the second defendant to enforce the mortgage.

Headnote:

Surety - Discharge of surety under Section 141 of the Contract Act - [Mortgage Bond, Suretyship] - [Section 141 of the Contract Act] - The court discussed the discharge of the surety under Section 141 of the Contract Act, which provides that if the creditor loses or parts with any security held by him against the principal debtor, the surety is discharged to the extent of the value of the security. The court analyzed the plaintiff's conduct and concluded that the plaintiff's statement in the plaint did not amount to relinquishment of the mortgage right, and the mortgage right could not be held to have been extinguished due to lack of a registered document. The court also referred to Order 34, Rule 14 of the Civil Procedure Code, which allows a mortgagee to enforce the mortgage despite not claiming relief by way of sale. The court held that the plaintiff and the second defendant still had the right to sue to enforce the mortgage, and therefore set aside the lower court's decree.

Fact of the Case:

The case involved an action against a principal debtor and his surety, where the second defendant appealed to be exonerated from liability due to the plaintiff giving up rights under a mortgage bond executed by the first defendant. The lower appellate Court accepted this contention and dismissed the suit.

Finding of the Court:

The court found that the plaintiff's statement in the plaint did not amount to relinquishment of the mortgage right, and the mortgage right could not be held to have been extinguished due to lack of a registered document. The court also held that the plaintiff and the second defendant still had the right to sue to enforce the mortgage, and therefore set aside the lower court's decree.

Issues: The issues involved the discharge of the surety under Section 141 of the Contract Act and the interpretation of the plaintiff's conduct in the case.

Ratio Decidendi: The court's decision was based on the interpretation of Section 141 of the Contract Act, the plaintiff's conduct, and the provisions of Order 34, Rule 14 of the Civil Procedure Code.

Final Decision: The second appeal was allowed, and the decree of the lower court was restored, as the plaintiff and the second defendant still had the right to sue to enforce the mortgage.

JUDGMENT

Varadachariar, J.

1. This second appeal arises out of an action instituted against a principal debtor and his surety. The debt was due by the first defendant under a mortgage bond executed by him; and the second defendant had made himself liable for the sum as surety under Ex. K. The defences raised in the case were over-ruled by the first Court which gave a decree to the plaintiff against both the defendants. The second defendant appealed to the lower Court on the ground that he should be held to have been exonerated from all liability by reason of the plaintiff having given up his rights under the mortgage bond executed by the first defendant. The lower appellate Court accepted this contention and dismissed the suit. The decree of the lower appellate Court is very loosely worded and even suggests that it might be construed as a total dismissal of the suit. But it is obvious that the District Judge could not have meant to dismiss the suit even as against the first defendant; if necessary I should be prepared to set right that mistake. Against the lower appellate Court the plaintiff has preferred this appeal, contending that the circumstances of the case are not sufficient to warrant the exoneration of the second defendant under Section 141 of the Contract Act and that a decree should have been given against the second defendant as well.

2. The question of the discharge of the second defendant by reason of the relinquishment of the mortgage right by the plaintiff was raised by the fifth issue in the case. So far as I am able to gather from the available records, the argument as to relinquishment is based upon a statement in the plaint to the following effect: "The plaintiffs have given up only the mortgage right and filed the suit as on a simple bond." Mr. Sitarama Rao, the earned Counsel for the appellant, has translated the vernacular in a slightly different form, but I am content to accept the translation in the above terms given by Mr. V.S. Narasimhachari as this is also the translation adopted by the learned District Judge. Neither of the earned Counsel appearing in the case is able to enlighten me as to the circumstances which led to this allegation in the plaint. No attempt has been made either by cross-examination of the plaintiffs witnesses, or by any independent evidence adduced^ on the other side, to suggest that there was any relinquishment of the mortgage right by the plaintiff except by reason of the above statement contained in the plaint. The only reasonable construction of this statement in the plaint is that the plaintiff is content to enforce the bond as a money claim and does not want a mortgage decree.

3. I am free to admit that it passes my comprehension why or under what advice the plaintiff came to make this statement in the plaint. It could not have saved him even a pie by way of diminution of the court-fee; not even the most idiotic client would have taken such a step if he had been advised as to the danger that he ran by making such a gratuitous statement for no purpose. I can only express my regret that such is the kind of help and advice still available to litigants. However, if the case clearly falls under Section 141 of the Contract Act it is my duty to apply the law independent of any personal regret of mine. But I am glad to be able to hold that this foolish conduct of the plaintiff has not really deprived him of his rights against the surety.

4. Section 141 of the Contract Act provides that if the creditor loses or without the consent of the surety, parts with any security held by him against the principal debtor at the time when the contract of suretyship was entered into, the surety is discharged to the extent of the value of the security. With reference to the concluding words of the section, Mr. Sitarama Rao contended that even on the view taken by the lower appellate Court, it ought not to have wholly dismissed the suit as against the second defendant but directed an enquiry as to th



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