# Raghunandan v. Kirtyanand

- **Citation:** [1964] 2 S.C.R. 152
- **Court:** Supreme Court of India
- **Decided:** 1964
- **Bench:** K. Subba Rao, ICHrnt;BAll DAYAL anJ .J. R. :.11wHOLKAR .J
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/raghunandan-v-kirtyanand-2832
- **Pages:** 14

## Headnote

,)'urr:ly }~rnvl-C'nn'!-lructlnn of-Corviitions for RnforcemP-nt
-If Ju((t!lr:tl-[Ji'lpluccrl 1{1./,fur ·-Appiicr1tion for rtt[j11_qfn1r11t. of
dcbl-'l-[li::tu1n
for uxvit of fr:rr1!1Jrit'l[ j11risdictio11---Appr.1Jl-
()i1:li (}ourL if 1r111.i;t sf11y
r:.1:< r1111:rui prnrr."d;·ngs-{:/11lP of Ci1:il
J»roc~rl11re. l.'iOS (.
1!r.t V of /!lfJ\), A. 145--!Ji.'lpiar.ul J;r.r.<uJ11s
(/ichts Adj1o'lme11t) Act, ]!J.)/ (LXX of JYcj/), "'·ii, 15.
·r filed a
suit against .\1 and oUtaincd a:1 t.>rder for
attarfnnr.nt b<":forc judg1ncr.r of certain bills due for p.1yrnent
to
~L 1'hc biils \\'Crc rclc.l'iCJ fro:n attacluncnt upon
~f
fun,ishing surctit~s i11clu<lin~ tilt: app~llcuH. Cnder the surety
bund the appellant bound htT . ..;cJr u1.u :Vf "shall pro<L1ce and
plal:c at the <lispos:tl of the couo t, u·hen rt:7uitrtl'·, th~ bilis or
the Yaluc of the sa111e and 1:it1 d"-fault of bis so doingi 1 tu p;\y
a s11111 r;f Rs 12,000 tu the <:ourt.
After the p.\ssing of the
decree, ·r, v.•ithout
takin~ •u1y steps agaiust \{, applied for
excri:~ion of the decree by
e~1for<.:cn1cnt of the s11rcty bonds.
The sureties tiled ''hje<:tiuns.
111
1lll~ r11ca11ti!n~, ~f appli~d to
the })ehra<lun ·rribunal uudcr ~ . .5 of t!1e J)ispl<tced Persons
(l)cbt :\<lj11st111cnt) Act: 195 I 1 for adjtl'Hn1ent of l:is debts and
the appcll<1.nt applir.d. H) the executing Court under s. 15 of the
Act for staying the procccdiiu;s.
The
C~><trt rcf~1sc..J t1> stay
J1olding that the l)chradnn ·rriG1111.il had no jurisdiction to
entertain the application ,u1J
reje<:tt~d the objrction-; to the
enfo;ccn1e11t of the surety bonds.
Subsequently, r:1c Tribunal
.-.!so held that it had no rerritorLil.iurislJiction to c1lttrtain the
applicnion a11d returnr.d the s;i1ne fur presentation to the pro·
per ·rrib11na 1.
~{
p··~fcrrcJ ;in appeal ag;iinst
thi<:
()rdr.r.
'fhe appr.lla11t conte11deJ that the executing Cnul't w,t~ b'.)\l!ld
to st;1y thr. execution proccc<li111_~s ;l.nd th<lt the surt'lY bond was
111,t l"t1forceilhlc as ihr: co:iclitinns 11cc<"ssl1)' tor its enfqrr:cnlf~llt
h:1<l not 1Jee11 fulfilled.
/Jeld, that the cxecutin~ C:ourt \\'as right iri rr·fu-;in~ t0
stav the proceedings.
L·nder 5. 13 of the .~ct, :di procr:e<ling!\
p~~~dio~ in a C:i\:il C~urt li:l\"C to be st;~y.e~ provided tv.·o c~n.
d1t1uns are ~atlsh<'<l, 1. c. fi) tl'at the l fl!Jt111al l:cf11rc \\"illc:t1
the application under s. 5 i'i filed has territorial _jllrisdic:tiou tr)
-
..
-
28.C.R.
