HIGH COURT OF ORISSA
PANIGRAHI,P.V.B.RAO, JJ.
Dandapani Panda
Versus
D.F.O.Ghumsur
O. J. C. No. 173 of 1955
Decided On : 09-11-1955
Art. 227 - Surety Liability - The court found that the demand for payment from the petitioner as a surety was prima facie unsustainable in law, and the court would not be justified in putting the petitioner to harassment and expense by driving him to the Civil Court for establishing his right when the position leaves no room for doubt.
Fact of the Case:
The petitioner, son of a contractor's surety, challenged the validity of a demand for payment of dues from a contract executed by his father, who stood surety for the contractor. The petitioner argued that he was not liable for the surety debt as it was an avyavaharika debt.
Finding of the Court:
The court found the demand for payment from the petitioner as a surety to be prima facie unsustainable in law and directed the opposite parties to withdraw the warrant issued against the petitioner and refund the amount collected from him under threat of attachment of his properties.
Issues: Validity of demand for payment from the petitioner as a surety, liability of the petitioner for the surety debt, and alternative remedy for the petitioner.
Ratio Decidendi: The court held that the demand for payment from the petitioner as a surety was prima facie unsustainable in law, and the petitioner was not liable to discharge the avyavaharika debt contracted by his father as a surety.
Final Decision: The petition was allowed, and the opposite parties were directed to withdraw the warrant issued against the petitioner and refund the amount collected from him. The petitioner was also awarded costs of the application.
Judgement
PANIGRAHI, C. J :- This is an application under Art. 227 of the Constitution questioning the validity of the order of opposite party 1 directing the petitioner to pay up the dues in respect of a contract executed by one Lakshminarayan Panda in favour of the opposite party. The facts are that Lakshminarayan Panda purchased Tilika Coupe No. II, Lot No. I of the Ghumsur South Division, at a public auction, and executed an agreement on 13-9-1949, in favour of the Government of Orissa through opposite party. The father of the petitioner (Mahadev Panda) stood surety for the contractor.
A sum of Rs. 3600/- having been outstanding against the contractor, the same is sought to be realised from the properties belonging to the petitioner who is the undivided son of Mahadev. Mahadev Panda died on 4-5-1950. A distress warrant was issued against the petitioner on 16-11-1954 for recovery of the amount outstanding against the contractor.
The petitioner appealed to the Divisional Forest Officer, the Conservator of Forests and to the Collector of Ganjam complaining that he was not liable for the payment of the surety debt contracted by his father, and that he was being unnecessarily harassed by the Forest Department authorities. As he did not get relief he has come up to this court with this application praying that the requisition signed by the Taluk Officer, Surada, to realise the dues from him should be declared illegal and should be withdrawn.
2. It appears that the petitioner has paid a part of the arrears under duress and he has therefore prayed that the amount so paid should toe refunded to him.
3. The original demand was subsequently revised and the present levy is fixed at Rs. 1804-14-0. The Divisional Forest Officer filed at counter-affidavit in which it is averred that Mahadev Panda entered into a partnership with Lakhminarayan Panda and some other persons on 31-3-1950, whereby they agreed to carry on timber business and take leases of forest coupes. It is accordingly said that the petitioners father was liable to make good the loss sustained by the Forest Department. The bond executed by Mahadev Panda on 14-9-1949 is quoted in full in the counter affidavit and reads as follows :
"I do hereby undertake that I am solely responsible for the payment of any amount of Government dues defaulted by Shri Lakhminarayan Panda in connection with Tiliki Coupe No. 2, Lot I".
It is not clear from this bald statement whether there was any consideration in support of this agreement entered into by the petitioners father. Clearly, the bond amounts to no more than a surety bond guaranteeing the honesty of the contractor. The manager of a coparcenary, no even the father, can contract an avyavaharika debt so as to make the coparcenary liable for its discharge. The substantial plea taken by the petitioner, therefore, is that the agreement was for the payment of dues of Shri Lakshminarayan Panda and as the surety-debt contracted by him is an avyavaharika debt he is not liable to discharge it.
The contention raised on behalf of the opposite parties is that the petitioner has an alternative remedy, by way of a suit for a declaration that the debt is not recoverable by the Forest Department as it is repugnant to law and that therefore this Court should refrain from exercising its jurisdiction under Art. 226. We are satisfied, however, that the demand is prima facie unsustainable in law and we would not be justified in putting the petitioner to harassment and expense by driving him to the Civil Court for establishing his right when the position leaves no room for doubt.
We are also not impressed by the stand taken by opposite party No. 1 that Mahadev Panda (the father of the petitioner) was under a contractual liability by reason of the subsequent partnership agreement to discharge the dues of the Forest Department executed on 31-3-1950 about 6 months after the execution of the surety bond.
4. It may also be mentioned that the demand appears to be prima facie
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