RSA No.470 of 1988 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.470 of 1988 Date of decision 03.08.2010. Rattan Lal ...... Appellant. versus State of Haryana and others. ...... Respondents. CORAM :- HON'BLE MR.JUSTICE K.C.PURI. Present : Mr. C.B.Goel, Advocate for the appellants. Mr. Lekh Raj Nandel, AAG, Haryana. K.C.PURI, J. This is a regular second appeal directed by plaintiff-appellant against the judgment dated 14.12.1987 passed by Shri S.K.Jain, District Judge, Kurukshetra vide which the appeal preferred by the defendant- respondent against the judgment dated 4.4.1987 passed by Shri Nand Kishore, Sub Judge IInd Class, Kurukshetra decreeing the suit of the plaintiff, stood partly accepted and the defendants were restrained from recovering the amount over and above the amount fallen due during the period with effect from 29.4.1981 to 29.12.1981 and the impugned notice RSA No.470 of 1988 2 Ex.PW2/1 was also held illegal and void. Shorn off unnecessary details, the facts in brief are that in an open auction that took place on 29.04.1981 L-2 license for English Wine and Beer shop for the year 1981-82 with effect from 29.04.1981 to 31.03.1982 for Ladwa City, hammer fell in favour of Ashok Jindal, Mukesh Kumar and Brahma Nand partners of M/s Ashok Jindal and Co., they being the highest bidders. A bond in the sum of Rs.50,000/- for payment of any excise dues or for the amount which may fall due in future was executed and the plaintiff and Amrit Lal stood sureties in that amount for M/s Ashok Jindal and Co., L-2 Licensees, Ladwa City. It was witnessed by Rajinder Kumar and Vinod Kumar Jain, Advocate and attested by Shir Hem Chand Gupta Notary Public, Kurukshetra. Pleading that he and Amrit Lal had signed the said bend as witnesses and he was not liable for any act and conduct or lapse on the part of the said Ashok Jindal, that after 29.04.1981 Ashok Jindal had inducted two more persons in the business, that the plaintiff never consented for the same even if the alleged surety bond is forged against him, that in that case it was the duty of the Excise and Taxation Commissioner to obtain a valid surety bond from the plaintiff, that Ashok Jindal transferred the said business in favour of Satish Kumar vide agreement dated 29.06.1981 which transfer was allowed by the Excise and Taxation Commissioner and necessary amendments were incorporated in the record, that therefore, Satish Kumar transferee was asked to furnish surety bond for payment of the excise and sales tax, if any, who agreed for the same whereupon Pushap Raj son of Kasturi Chand of Ladwa had RSA No.470 of 1988 3 executed surety bond, that under these circumstances the bond already executed by the plaintiff stood revoked and became unexecutable, that Ashok Kumar had died and that Excise and Taxation Commissioner found a sum of Rs.49,000/- recoverable from him and, therefore, initiated recovery proceedings against the surety Pushap Raj by issuing notice dated 19.02.1985, the plaintiff brought civil suit No.632 of 1986 for a decree of permanent injunction restraining the defendants from recovering the said amount from him. The suit was contested by the defendants. They filed written statement and took preliminary objections with regard to absence of notice under Section 80(1) CPC, suit being bad for non-joinder of necessary parties, that the amount of arrears of sales tax was being recovered as the arrears of land revenue under Section 34 of the Punjab Land Revenue Act, that under Section 78 of the Punjab Land Revenue Act the plaintiff should first deposit that amount under protest and then he could file the suit for refund of the same. Otherwise also civil court had no jurisdiction in view of Section 158 of the Punjab Land Revenue Act, that under Section 62 of the Haryana General Sales Tax also the civil court had no jurisdiction to entertain the said suit, and that the suit had not been properly valued for the purposes of court-fee. On merits their case is that L-2 License for the year 1981-1982 for Ladwa City was granted in the name of Ashok Jindal, Mukesh Kumar and Brahma Nand, that the plaintiff and one Amrit Lal had stood sureties for the liability of the firm in the name and style of M/s Ashk Jindal and Co., that liability of the plaintiff arises out of the said bond, that Pushap Raj had also stood surety for M/s Ashok Jindal and Co., through RSA No.470 of 1988 4 another surety bond dated 01.12.1981. It was denied that defendant No.2 had become prejudiced against the plaintiff. The plaintiff having not withdrawn the surety his liability under the bond existed. After receiving the replication, learned trial Court framed following issues:- 1) Whether the plaintiff never stood surety for Ashok Jindal and signed the surety bond as a witness and not as surety? 