SUPREME COURT REPORTS
153
entertain it and (ii) that the proceedings are in respect
of a debt owed by the dfaplaced person. The Tribunal had
returned the application for want of territorial jurisdiction
and •he mere filing- of the appeal did not suspend the order
of the Tribunal. The effect was that there was no application
under s. 5 pending.
Jascurn Bo1:d v. Pirthichand Lal, (1918) L. R. 46 I. A.
52, referred Iv.
Held, further, that the surety bond was not enforceable.
A surety bond had to be strictly c0nstrued; it was permissible
to
look at t]\e surrounding circumstances only when the
language used was ambigucus.
In the present case the language was clear. A strict construction of the bond led to the
only conclusion that a demand by the Court to M to produce
the bills or their value and a default made by him were
necessary conditions for th.: enforcement of the bond against
the surety. These conditions were not fulfilled.
Raghunandan v. Kirtyanand
A. I. R. 1932 P. C. 131,
The State of Bihar v. M. Homi. [1955] 2 S. C.R. 78 and The
State of Uttar Pradesh v. Mohammad Syeed, (1957] S.C.R. 770,
referred to.
C1vrL APPELI,ATE JumsDICTION : Civil Appeal
No. 72 of 1961.
'Appeal by special leave from the judgment
and order dated
March 12, l!J57, of the Madhya
Pradesh High Court in Letters Patent No. 212 of
195().
G. G. Mathur, for the appellant.
H. N. Sanyal, Additional Solici:tor-General of
Inrlia and S 8. Shukla, for respondent No. 1.
1963. February 21.
The Judgment of the
Court was delivered by
SURRA RAO .J .-This appeal by sp

## Text

'
lii2
~ · '
..
"0 -L·
SUPREME COURT REPORTS [1964] VOL.
S.MT. KAMALA DEVI
'(,'.
SETH TAKHAT:.IAL AND A~OTHER
(K. SUBBA RAO, ICHrnt;BAll DAYAL anJ
.J. R. :.11wHOLKAR .J.J.)
,)'urr:ly }~rnvl-C'nn'!-lructlnn of-Corviitions for RnforcemP-nt
-If Ju((t!lr:tl-[Ji'lpluccrl 1{1./,fur ·-Appiicr1tion for rtt[j11_qfn1r11t. of
dcbl-'l-[li::tu1n
for uxvit of fr:rr1!1Jrit'l[ j11risdictio11---Appr.1Jl-
()i1:li (}ourL if 1r111.i;t sf11y
r:.1:< r1111:rui prnrr."d;·ngs-{:/11lP of Ci1:il
J»roc~rl11re. l.'iOS (.
1!r.t V of /!lfJ\), A. 145--!Ji.'lpiar.ul J;r.r.<uJ11s
(/ichts Adj1o'lme11t) Act, ]!J.)/ (LXX of JYcj/), "'·ii, 15.
·r filed a
suit against .\1 and oUtaincd a:1 t.>rder for
attarfnnr.nt b<":forc judg1ncr.r of certain bills due for p.1yrnent
to
~L 1'hc biils \\'Crc rclc.l'iCJ fro:n attacluncnt upon
~f
fun,ishing surctit~s i11clu<lin~ tilt: app~llcuH. Cnder the surety
bund the appellant bound htT . ..;cJr u1.u :Vf "shall pro<L1ce and
plal:c at the <lispos:tl of the couo t, u·hen rt:7uitrtl'·, th~ bilis or
the Yaluc of the sa111e and 1:it1 d"-fault of bis so doingi 1 tu p;\y
a s11111 r;f Rs 12,000 tu the <:ourt.
After the p.\ssing of the
decree, ·r, v.•ithout
takin~ •u1y steps agaiust \{, applied for
excri:~ion of the decree by
e~1for<.:cn1cnt of the s11rcty bonds.
The sureties tiled ''hje<:tiuns.
111
1lll~ r11ca11ti!n~, ~f appli~d to
the })ehra<lun ·rribunal uudcr ~ . .5 of t!1e J)ispl<tced Persons
(l)cbt :\<lj11st111cnt) Act: 195 I 1 for adjtl'Hn1ent of l:is debts and
the appcll<1.nt applir.d. H) the executing Court under s. 15 of the
Act for staying the procccdiiu;s.
