Vinod S/O Chhaganal Daga vs Shriram Chits Pvt. Ltd. Nagpur ...
2017 Latest Caselaw 3079 Bom

             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                               NAGPUR BENCH : NAGPUR

               CIVIL REVISION APPLICATION NO. 97 OF 2016

                  Vinod s/o Chhaganlal Daga,
                  Aged about 64 Years,
                  R/o Opposite CTO, Temple Road,
                  Civil Lines, Nagpur.
                                                         Original Def./J.Dr. No.3)
                                             .....                  APPLICANT

                                      .. VERSUS ..

        1.        Shriram Chits Pvt. Ltd., through, 
                  Mr. Deepak Nandlal Pendam, 
                  Office at-Sanganak Bhavan, 
                  North Bazar Road, Dharampeth Extension, 
                  Gokulpeth, Nagpur.             (Ori. Plff/D.Hr.)

        2.        Ravindrasingh Satpuransing,
                  Aged about 64 Major, R/o Plot No. 20, 
                  Shastri Layout, Nagpur.       (Ori. Def/J.Dr.No.2)

        3.        New India Assurance Company Ltd.,
                  Through Divisional Officer, Nagpur Division,
                  Wardha Road, Sitabuldi, Nagpur.
                                                 (Ori. Def./J.Dr.4)

        4.        Pulakkumar Rishibhushan Sur (Dead)
                                        (Ori. Def./J.Dr. No.1)
                                                        NON-APPLICANTS/
                                          ...           RESPONDENT

        Shri   Shraddhanand   V.   Bhutada,   Yash   Maheshwari,   and   Ms.
        Vinita V. Tiwari, Advocates for Applicant
        Shri Rajesh V. Shah for Respondent no.1
        Shri Anish Khadatkar for Respondent No.2


              CORAM :  DR. SMT. SHALINI PHANSALKAR-JOSHI, J.

DATED : JUNE 13TH, 2017.

ORAL JUDGMENT

1. The legality, propriety and validity of the order passed by

the 9th Joint Civil Judge, Junior Division, Nagpur on 3 rd September

2016 below application at Exhibit-12, in execution proceedings

bearing R.D. no. 97/2013, is challenged in this revision. The

impugned order was passed on the application filed by the judgment

debtor no.3 i.e. original defendant no.3 in R.C.S. No. 1440/2001, for

dismissal of the execution proceedings against him. Learned

Executing Court rejected the said application and hence being

aggrieved thereby, he has approached this court, invoking its

revisional jurisdiction.

2. The legal issue involved in this revision application is

whether a suit, initiated as a composite suit against the borrower and

sureties, can be proceeded with and can the liability be fastened on

the sureties alone, when the suit stands abated against the original

borrower / principal debtor ?

Facts, which are relevant, for deciding this issue can be

stated as follows:

3. On 24/05/2001, Regular Civil Suit No. 1440/2001 was

filed by respondent No.1 - the decree holder against the defendant

no.1 - principal debtor and against defendant no.2 and 3 who were

the sureties of defendant no.1, for recovery of the amount of the Chit

Fund. In the said suit, though the defendant no.2 and 3 had

appeared, they were proceeded without written statement.

4. In the course of the proceedings of the suit, it was

pointed out to the court that defendant no.1 had died on 19.12.1999

itself. Purshis exhibit-12 was filed by the plaintiff stating that as

defendant no.1 was unmarried, his name be deleted from the suit and

order to that effect accordingly came to be passed. However, on the

application of plaintiff, respondent No.3 herein the New India

Assurance Company came to be joined as defendant No.4 on the

count that defendant No.1 was working in the said company and

hence the amount recoverable from Defendant No.1 be recovered

from his service benefits and dues to be payable by New India

Assurance Company. Defendant no.4 resisted the suit, contending

inter-alia that it is not in any way concerned with the personal loan

transaction of deceased Defendant No.1 and the salary and terminal

benefits or even the pension and gratuity of the deceased cannot be

liable for attachment. It was specifically contended that Defendant

No.4 cannot be held liable in any way for payment of the amount and

suit be dismissed against it.