2) If the preceding issue is not proved whether the surety bond stands revoked and has become unenforceable ? 3) Whether the impugned action of defendant No.2 in issuing the notice to the plaintiff for recovery of the disputed amount is illegal as alleged in para No.9 of the plaint? 4) Whether the suit is bad for want of notice under Section 80 CPC? 5) Whether the suit is bad for non-joinder of necessary parties? 6) Whether the suit is not maintainable without depositing the amount as alleged? 7) Whether Civil Court has no jurisdiction to try this suit? 8) Whether the suit is not properly valued? 9) Relief. In order to prove his case the plaintiff himself appeared as PW1 and examined PW2 Girdhari Lal Gupta, Clerk, Excise and Taxation Department, Kurukshetra. He exhibited on record copies of summons Ex.P1, and Ex.P2, copy of notice Ex.PW2/1, copy of bond Ex.PW2/2 and RSA No.470 of 1988 5 copy of affidavit Ex.PW2/3. On the other hand the defendants examined DW1 Sham Lal Excise Inspector, DW2 Balvinder Singh Sales Tax Inspector and exhibited on record Ex.D1 copy of the bond, Ex.D2 copy of form S.T.I., Ex.D3 copy of challan, and Ex.D4 copy of the affidavit. After appraisal of the evidence, the learned trial Court decreed the suit of the plaintiff vide judgment dated 4.4.1987. Feeling dis-satisfied with the judgment dated 4.4.1987, the appeal was preferred before the First Appellate Court. The said appeal was partly accepted by learned District Judge, Kurukshetra vide judgment dated 14.12.1987, as aforesaid. Feeling dis-satisfied with the judgments dated 14.12.1987, plaintiff-appellant has preferred the present regular second appeal before this Court. I have heard learned counsel for the parties and have gone through the records of the case. Learned counsel for the appellant has challenged the judgment and decree of First Appellate Court dated 14.11.1987 on the ground that finding returned by the First Appellate Court to the effect that plaintiff signed the agreement as surety is against the evidence on record. The trial Court has misread and misinterpreted the evidence in this regard. The plaintiff-appellant has simply signed the agreement as witness and not as surety. The other limb of arguments of learned counsel for the appellant is that there is concurrent finding of both the Courts below that RSA No.470 of 1988 6 vide order dated 29.12.1981 Ex.P2/1 Satish Kumar became the proprietor/owner of the Firm and fresh address furnished by Pushap Raj and name of the firm has been changed. So, in these circumstances, the lower court holding that department may recover the amount that fell due w.e.f. 29.4.1981 to 29.12.1981 is not legally sustainable. The recovery notice was issued on 11.2.1985 whereas the new firm has come into existence on 29.12.1981. So, on that account also, the plaintiff/appellant is not liable to pay the amount. Learned counsel for the respondent-State has supported the judgment of the First Appellate Court. The finding recorded by the First Appellate Court to the effect that plaintiff stood guarantor for the original firm to whom L-2 Licence was given from 29.4.1981 to 31.3.1982 is a finding of fact based upon sufficient reasoning and that cannot be interfered in the regular second appeal. The other contentions raised by learned counsel for the appellant to the effect that since new firm has come into existence on 29.12.1981 and the same was owned by Satish Kumar and surety of that firm was furnished by Pushap Raj is concerned, the First Appellate Court has only dismissed the suit of the plaintiff till the new firm came into existence on 29.12.1981. The plaintiff being guarantor is bound to indemnify the State in respect of Tax accrued during the period 29.4.1981 to 29.12.1981. The First Appellate Court has rightly held that after 29.12.1981, the plaintiff is not liable to pay any amount as a new firm has come into existence and fresh surety has been furnished. Unless and until, upto the date, the surety of plaintiff extended, the plaintiff is liable to pay the amount to the date. RSA No.470 of 1988 7 So, in view of the above discussion, the substantial questions of law raised by the appellant on the facts and circumstances of the case stand determined against the appellant and consequently, the appeal is without any merit and the same stands dismissed. The interim order shall stand vacated. Decree sheet be prepared. A copy of this judgment be sent to the trial Court for strict compliance. ( K.C.PURI ) JUDGE August 3rd, 2010 sv