The
C~><trt rcf~1sc..J t1> stay
J1olding that the l)chradnn ·rriG1111.il had no jurisdiction to
entertain the application ,u1J
reje<:tt~d the objrction-; to the
enfo;ccn1e11t of the surety bonds.
Subsequently, r:1c Tribunal
.-.!so held that it had no rerritorLil.iurislJiction to c1lttrtain the
applicnion a11d returnr.d the s;i1ne fur presentation to the pro·
per ·rrib11na 1.
~{
p··~fcrrcJ ;in appeal ag;iinst
thi<:
()rdr.r.
'fhe appr.lla11t conte11deJ that the executing Cnul't w,t~ b'.)\l!ld
to st;1y thr. execution proccc<li111_~s ;l.nd th<lt the surt'lY bond was
111,t l"t1forceilhlc as ihr: co:iclitinns 11cc<"ssl1)' tor its enfqrr:cnlf~llt
h:1<l not 1Jee11 fulfilled.
/Jeld, that the cxecutin~ C:ourt \\'as right iri rr·fu-;in~ t0
stav the proceedings.
L·nder 5. 13 of the .~ct, :di procr:e<ling!\
p~~~dio~ in a C:i\:il C~urt li:l\"C to be st;~y.e~ provided tv.·o c~n.
d1t1uns are ~atlsh<'<l, 1. c. fi) tl'at the l fl!Jt111al l:cf11rc \\"illc:t1
the application under s. 5 i'i filed has territorial _jllrisdic:tiou tr)
-
..
-
28.C.R.
SUPREME COURT REPORTS
153
entertain it and (ii) that the proceedings are in respect
of a debt owed by the dfaplaced person. The Tribunal had
returned the application for want of territorial jurisdiction
and •he mere filing- of the appeal did not suspend the order
of the Tribunal. The effect was that there was no application
under s. 5 pending.
Jascurn Bo1:d v. Pirthichand Lal, (1918) L. R. 46 I. A.
52, referred Iv.
Held, further, that the surety bond was not enforceable.
A surety bond had to be strictly c0nstrued; it was permissible
to
look at t]\e surrounding circumstances only when the
language used was ambigucus.
In the present case the language was clear. A strict construction of the bond led to the
only conclusion that a demand by the Court to M to produce
the bills or their value and a default made by him were
necessary conditions for th.: enforcement of the bond against
the surety. These conditions were not fulfilled.
Raghunandan v. Kirtyanand
A. I. R. 1932 P. C. 131,
The State of Bihar v. M. Homi. [1955] 2 S. C.R. 78 and The
State of Uttar Pradesh v. Mohammad Syeed, (1957] S.C.R. 770,
referred to.
C1vrL APPELI,ATE JumsDICTION : Civil Appeal
No. 72 of 1961.
'Appeal by special leave from the judgment
and order dated
March 12, l!J57, of the Madhya
Pradesh High Court in Letters Patent No. 212 of
195().
G. G. Mathur, for the appellant.
H. N. Sanyal, Additional Solici:tor-General of
Inrlia and S 8. Shukla, for respondent No. 1.
1963. February 21.
The Judgment of the
Court was delivered by
SURRA RAO .J .-This appeal by special leave
raises, inter alin, the question of construction of the
terms of a surety bond.
The
August 26,
materi~l
facts are
DS
J!J47, Seth Takhatmal,
follows : On
respondent 1,
1963
'Kamala Dev
v
Takhllm•I
~ilbba llao J,
l'JliY
Kamola Dtvi
v.
Tal.!11Jtm1l
•:iubha Rao J.
...... _ ...
..... ..,,... .... ., ........ _,.,
·- ............. .
154 SUPREME COURT REPORTS[l964) VOL.
filed Civil Suit No. 9-A of 194.7 in the Court of the
First Additional District Judge, Jabalpur, against
Mu lkraj Malhotra, the second respondent, for dis.50ll'tion of their partnership and rendition of accouitts.
On i\ugust 27, 190, the first respondent applied for
attachment brfore judgment of all the bills payable
to "M. R. Malhotra and Company", as per description given in Schedule A attached thereto and for
the issue of an order to C.M.A.S.C., Poona, prohibiting
them
from
issuing
any
cheque due to
:VI. R. 1\falhotra and Company, and on the same day
the Court issued notice of the said application.