5. On the basis of these pleadings, the trial court framed the

necessary issues and one of the issue was, "whether plaintiff proved

that defendant no.1 was having no legal heirs at the time of his death

on 19.12.1999?". The Trial Court answered the said issue in the

affirmative, holding that the defendant no.1, as per the pursis filed on

the record by the plaintiff at Exh. 12, has died unmarried leaving

behind no legal heirs. The trial Court therefore held that as the name

of the defendant no.1 is deleted and the suit is abated against him,

the decree can be passed against the defendant no. 2 to 4 alone.

Accordingly, the trial Court, vide the judgment and order dated 2 nd

January 2012 decreed the suit and directed the defendant no. 2 to 4

to pay the Chit Fund installments amounting of Rs. 71,500/- to the

plaintiff company jointly and severally, alongwith the interest thereon

from the date of filing of suit till its realisation.

6. When this decree was put for execution, the original

defendant no. 3, who was a judgment debtor in the execution

proceeding, raised objection to the execution of the decree itself on

the ground that the decree is void and unexecutable. It was

contended that defendant no.1 - the principal debtor had died before

filing of the suit itself. It was submitted that though plaintiff had

contended that defendant no.1 had died without leaving any legal

heirs behind, the application filed by the plaintiff at Exhibit-15 and

the Written statement filed by defendant no.4 clearly showed that

defendant no.1 had died leaving behind some legal heirs to represent

his case. It was further submitted that plaintiff had not made any

efforts to bring the legal heirs of defendant no.1 on record and hence

the suit was abated against the defendant no.1. If the suit was joint

and composite against defendant no.1, who was the principal debtor,

and defendant no. 2 and 3, who were the sureties, the suit had to be

abated, as a whole, against all the 3 defendants so that there can be

no conflicting decisions in the same litigation arising out of the same

cause of action, with respect to the same subject matter.

7. It was further submitted that on account of failure on the

part of plaintiff to bring the legal heirs of defendant no.1 on the

record, the remedy available to the sureties under the Indian Contract

Act is also lost. In this respect reliance was placed on the decision of

Syndicate Bank V/s Pamidi Somaiah (died) and another reported

at AIR 2002 ANDHRA PRADESH 12 to submit that, once the suit is

abated against principal debtor, it is equally abated/dismissed against

the sureties also. Thus, it was contended that the impugned decree

passed against the sureties is illegal and unenforceable against them.

8. This application came to be resisted by the Decree-

holder-plaintiff by contending that in the execution proceedings this

issue can not be raised, as already it was considered by the court in

the suit. It was submitted that this specific issue was dealt with by the

Trial Court decreeing the suit against the defendant no. 2 to 4 and

the said issue was "whether the plaintiff proves that the defendant

no.1 was having no legal heirs at the time of his death

i.e.19/12/1999?". That issue was answered in affirmative. Hence the

remedy, if any, available to defendant no. 2 and 3 was to challenge

the finding on that issue, by preferring an appeal. However, none of

the defendants had preferred any appeal against the said judgment.

Hence it has become final. In such situation, same issue cannot be

agitated in the execution proceeding again. It was submitted that, as

per settled position of law, the executing court cannot go behind the

decree, when the said decree has become final and it is legal and

executable.

9. The Executing Court, after duly considering submissions

advanced by the learned counsel for both the parties, was pleased to

accept the submissions made by the learned counsel for the plaintiff

that, as defendant No.1 had died unmarried, there were no legal heirs

left behind by him and in such situation, when judicial finding to that

effect is arrived at in the suit and that finding has become final, it

cannot be agigated again in the execution proceeding as the

executing court cannot go behind the decree. The learned Executing

Court also held that under the contract of guarantee, the liability of

surety is co-extensive to that of the principal debtor, and as the said

liability is also joint and several, the decree passed against the

defendant no.2 and 3 cannot be called as illegal and unexecutable.

The learned Trial Court accordingly dismissed the application

preferred by the defendant no.3 for dismissal of execution proceeding

against him.

10. While challenging this order passed by the learned

executing court, the submission of the learned counsel for the

applicant - defendant no.3 is that once the suit is abated against the

principal debtor, then as the suit as filed was a joint and composite

claim, it should abate against the sureties also. To substantiate this

submission, learned counsel for the applicant has relied firstly upon

the aforesaid decision of the Andhra Pradesh High Court, which is

also referred by the Executing Court in its impugned order.

