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1932 Supreme(Nagpur) 127

HIGH COURT OF NAGPUR
Niyogi
SADASHEO KRISHNARAO BUTY – Appellant
Versus
SADASHIV RAMCHANDRA AND ANR – Respondent
Decided on : 30-11-1932

Liability of a surety for dishonesty of the principal debtor cannot be enforced against the surety's widow.

Headnote:

Suretyship - Liability of Surety - Acts: Service bond, Ex. P-12 - Summary: The court discussed the liability of a surety for honesty and the distinction between liability for payment and liability for honesty. It referred to various cases and ancient Hindu jurists to determine the nature of the suretyship and held that the liability incurred by the surety for dishonesty of the principal debtor cannot be enforced. The appeal was dismissed.

Fact of the Case:

The suit was filed for the recovery of amounts misappropriated by the defendant while in the plaintiff's service. The widow of the surety appealed against the decree, arguing against the liability to pay the surety-debt of her husband.

Finding of the Court:

The court held that the liability incurred by the surety for dishonesty of the principal debtor cannot be enforced against his widow.

Issues: The main point for determination was whether the liability incurred by the surety as can be enforced against his widow.

Ratio Decidendi: The court determined that the liability incurred by the surety was only for honesty and not for payment, and therefore, it cannot be enforced against his widow.

Final Decision: The appeal was dismissed with costs.

JUDGMENT

Niyogi, A J C—This appeal arises out of a suit filed by Sadasheo Krishnarao Buti against Sadashiv Ramchandra and Sheoganga, wife of Anandarupsa, for recovery of several amounts totalling Rs. 703 which were misappropriated by Sadasheo Ramchandra, while he was in the plaintiff's service. Mt. Sheoganga was impleaded in the suit as being the widow of Anandarupsa, who as a surety, had undertaken to reimburse any loss that would be caused to the plaintiff on account of the neglect or misconduct on the part of Sadasheo in the performance of his service. The agreement between the plaintiff and Sadasheo Ramchandra, defendant 1, together with Anandarupsa, the surety, was incorporated in a document executed on 5th April 1922. The trial Court decreed the suit against both the defendants. Sheoganga preferred an appeal against the decree, which was allowed by the third Additional District Judge, Amraoti. The plaintiff Sadasheo Krishnarao has come up in second appeal urging that Mt. Sheoganga was liable to pay the surety-debt of her husband Anandarupsa.

2. The only point for determination in this appeal is whether the liability incurred by Anandarupsa as surety can be enforced against his widow Mt. Sheoganga. On behalf of the appellant it is contended that Anandarupsa was a surety for payment and not merely for honesty. The material portion of the service bond, Ex. P-12, is as follows :

I shall do my work honestly and in obedience to the customs and orders. In case I act in contravention of the orders I shall be responsible for all the loss that might be caused from today till the date of my dismissal.

3. This was the covenant of the principal debtor. And the surety undertook the liability in these terms :

I hereby stand surety for the abovenamed person and bind myself to the effect that I shall make good to you all the loss of money that the abovenamed person may cause to you by acting in contravention to the agreement that he has made with you. Prom the date of his joining service till the date of his dismissal I shall compensate for that personally.

4. The contention is that since Anandrupsa expressly covenanted to compensate for any loss that would be caused by Sadasheo acting contrary to his agreement, he became a surety for payment. The principle debtor's agreement was to perform his work ''honestly'' and the surety agreed to make good the loss which would be caused by the violation of this stipulation, namely by the dishonesty of the principal debtor. The loss may be accrued by reason of the neglect or misconduct on the part of the servant. The loss which is due to neglect would give rise to civil liability, whereas the one due to dishonesty would give rise to criminal liability. Undertakings given by the surety, in so far it is intended to discharge a civil obligation may well be regarded as guarantee for payment. But the loss which arises from misconduct, namely, dishonesty of the servant cannot imply a civil liability on the part of the surety to compensate for the loss. The appellant relies on Tukarambhat v. Gangaram,1899 23 ILR(Bom) 454, Thangathammal v. Arunachalam Chettiar,1919 AIR(Mad) 831, Gopal Rao v. Berar Manufacturing Co. Ltd.,1905 1 NLR 178 and Maya-ram v. Bhaironprasad,1923 AIR(Nag) 115.

5. These cases lend no assistance to the solution of the question under consideration since in those cases the guarantee was for payment of a debt and not for honesty of an individual. According to the text of Brihaspati the sons are not liable to pay the debt incurred by the father of spirituous liquor, for losses at play, for idle gifts for promises made under the influence of love or wrath, or for suretyship, nor the balance of a fine or toll liquidated in part by their father. The surety debt of the father is ordinarily an avyavaharik debt unless the suretyship is for payment of money lent or for delivery of goods, but not when it is for appearance or for honesty. When a man guarantees to reimburse the loss caused by another's dis


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