On
August 28, 19cVi, the Court issued a conditional order
of attachment before judgment in respect of the said
bills.
On September !J, 1947, the second respon<~ nt
applied for vacating the order of attachment.
On
September 11, Hl47, the second respondent offered to
give security if time was granted to him.
On
October J'i, 1947, :i suretv bonds were executed bv
the appellant and 4 others. for diffarm "mounts and
presented to the Court. The Crrnrt
~<:cepted the
bonds and withdrew the order of a1tachrncnt.
The
appellant's surety bond to the Court was for a sum of
Rs. 12,000/-. Under that bond she agreed, ff the
second respondent made a default in producing and
placing at the disposal of the Court when required
the properties specified in the SchcrJ11le attached
thereto or the value of the same or such portion of
the same a~ may be sufficient to satisfy the decrre, to
pay to the Court a sum not exceeding Rs. 12,000/-.
On October 13, l!l48, a
preliminary decree was
made in the said suit.
On August I, 19.'ll, the
second responrlent was arljudged as an insol wnt by
the High Court at Calcutta. On September 20, I !JG!,
a final decree was passerl in the said suit against the
second re~pondent for a snm of Rs. I, i4,!l06/4i0 plus
Rs. i868/10/0 as costs.
On October 19, 19iil, the
first respondent filed an application for execulion of
the df'cree bv enforcement of the suretv bonds under
~.
J~,; or' the
Code of Civil Procedure.
Ori
,c;
-
--
-
2 S.C.R.
SUPREME COURT REPORTS
155
December 7, 1951, the appellant filed objections
raising various pleas, inter alia, contending that the
decree was passed without jurisdiction and that the
surety bond was void.
On May 28, 1952, the second
respondent filed an application under s. 5 of the
Displaced Persons (Debts
Adjustment) Act, 1951
(LXX of 1951), hereinafter called the Act, before
the Tribunal at Dehra Dun for adjustment of his
debts under the provisions of the Act.
On July 9,
1952, the adjudication of the second respondent as
an insolvent was annulled.
On August 2, 1952, the
appellant filed an application. before the District
Court under s. 15 of the Act for stay of the execution
proceedings and for the transfer of all the records to
the Tribunal at Dehra Dun. On August 20, 1956,
the Tribunal at Dehra Dun, holding that it had no
territorial jurisdiction to entertain the application
filed by the second respondent under the Act,
returned it for presentation to a proper tribunal.
On August 22, 1952, the executing Court rejected
all the contentions of the appellant.
On August 29,
1956, the second respondent preferred an appeal
against the order of the Tribunal at Dehra Dun
returning his application filed under s. 5 of the Act.
It is represented to us by the learned counsel for the
re1pondent on imtructions that the said appeal was
dismi1sed.
The appellant preferred Miscellaneous
First Appeal No. 44 of 1952 against the order of the
executing Court rejecting her objections to the High
Court of Judicature at Nagpur.
That Court, by its
order dated October 1, l 95ti, dismissed the appeal.
The Letters Patent Appeal No. 212of1956 preferred
by the appellant against the order of the single
Judge of the High Court was also dismissed by a
Division Bench of that Court on March 12, 1957.
The present appeal has been preferred by the appellant by special leave.
Mr. Mathur. learned counsel for the appellant
raised
befure us
the following points : (1) The
1963
Kamala De.vi
v.
Takhatmal
Subba Rao J,-.
1963
l\'21'Ula fltt:i
v.
Takhatmal
.....
~·
...... -=·
~
156 SUPREME COURT REPORTS [1964) VOL.
executing Court acted without jurisdiction in refusing to stay the execution proceedings against the
appellant contrary to the express provisions of s. 15
of the Act.
And (2) a surety bond has to be strictly
construed and if so construed it would be obvious on
the express terms of the bond that the necessary
conditions for its enforceability were not fulfilled.
\Ve shall notice the arguments of the learned
Additional Solicitor-General on behalf of the first
..,
respondent at proper places in the course of our
judgment.