11. In my considered opinion, if the facts of the above said

decision of the Andhra Pradesh High Court are perused they do

appear to be identical to the facts of the present case. In the said case

also, the suit was abated against the original borrower and the decree

came to be passed only against the surety. It was challenged in

execution proceeding on the ground that it is void, illegal and

unexecutable. The executing court framed the issue, "whether the

decree obtained against surety is executable or not?" and then relying

upon the judgment of the same High Court in the case of Royal

Finance Corporation v Venkata Seshaya 1983 (1) ALT 344, the

executing court therein held that as the debt had abated against the

principal debtor, the debt against surety also stands discharged.

Accordingly, the executing court dismissed the execution petition.

The petitioner/decree holder had preferred a revision against this

order and while deciding the revision, the Andhra Pradesh High

Court held that issue to be considered was, whether the plaintiff

decree holder can proceed only against the surety when the principal

debtor's liability stands discharged because of the omission on the

part of plaintiff and the suit had abated against principal debtor for

his failure to bring legal representative of the principal debtor on

record. After considering the various provisions like Section 126, 128,

134, 139 and 140 of the Indian Contract Act, then in para-9 of its

judgment, the Andhra Pradesh High Court was pleased to hold as

follows :-

"9. A perusal of the above provisions clearly shows that the person, who gives guarantee to discharge the liability of a third person in case of his default, is called 'surety' and the person in respect of whose favour the guarantee is given is called the 'principal debtor'. The liability of the surety is co-extensive with that of principal debtor. Section 134 shows that the surety's liability stands discharged by any contract between the creditor and the principal debtor by which the principal debtor is released or by any act or omission of the creditor, the legal consequences of which is the discharge of the principal debtor. Section 139 also contemplates the discharge of surety by the creditor's act or omission impairing surety's eventual remedy. As per S.140, where a guaranteed debt has become due, or on default of the principal debtor, the surety, upon payment, is invested with all the rights, which the creditor had against the principal debtor. In the above provisions, it is clear that the rights and and obligations on both the creditor and the surety are provided. In the present case it is a fact that though the creditor filed the suit both against the principal debtor and the surety, the principal debtor died during the pendency of the suit and because of the omission on the part of the creditor, the suit stands abated against the principal debtor. The effect of it is the creditor cannot proceed against the principal

debtor and the debt stands discharged because of the omission to act on the part of the creditor. Now it is to be examined 'Whether by the said omission on the part of the creditor, which had resulted in the abatement of the suit against the principal debtor and consequential discharge against the principal debtor would result in discharge of the surety or not'. As already noticed, the surety is only a guarantor for the dues to be discharged by the principal debtor and in case of default committed by the principal debtor, the surety has to make good the loss to the creditor.

It is also not in dispute that the creditor has the right to proceed against the surety also, even though he can proceed against the principal debtor. If the creditor has recovered the amount due by the principal debtor from the surety, the surety stands subrogated into the shoes of the creditor and he can proceed and recover the amount paid as a surety from the principal debtor. By virtue of the act of omission by the creditor, the surety had lost such a right. The surety is only a guarantor and in case he pays the amount guaranteed by him on behalf of the principal debtor, he must have the right to proceed against the principal debtor. In the present case, as a result of an act of omission on the part of the creditor, the liability of the principal debtor stands discharged, as the creditor's suit against him had abated. Therefore, in terms of S.134, it should be inferred that the liability against the surety also stands discharged, as a result of the abatement of the

suit against the principal debtor". (emphasis supplied)

After considering various other decisions cited before it,

it was further held in this case that as a result of the omission on the

part of the creditor in bringing legal heirs on record, the right of the

surety that was provided under section 140 of the Contract Act to

proceed against the principal debtor had been lost. It was further

held that, in terms of Section 134 of the Contract Act the surety is

discharged by the ommission of the creditor in allowing the suit to

abate against principal debtor and consequently the liability was

discharged against principal debtor.

