1983 Supreme(MP) 654

IN THE HIGH COURT OF MADHYA PRADESH
J. S. VERMA, J.
Durg Mat's Udyog - Appellant
Versus
Durg Mat's Udyog Sahkari Samiti - Respondent
C. R. No. 674 of 1981 (J)
Decided On : 25-03-1983

Headnote:(1) Execution – surety for damages – liable for actual amount of loss and not for whole amount of bond – amount of damages is to be ascertained in execution.

       (2) Civil Procedure Code, 1908 – O.39, R. 2(2) – security taken for granting temporary injunction – surety is liable to the extent of actual damages and not to the amount of bond which is the upper limit of his liability.

        Short Note

       1. The Petitioner No. 1 filed a suit against the respondent to which a temporary injunction was claimed. The temporary injunction was granted in the suit and the plaintiff was directed to furnish security for the amount of Rs.30,000/ – to ensure recovery of compensation, in case, the suit ultimately fails. Petitioner No. 2 furnished the security as a result of which the temporary injunction continued till decision of the suit. That suit was ultimately dismissed. The respondent has thereafter made an application for recovering the amount of Rs. 30,000/ – for which surety had been furnished by the petitioner No.2, on the basis of the surety bond. An objection to the recovery was raised by the petitioner which has been rejected hence this revision.

       2. Held : The only contention of Shri A. K. Choube, learned counsel for the petitioners, in support of this revision is that no further steps in execution could be taken without determining the quantum of compensation recoverable from the surety and this not having been done, the further proceedings of the executing Court are illegal. Learned counsel argues that the sum of Rs. 30,000/ – for which surety was furnished only indicates the upper limits upto which the surety is liable, but dismissal of the suit does not result in permitting the respondent to automatically recover that entire amount since it is only the amount of compensation determined as payable which can be recovered from the surety. Learned counsel placed reliance on the recent decision of this Court in Civil Revision No. 1253 of 1981 decided on 4 – 3 – 1983 (S. Rawal Singh v. Alakram) to support his contention.

       3. In my opinion, this revision has to be allowed and the decision relied on by learned counsel for the petitioners also supports this conclusion. The liability of the surety is undoubtedly for payment of compensation to the extent of Rs. 30,000/ – for which surety was furnished, but it is only for the amount of compensation which is quantified in an enquiry affording opportunity to both sides for the purpose. It has to be decided on the basis of evidence led by the parties as to what is the extent of loss suffered by the respondent as a – result of the temporary injunction granted in plaintiff's favour in the suit and on determination of that amount the surety would be liable for payment of that amount upto the extent of Rs. 30,000/ – for which he stood surety. No such enquiry having been made for quantifying the amount of compensation recoverable, the action of executing Court to recover straight way the amount for which the surety – bond was furnished is clearly illegal.

       4. Consequently, this revision is allowed. The order under revision is set aside and the Court below is directed to decide the application made by the respondent in the light of the above observations after giving an opportunity to the parties to lead evidence for determining the amount of compensation payable to the respondent for the period during which the respondent was kept out of possession as a result of the temporary injunction. C. R. No. 1253 of 1981 dated 4 – 3 – 1983 relied on.

       Revision allowed.