The first question
turns upon the relevant
provisions of the Act and they read :
Section 5. (1) At any time within one year
after the date on which this :\ct comes intn
force in any local area. a displ<1ced debtor may
make an application for the adjustment of his
debts to the Tribunal within the loc;d limits of
whose jurisdiction he actually and vol11nrarily
resides,
or carries on business or personally
works for gain.
Section 16. Where a displaced
debtor has
made an application to the Tribun:tl under
section 5 or under su b-seetion (2) of section 11,
the
following
consequences
shall
ensue,
namely :-·-
(a)
all proceedings pending at the date
of the said application in any civil
court in respect of any debt to which
the displaced debtor is subject (except
proceerlings
by
way of appeal or
review or revision against decrees or
orders passed against the displaced
debtor) shall he staved,
and
the
records of all such p
0rocerdings other
than those relating to the appeals,
-
-
•
2 s.c.R. sUPRE:ME COURT RBi>ORTS
•
review, or revisions as aforesaid shall
be transferred to the Tribunal and
consolidated.
Under the
said provisions if a displaced debtor
filed an application before a Tribunal described
under s. 5 of the
Act,
all proceedings pending
in a civil
Court
at the date
of the
said
application in respect of any debt to which the displaced debtor is subject shall be stayed. The statutory
stay can be invoked only if two conditions are satisfied,
namely, (i) the Tribunal before which the application under s. 5 is filed shall be one within the local
limits of whose jurisdiction the displaced debtor
actually and voluntarily resides or carries on business
or personally works for gain, that is to say the
Tribunal shall be one which has territorial jurisdiction to entertain the application ; and (ii) the proceedings shall be in respect of a debt owed by the
said displaced person.
From the earlier narration of
facts it is manifest that the Debra Dun Tribunal held
that it had no territorial jurisdiction to entertain the
petition and returned it to be
represented to a
proper tribunal. The application so returned was
not re-presented to the proper tribunal.
The appeal
filed against the said order was dismissed.
As there
was no application pending before any Tribunal,
the Court was well within its rights in not acting
under s. 15 of the Act.
Learned counsel for the appellant contended
that he had no instructions that the appeal filed in
the Allahabad High Court was dismissed.
Assuming
that the appeal is still pending against the order
made by the Tribunal, Dehra Dun, returning the
petition filed by the second respondent under s. 5
of the Act, the appellant would not be in a better
position.
It is not stated that after filing an appeal
his client had obtained any interim suspension of
the order of the Tribunal ; indeed, it is not disputed
1963
Kamala D.vi
••
Takhatmal
SuhbtJ Raa J,
1963
11-amala Dt••i
v.
1nkhalmal
Subba Jiao J.
,... - -·
.... ~ .. ~ ....
'
. .,.. '
158
Sl.JJ>RE~E COURT REPORTS(1964] \rot.
that there was no such order. If so, the legal position
would be that the order of the Tribunal would be in
forr~ till it w~• mo<lified or set aside hy the appcllat~ Court. The fi!ing of an appeal due; not au10rnatically suspend the operation of an order appealed
from unless the appellate Court stays it or a statute
conferring a right of appeal provides for such a
stay. Section 40 of the Act confers
a right of
appeal on an aggrieved party against the final order
of a
Tribunal to the High Court. The section
conferring the said power does not provide for a
statutory stay of the order of the Tribunal till the
disposal of the appeal. Indee<l, Order XLI, r. ii,
of the Code of Civil Procedure, which embodies the
general principle of law says that an appeal shall
not operate as a stay of proceedings unde1 a decree
or order appealed from except so far the appellate
Court may order.
This principle which applies to
stay of proceedings under an order will apply with
greater force to a suspension of an order. The
Judicial Committee, in Jw;curn lioid v. Pirthicluind
Lal ('), summarized the Indian Law of procedure •
thus :
" ......... under the Indian Law and procedure
an original decree is not suspended by presentation of an appeal nor is its operation interrupted where the decree on appeal is one of
dismissal."
Here, the application filed by the second r_espondent
before the Tribunal, Dehra Dun, was re3ccted and
the said order holds the field till it is reversed by the
appellate Court.
As the order of the Tribunal was
not suspended, the effect was that there was no
application pending ·in a Tribuna 1. as defined !n s. fi
of the Act. The order of the High Court. m our
view, is correct on this point.