12. In para 15 of its order the Andhra Pradesh High Court

further held that, 'due to the death, as the suit abated against the

principal debtor, the liability stands discharged against principal

debtor. More so, as a result of omission on the part of creditor, the

debt against surety also stands discharged. The liability of surety is

always to make good the loss that was caused as a result of the

default of the principal debtor and if the surety discharges the

liability of the creditor, he has a right to proceed against principal

debtor. In the aforesaid case, it was held that as a result of the

omission of the creditor, the surety is denied of such a right and

hence it would not be proper to hold that the surety is still liable to

the creditor even after the discharge of the principal debtor as a

result of the omission on the part of the creditor.

13. In Para 16 it was held that, "once the suit is abated

against principal debtor, it is equally abated/dismissed against the

surety also. Therefore, the decree, even if it is passed against the

surety, when the principal debtor has been discharged as a result of

the abatement of the suit, is illegal and unenforceable against the

surety also. In that view of the matter, the petitioner is not entitled to

proceed against the surety. Even though the trial Court has passed a

decree against the surety, such a decree is not executable at all".

14. In the instant case, the executing court, has tried to

distinguish this judgment of the Andhra Pradesh High Court by

observing that in the present case, the name of defendant no.1 was

deleted in view of Pursis Exhibit-12 filed by the plaintiff claiming that

defendant no.1 had died without leaving any legal heirs. The

executing court further held that in the judgment under execution,

the trial court had considered this aspect and held that the defendant

no.1, the principal debtor, had died unmarried and was not survived

by any legal heirs. Therefore, the question of bringing his legal heirs

on record did not arise. The executing court thus held that once that

judicial finding has become final, it cannot be disturbed in the

execution proceedings and accordingly, the learned executing court

held that the liability of surety being executable, judgment and

decree passed against the surety cannot be set aside.

15. However, in this respect, the facts of the suit reflect

otherwise. It may be true that by pursis filed at Exhibit-12 plaintiff

had informed the court on 22/3/2002 that defendant no.1 has died

without leaving any successor and his name be struck down/deleted

from the suit. Accordingly the name of defendant no.1 also appears

to be deleted by passing an order to that effect was passed on

10/10/2004.

16. However record of the suit shows that there was one

more application which was filed at Exhibit-15 by the plaintiff which

is produced in this revision application at page-32. The said

application was for grant of permission to make New India Assurance

Company as party to the suit. In para-1 of the said application, it was

stated that defendant no.1 had died; he was employee of New India

Assurance Company Ltd. and after his death the amount of gratuity,

Insurance, Provident fund is due to his successors from the said

Insurance Company. However as the plaintiff has charge over the

said dues and the employer of the deceased, namely the Insurance

Company, may disburse this amount to his successors as per the

Schedule-II of Hindu Succession Act, plaintiff prayed to add the

employer insurance company as party to the suit so as to restrain it

from disbursing the said dues of defendant no.1 to his successors.

17. This application came to be allowed by the Trial Court

and the insurance company was arrayed as defednant no.4 in the

suit.

18. The insurance company has filed its written statement to

the suit and in para-1 itself, it was categorically stated that the

insurance company was in touch with the legal heirs of defendant

no. 1 for settlement of his terminal dues.

19. Thus, it is apparent that there were some legal heirs left

behind by the defendant no.1 who were, just as entitled to get his

terminal dues, similarly they were also liable to satisfy the debt

obtained by the defendant no.1.

20. Hence, the finding by the Trial Court that defendant

no.1 has died without leaving any legal heirs and that the suit needs

to be abated against defendant no.1 and therefore it can be

proceeded against the defendant no.2 and 3 alone cannot be

considered as a legal or valid or based on the facts. Therefore it has

to be held that defendant no.1 has died leaving behind some legal

heirs. Since on account of failure on the part of the plaintiff to bring

his legal heirs on record, the suit is abated against him, then, as held

in the above said authority of Andhra Pradesh High Court, in view of

clear cut position of the law laid down in Section 134 of the Contract

Act, the remedy which was open to the sureties to proceed against

the principal debtor is lost. Section 134 of the Contract Act clearly

provides that the surety is discharged by any contract between the

creditor and the principal debtor, by which the principal debtor is

released or by any act or ommission of the creditor, the legal

consequences of which is the discharge of the principal debtor.

21. Here in this case on account of omission on the part of

the plaintiff in bringing the legal heirs of defendant no.1 on record,

there is discharge of the principal debtor and therefore surety also

stands discharged from the debt.

