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1934 Supreme(Mad) 332

IN THE HIGH COURT OF MADRAS
Kottapalli Lakshminarayana, minor by mother and guardian Rajalakshmamma
Versus
Kanuparti Hanumantha Rao
Decided On : 20.09.1934

The central legal point established in the judgment is the interpretation of the guarantee for the insolvency petition and the application of the principle of pious obligation in holding the sons liable for the suretyship debt.

Headnote:

Suretyship - Liability of Sons - Interpretation of Guarantee for Insolvency Petition

Fact of the Case:

The appeal concerned the liability of the sons of a deceased surety who had executed a security bond in 1919. The bond required the judgment-debtor to file an insolvency petition within one month, which was not done. The District Munsif held the sons liable, the Additional Sub-Judge did not, and the Second Appeal restored the District Munsif's decree.

Finding of the Court:

The court recognized the need to determine the sons' liability based on the classification of suretyship debts in ancient texts. The judgment concluded that the guarantee for the insolvency petition did not fall under the four recognized categories of suretyship debts, but the sons were still held liable on the principle of pious obligation, as the debt was neither illegal nor immoral.

Issues: The main issue was the interpretation of the guarantee for the insolvency petition and whether it fell under the recognized categories of suretyship debts.

Ratio Decidendi: The court found that the guarantee for the insolvency petition did not fit into the four recognized categories of suretyship debts, but still held the sons liable based on the principle of pious obligation, as the debt was considered neither illegal nor immoral.

Final Decision: The appeal was allowed, and the decree of the Sub-Judge was restored, with costs in favor of the appellants.

JUDGMENT

King, J.

1. The question in this appeal is a simple one, vis.,. whether the sons of one Kothapalli Venkatasubbayya who executed a security bond in 1919 and is now dead are liable on that bond. By the terms of the bond the surety undertook that a judgment-debtor would file an insolvency petition within one month, and the insolvency petition was not filed. The District Munsif of Bapatla held that the sons were liable. The Additional Sub-Judge of Bapatla that they were not, and in Second Appeal Pakenham Walsh, J. restored the decree of the District Munsif.

2. It is common ground at the hearing before us and was fully recognised in the judgment of Pakenham Walsh, J. that the question of the sons liability must first be determined with, reference to the classification of suretyship debts in the ancient Lai texts. Four kinds of such debts are distinguished (i) for appearance, (ii) for confidence or for honesty, (iii) for payment of money and (iv) for delivery of assets. Pakenham Walsh, J. holds that the guarantee that the judgment-debtor will file an Insolvency Petition falls under none of these four heads, and then proceeds to conclude that the sons are liable on the principle of pious obligation since this debt is neither illegal nor immoral.

3. With all respect to the judgment of the learned Judge we find it very difficult to appreciate his reasons for differing from the Sub-Judge. They are contained in one simple sentence. It seems to me that it is stretching language very widely to say that this man will file an Insolvency petition is the same as saying he is a respectable man. On the other hand it seems to us beyond all argument that what the surety say in his bond in effect is this. The judgment-debtor says he will file an Insolvency Petition. I know him. He is an honest man who will carry out his promise, and the Court can have confidence in his doing so. If this is not a guarantee for confidence or for honesty then those words can have no intelligible meaning. The learned Judge relies on no reported case nor is any authority cited before us to confine the meaning of these words to a guarantee that a man is a man of wealth and standing, and the phrase. He is a respectable man which is taken from Max Mullers Sacred Books of the East is obviously not meant to be restrictive or exhaustive but is clearly only a pharaphrase of the statement. He is an honest man in whom so far as the matter guaranteed is concerned you may have confidence.

4. We are accordingly of opinion that this appeal must be allowed with costs here and in Second Appeal, and the decree of the Sub-Judge be restored.

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