The second question turns upon the interpretation of the surety bond executed by the appellant
(I) (1918) L. R. 461. A. 52, 56.
-
-
2 s.tt.R..
SUPREME COURT REPORTS
i5~
in favour of the Court. As the argument turns
upon the terms of the said bond, it will be convenient
at the outset to read the material part of it. It
reads :
"Whereas at the instance of Takhatmal,
the plaintiff in the above suit ; Mr. M ulkraj
the defendant has been directed by the Court
to furnish security in the sum of Rs. 1,00,000/-
( one lac only) to produce and place at the disposal of the Court the property specified in the
schedule hereunto annexed ;
Therefore, I Kamla Devi have voluntarily
become surety and do hereby bind myself, my
heirs and e x:ecu tors, to the said Court, that
the said defendant shall produce and place at
the disposal of the Court, when required, the
property specified in the said schedule or the
value of the same, or such portion thereof as
may be sufficient to satisfy the said decree; and
in default of his so doing, I bind myself, my
heirs, and executors, to pay to the said Court,
at its order, the said sum of Rs. 12,000/- only
or such sum not exceeding the said sum
as the Court may adjudge."
Schedule 'A'
x
x
x
x
x
x
x
(ii items)
Approximate grand total. .. Rs. 1,10,000/-
Learned counsel for the appellant contended that
the surety
bond must be strictly. construed, that
under the terms of the surety bond the liability of
the surety arises only if the principal debtor is required to produce and place at the disposal of the Court
the said bills or the value of the same and if he
1963
Kamala
D~r;_i
v.
Takhatmal
Subba Rao J~
1963
Kam•fa 8tci
••
T <lklro<mal
Subba Ua'J J.
160
st..ri>kt:ME COURT REPORTS [1904] Vot.
makes a default in doing so, and that in the present
case it has not been established, and indeed it is not
the case of the respondent, that any such demand
was made on the second respondent and that he
made a dcL1ult in doing so.
Learned Additional
Sohcitor-Generai for the first respondent argued that
the said plea was not taken by the appellant and
that she should not be allowed to raise it at this
stage, for, if it was raised, in 1he pleadings his client
might have been in a position to allege and prove that
the said condition had been fulfilled or at anv rate
waived by the appellant. He further contended that
on a fair reading of the terms of the surety bond,
having regard to the circumstances under which it
was executed, it would be manifC'st that the appellant had accepted the liability to satisfy the decree
debt if the second respondent failed to do so, upto a
sum of Rs. 12,000/-.
He would say that, as the
surety bond was executed for raising the attachment,
the amount for which it was given was clearly intended by the party to be paid towards the decree
amount in case the judgment·debror made a default
to place at the disposal of the Court the said bills or
their value and that in the said circumstances a reasonable interpretation of the term~ of the bond without
doing violence to the language would disclose the
said intention. It is true that the plea now raised was
not specifically taken in the objections filed by tile
appellant and it was not specifically advanced before
the learned District Judge also.
It was rejected by
Kotval J. on the ground that it was not raised in
the pleadings, and by the Division Bench on merits.
But the question raised is one of construction of a
surety bond and all the facts on which the respondent
seeks to rely upon should only be found in the order
sheet.
If a demand was made or if the judgmentdcbtor or the suretv waived the fulfilment of a condition, the order sheet must disclose the issue of a notice
or the facts constituting a waiver.
There cannot
possibly be any facts outside the record.
The entir
-"i>
2 s.c.k.
SUPREME cotJRT REPORTS
order sheet is on the file.
The learned counsel is not
able to show any entry therein which will support
the fact of a demand or a waiver.
Ju the circumstances, even if we remand the case, no useful purpose will be served for the necessary facts could only
be gathered from the order sheet.
That apart, before
the Division Bench of the High Court the first respondent does not appear to have contended that he had
sources other than the order sheet to prove that either
a demand was made or the surety waived the fulfilment of the condition, and indeed his Advocate
appears to have contended that in view of the subsequent events that happened such a demand would
only be an idle formality. In the circumstances, we .
are satisfied that the respondent would not be
pr~judiced if the appellant was allowed to argue
on the construction of'thc surety bond, as she .did in
the courts below.