22. This legal position is also reflected in the various other

judgments relied upon by the learned counsel for applicant. One such

judgment is of the Hon'ble Supreme Court in the case of Shri

Chand and others v/s M/s Jagdish Pershad Kishan Chand and

others AIR 1966 SC 1427. Therein the Apex Court was pleased to

consider the liabilities of the sureties in the light of various provisions

of Indian Contract Act. The principal question raised before the Apex

Court for consideration was whether the surety bond can be enforced

if the decree holder had committed an act, by which the remedy of

the sureties against the judgment debtor, had been impaired and

therefore the sureties stood discharged? While answering this

question, in para-7 of the judgment, the Apex Court has relied upon

its earlier decision in the case of State of Punjab V/s Nathu Ram

(1962) 2 SCR 636, explaining the tests applicable, in considering

whether an appeal abates in its entirety when it has abated qua one

of the respondents ? In that context it was held that, "abatement of

an appeal against the deceased respondent means not only that the

decree between appellant and the deceased respondent has become

final, but also as a necessary corollary that the appelate court cannot

in any way modify that decree directly or indirectly". It was further

held that, when the decree in favour of the respondents is joint and

indivisible, the appeal against the respondents, other than deceased

respondent, cannot be proceeded with if the appeal against

deceased respondent has abated.

23. Here, in this case, the suit is filed against the defendants

jointly and severally and therefore if the suit is abated against the

principal debtor, then the suit abates against the sureties also. This

position is also further clarified by the Apex Court in para-9 of the

judgment in Sri Chand and others v/s M/s Jagdish Pershad Kishan

Chand and others AIR 1966 SC 1427 by observing that,

"9. Liability of the sureties is under the law joint and several. If a creditor seeks to enforce the surety bond against some only of the joint sureties, the other sureties will not on that account be discharged; nor will release by the creditor of one of them discharge the other; vide Sections 137 and 138 of the Contract Act. But the fact that the surety bond is enforceable against each surety severally, and that it is open to the creditor to release one or more of the joint sureties, does not alter the true character of an adjudication of the Court when proceedings are commenced to enforce the covenants of the bond against all the sureties. We are not concerned in this appeal with the privilege which a creditor may exercise, but with the effect of an adjudication which the Court has made in a proceeding to enforce the covenant of the Bond. The mere fact that the obligation arising under a covenant may be enforced severally against all the

covenantors does not make the liability of each covenantor distinct. It is true that in enforcement of the claim of the decree holder the properties belonging to the sureties individually may be sold separately. But that is because of the liability arises under distinct transactions".

24. The similar question was raised before the Delhi High

Court also in the case of State Bank of Patiala V/s S.K. Mathur,

reported in LAWS (DLH)-2011-2-118, where a composite suit for

recovery of the amount was filed by the creditor against two

defendants, of which defendant no.1 was principal debtor and

defendant no.2 was the gurantor. In the course of the proceedings,

notices issued by the court revealed that defendant no.1 has expired

and consequently the suit came to be abated against defendant no.1.

The question which arose for consideration was whether the suit has

abated as a whole i.e. against the defendant no.2 as well? Then, after

considering the provisions of Section 134 of Indian Contract Act,

referred above, it was held by Delhi High Court that, "admittedly in

the instant case joint claim had been preferred against two

defendants, of whom one having died, the suit stood abated against

him. Since the suit proceedings abated against the principal debtor,

the question of continuance of the suit against guarantor would not

arise. Claim against the guarantor was not divisible".

25. In this judgment of the Delhi High Court, reliance was

also placed on the said decision of Apex Court in the case of Sri

Chand and others v/s M/s Jagdish Pershad Kishan Chand (supra)

and others and it was held that, "once the suit had abated against the

defendant no.1 result would be that the suit is dismissed against him

and if the claim is decreed against the defendant no. 2, there would

be conflict between the decree of dismissal passed against the

defendant no.1 and, therefore, it would lead to the court passing a

decree which has even otherwise become final with respect to the

same subject matter between the appellant and deceased defendant

no.1".