Now coming to the construction of the surety
bond, the first question raised by the learned Additional Solicitor-General is
that the terms of the
surety bond should be construed in the context of the
surrounding circumstances, namely, the circumstances
under which the surety bond came to be executed.
In support of this contention he relied upon the ·
judgment of the Judicial Committee in Raghunandan
v. Kirtyanand (1).
There, the Judicial Committee
was asked to construe a surety bond.
The question
raised was whether under the terms of the bond the
liability undertaken by the surety was to pay the
entire decree amount or to pay the balance of the
amount due under the decree after the mortgage
security was reafoied, up to the limit of the amount
guaranteed under the bond.
The terms
of the
document were not clear and unambiguous.
In
those circumstances, Lord Tomlin, speaking for the
Board, observed :
"The bond must be considered in the light of
the order directing the security to be given.
(!) A.I.R. 1932 P,C. 131, 132·331
1963
Ji Oma la Devi
v.
Takhatma/
Subba Rao J,
·- ··- -
.., -· . . ,,
~ .... '
. ...._
·~···-..i.- - ..........
162
SUPREME coi.Jki REl'ORis [l9!i4] \roL.
1963
............................. .In those circumstances
Kamoia Dni
what is the meaning of the language employed
•·
in the bond~"'
TokUlmal
SuHo Roo J.
These observations only apply the well settled rule of
construction of documents to a surety/bond.
Sections 94 to 98 of the Indian Evidence Act afford
guidance in the construction of documents; they also
indicate v.hen and under what circumstances extri·
mic-evidencc could be relied upon in construing the
-
terms of a document.
Section 94 of the Evidence
Act lays down a rule of interpretation of the language of a document when it is plain and applies
accurately to existing facts.
It says that c videncc
may be given to show thar it was not meant to apply
to such facts.
When a court is asked to interpret a
document, it looks at its language. If the language
is clear and unambiguous and applies accurately to
existing facts, it shall accept the ordinary meaning,
for the duty of the Court is not to delve deep into
the intricacies of the human mind to ascertain one's
undisclosed intention, but only to take the meaning of
the words used by him, that is to say his expressed
intentions. Sometimes when it is said that a Court
· should look into all the circumstances to find an
author's intention, it is only for the purpose of find-
-
ing out whether the words
apply accurately to
existing facts.
But if the words are clear in the
context of the surroundin~ circumstances, the Court
cannot rely on them to attribute to the author an
intention contrary to the plain meaning of the words
used in the document.
The other sections in the
said group of sections deal with ambiguities, peculia·
rities in expression and the inconsistencies between
the written words and the existing facts. In the instant
case, no such ambiguity or inconsistency exists as we
shall demonstrate presently.
The Privy Council"s
case was one of ambiguity and the surrounding
circumstances gave the clue to find out the real intention of the parties as expressed by them.
-
-
2 s.c.R.
SUPREMt<: couR.t REPOR.ts
16a
Bearing the said principles in mind, let us look
at the document closely.
The preamble to the surety
bond in clear terms gives the object of the bond.
It says that "the defendant has been directed by
the Court to
furnish security in the
sum of
Rs. 1,00,000/- to produce
and place at the disposal of the Court the property specified · in the
Schedule hereunto annexed". Therefore, the object
is to see that the said direction is properly carried out,
and to provide for a contingency if a default is made
by the judgment-debtor in complying with the said
direction. The second paragraph of the bond binds
the surety to Court in that the said defendant shall
produce and place at the disposal of the Court, when
required, the said property or the value of the same.
The words used in this part of the undertaking
given by the surety is clear anrl unambiguous. The
judgment-debtor shall produ'Ce
the bills or their
value and place them at the dis1)osal of the Court
when required to do so.
The expression "when required" can only mean
"when required by the
Court". The obligation undertaken by the surety
is that the judgment-debtor shail produce the said
property when required by the Court. Her obligation does not arise at all till the Court makes the
requisition. In this case there is no order or entry
in the order sheet requiring the judgment-debtor to
produce and place the property in Court; nor even
the execution petition though it describes the
judgment-debtor. in one of the columns, asks for any
relief against him. But it is said that the words
"when required" must be confined only to a situation when the biils could be produced or the value
of the same could be paid by the judgment-debtor;
and that in this case, as the bills were cashed and the
money misappropriated by him and as he had been
adjudged an insolvent, it would be an empty formality to call upon him to do so. It is also said
that the condition could apply only when the money
could lawfully be paid by the judgment·debtor; but,
196$
Kamala Dtvi
v.
I akhalmal
Suhba Rao J.
/'J{J3
f.:1Jma.'a Otd
v.
Talcholmal
Subba Rao, J.
I
1G4 SUPREME COURT REPORTS [l!l!H] VOL.
as the judgment-debtor had become an
insolvent,
neither the Court could demand of him to pay the
cunount, nor could he pay it.
The construction of
tlic word "when required" suggested by the learned
counsel for the respondent, if accepted, would make
those wonls unnecessary : it would mean that the
judgment-debtor should be required to produce the
property only if he could
do so and need not be
rcquirc<l to produce it if he could not do so; in such
a case those words could as well be excluded from
the sentence, for they would not serve any purpose.
If the words were retained there to accept the argument of the learned counsel, they should be qualified
by adding "if the bills could be produced and when
the money could lawfully be paid by the judgmcntdebtor".
But those words
are
not there and we
cannot add them, for without adding them, full
meaning could be given to the words used in the
clause.
But whatever ambiguity there may be-in
o.ir view there is none ·the words "in default of his
doing so" make it absolutely clear that the surety
binds herself only if the judgment-debtor makes a
default when he is required to produce the document.
The intention of the parties is very clear.
The
surety undertook that the judgm~nt-debtor would
produce the bills if required by the Court and that
if he made a default, she would be bound to pay the
decree amount up to a particular limit.
A court
cannot possibly decide beforehand
that the judgment-debtor would not produce the bills vi" at any
rate the value of the same if demanded; for ought
we know he might have paid that amoul't from other
sources or he would have taken out an application
to the Official Receiver to do so, or on the events
that subsequently happened,
,:. e., on the annulment of the adjudication, he could have paid that
amount. It is well settled that a surety bond has
to be strictly constmed. In The State of Biluu v.
Jf. Ho mi ('), this Court ruled that provisions in a
surety bond which are penal in nature must be very
ti) [195~12 S. 0, R, 76.
•
2 S.C.R.
SUPREME COURT REPORTS
165
strictly cumtrued. This Court again in 1'he State of
Uttar Pmde.sh v. Maham.med 8ayeed (1), applied the
strict rule of comtruction of a surety bond in that
case.
In the present case a strict construction
of
the bond leads to the only conclusion
that a
demand of the Court on the judgment· debtor and a
default made by him were necessary conditions for
the enforcement of the bond against the appellant.
In the result, we set aside the order of the High
Court and dismiss
the application for execution
filed by the first
n~spondent against the appellant.
But we do not think that this is fit case for awarding costs to the appellant. She has failed to raise
this objection specifically in her objections or to
place before the
learned District Judge the present
con tent ion.
In the circumstances we direct each
party to bear his or her own costs throughout.
MEE:'olGL\S TEA ESTATE
v.
ITS WORKMEN
(P. B. GA.JENDRAGADKAR, M. HIDAYATULJ,AH
and J.C. SHAH JJ.)
lnd11strla!
T>iBpufe-Requireme-nts of vrdifl inquiry-
/lri'.ncip/f'.~ nf natuta! jtt~lice-Practice, of Suprerne ('nurt nnt
In Pnfr r irifu fridenre to .find facts for itsefj-(1ase of no f.vid1,nrr.
In Jan:,ary, I ()j6, there was an incident in which a group
of workrnen assaulted the Manager and tv,;o Assistant Managers
of the appellant company.
All the three offi,·ers were wounded. Sornr: w• 1rk1nr.n IA'< re suspended, :ind cbargt'·Sheets wen>:
served on them,
c!'iar~ii,g them with participation in the riot.
After an inquiry the VIOrkmen wert" disrnissed. 'rhe inquiry
was hr.ld liy the M;1nager and one of the 1\ssistant Managers.
During the inquiry, no witness was
~xarnine<l and no stat(' ..
ment marle by any witnt ss was tendered in evidence.
(IJ (1957] S. C.R. 770.
1963
Kam ala nvJi
v.
Takhatmal
S"hba Rao }.
1963
I .bruarY 22,