26. The Karnataka High Court has also in the case of T. Raju

Shetty v Bank of Baroda AIR 1992 Karnataka 108, when faced with

similar question, after placing reliance on the above said judgment

ِSri Chand v/s M/s Jagdish Pershad Kishan Chand, held that when

creditor chose to proceed against Pricipal debtor and the surety

jointly and severally and the suit abates against the principal debtor,

the same cannot be decreed against surety because in respect of same

subject matter of the suit there will be conflicting decisions.

27. Thus the consistent legal view regarding Section 134 of

the Indian Contract Act, is clearly to the effect that if the suit filed by

the plaintiff against the principal debtor and surety is joint and

composite, on the dismissal or abatement of the suit against the

principal debtor, the suit cannot survive against the surety and it has

to be abated or dismissed in totality.

28. In the case of Bank of India V/s Orient Woollen

Textile Mills Pvt. Ltd. 2004 (1) Bom.C.R. 233 also, the suit was

abated against the defendant no.3 as legal heirs of that defendant

were not brought on record. Defendant no.1 and 2 - the sureties,

therefore raised objection that proceeding is liable to be dismissed

against them also. While deciding the question as to whether such

proceedings are liable to be dismissed against the defendant no. 1

and 2 also, in view of the abatement against defendant no.3, it was

held in para-27 of the judgment that, in such circumstances the court

has to find out whether the cause of action against each of the

defendant was capable of being separated and test would not be as to

whether separate suit could have been filed against the defendant

who has died. In para-33 it was further held that the cause of action

against each of the defendant is not capable of being separated and

therefore it would not be possible to pass a conflicting and

contradictory decree against the Defendant Nos. 1 and 2 once the

suit stands dismissed by way of abatement as against the defendant

No.3.

29. Therefore legal position on this aspect being well settled

and well crystalized, it has to be held that in this case as the

compositely instituted suit was abated and dismissed against

defendant no.1 due to failure on the part of plaintiff to bring legal

heirs of defendant no.1 on record, in view of the provisions of Section

134 of the Contract Act, suit stands abated against sureties viz.

Defendant No.2 and 3 also.

30. In so far as the authorities relied by the counsel for

respondent-Plaintiff herein, namely Infrastructure Leasing and

Financial services Ltd., Mumbai V/s Vijaya V. Prabhu AIR 2010 Bombay

72 and Sicom Limited V/s Padmashri Mahipatrai J. Shah and others

2005(3) Mh.L.J.,125, there cannot be any dispute as to the legal

propositions laid down therein on the basis of provisions of Section

126 and 128 of Indian Contract Act, that liability of the surety is

coextensive with that of the principal debtor and therefore the suit for

recovery of the amount can be filed by the creditor only against the

guarantor also. The liability can be as against guarantor even without

initiating any proceedings as against principal debtor. There can also

be no dispute about the principles of law laid down in the judgment

of Industrial Investment Bank of India Ltd., V/s Biswanath

Jhunjhunwala (2009) 9 SCC 478 relied upon the learned counsel that

liability of surety being coextensive with that of the principal debtor,

the decree holder can execute the decree against the guarantor

without proceeding against principal debtor.

31. However the question here is, when a composite and

joint suit is filed against, both the principal debtor and the guarantor

and the suit is abated against the principal debtor on account of the

failure on the part of the plaintiff to bring the legal heirs on record,

whether the suit can survive against the sureties? This issue is not

considered in the authorities relied upon by learned counsel for

respondents. There can no be dispute that separate suit can be filed

against the guarantor even without initiating action against the

principal debtor. The suit for recovery can also be filed against

sureties alone. However when both the principal debtor and

guarantors are impleaded in one and same suit and the suit abates

against principal debtor, then in view of the law laid down in the

above said case of Hon'ble Supreme Court Sri Chand and others V/s

M/s Jagdish Pershad Kishan Chand and other judgments referred

above, it has to be held that the suit stands abated or dismissed

against sureties also otherwise there would be a conflicting decree of

dismissal/abatement passed against defendant no.1 and would

further lead to the court passing the decree which is even otherwise

become final to the same subject matter between appellant and

deceased defendant no.1.

32. In the instant case, therefore, as evidence on record

shows that defendant no.1 has died leaving behind him some legal

heirs and that was the reason why defendant no.4, employer of

defendant no.1, was impleaded in the suit so that, his legal heirs

cannot claim the terminal dues of defendant no.1 from the defendant

no.4, and as those legal heirs were not brought on record, on account

of failure of the plaintiff to do so, the suit had abated against the

defendant no.1 principal debtor. Hence the decree passed in the said

suit cannot be executable against defendant no.2 and 3 also.

33. As to the question whether such decree can be

challenged in the execution proceedings, without prefering an appeal

against the same, the law is well settled that, if a decree is

unexecutable, then such objection can be raised even in the execution

proceeding. The Hon'ble Supreme Court has in, Seth Hira Lal Patni

v. Sri Kali Nath AIR 1962 SC 199, clearly held that, "the validity of

the decree can be challenged in the execution proceeding on the

ground that the court which passed decree was lacking inherent

jurisdiction in the sense that it could not have seized of the case

because the subject matter was wholly foreign to its jurisdiction or

that defendant was dead at the time when suit was instituted or

decree passed, or some such other ground which could have the

effect of rendering the court entirely lacking in jurisdiction in respect

of the subject matter of the suit." (emphasis supplied)

34. Here in this case, evidence on record shows that

defendant no.1 had died in the year 1999 itself, even before

institution of the suit. His legal heirs, though in existence as per

plaintiff's own statement on oath, were not brought on record during

pendency of the suit. In such situation, when the decree is passed

against the sureties, then such decree can be challenged in the

execution proceeding, it being unexecutable.

35. One additional submission advanced by learned counsel

for applicant is to the effect that the decree passed in the present

matter is obtained by playing fraud on the court as the application

Exhibit-15 filed by plaintiff for impleadment of defendant no.4 in the

suit and written statement filed by defendant no. 4 were not brought

to the notice of the trial court while deciding the said suit. It is

submitted that, while answering issue no.2 learned Trial Court has

not considered both these documents, as they were not brought to the

notice of Court by the plaintiff. It is submitted that, learned trial court

relied only upon pursis Exhibit-12 and ignored the application

Exhibit-15, as also the affidavit filed in support of written statement

of defendant no.4. Hence it is urged that when the decree was

obtained by fraud, then such decree cannot be enforced by executing

court and such issue can be raised even in executing court.

36. To substantiate this submission, reliance is placed on the

judgment of the Apex Court in the case of S.P. Chengalvaraya Naidu

V/s Jagannath AIR 1994 SC 853 and that of this court in the case of

Abdulla Umar Haji Ismail Merchant and others V/s Subai Mura

Rabari and others 1998 (3) Mh.L.J.91. It is urged that in both these

authorities it was held that if the party is seeking disretionary relief,

that party must approach the Court with true and full disclosure of all

relevant facts and there should be no attempt to mislead the court.

Here in this case, according to the learned counsel for appellant, by

not bringing these 2 documents, namely application Exhibit-15 that

was with affidavit and the written statement filed by defendant no.4,

to the notice of the Court, the plaintiff has not brought the entire

facts before the trial court and thereby misled the court. It is urged

that, plaintiff was under an obligation to bring these fact before the

court.

37. However, in my considered opinion, the observations

which are appearing in both these authorities relied upon by learned

counsel for appellant, are made in the context of, when the

discretionary jurisdiction of the court is invoked and secondly

pertaining to the facts are exclusively within the knowledge of the

party. In this case there is no question of plaintiff misleading the

court in any way for obtaining the decree, when those two documents

were very much part of the record for the consideration of the trial

court. Merely because the trial court has not considered these

documents, does not mean that plaintiff has suppressed those

documents in any way or thereby played fraud on court. Therefore

this submission cannot be accepted.

38. To sum up therefore, it has held that, in the light of the

legal position discussed above, the impugned order passed by the

executing court rejecting applicant's application for dismissal of the

execution proceedings, needs to be quashed and set aside, it being

against settled legal position and therefore cannot be called as legal,

valid and proper.

39. Accordingly, this revision application is allowed the

impugned order passed by the executing court stands quashed and set

aside. Application filed by the applicant before the executing court,

vide Exhibit-12 in the said execution proceeding, is allowed.

Execution proceedings stand dismissed against the applicant,

Respondent No.2 and Respondent No.3 also, as they stand in the

same position.

JUDGE

nandurkar