IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH: HYDERABAD TUESDAY, THE FIFTEENTH (15TH) DAY OF MARCH, TWO THOUSAND AND ELEVEN Present: HON’BLE SRI JUSTICE G.V.SEETHAPATHY Civil Revision Petition No.3685 of 2002 Between: Karumanchi Rattamma (Died) others … Petitioners And: Narra Seetharavamma (Died) & others … Respondents THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY Civil Revision Petition No.3685 of 2002 ORDER: This revision is directed against the order dated 22.07.2001 in EP No.21 of 2000 in OS No.18 of 1977 on the file of the Senior Civil Judge, Parchur, wherein, the said OS filed by the petitioners/decree-holder under Section 145 CPC read with Order XXI Rule 66 CPC for recovery of the decree amount by sale of secured property, was dismissed. 2. Heard both sides. Perused the record. 3. The first respondent herein filed suit against the petitioners/defendants for permanent injunction. She also filed a petition for temporary injunction and obtained interim injunction. The defendants 3 and 4 filed an appeal CMA No.41 of 1976. The learned Senior Civil Judge appointed a Receiver in respect of the suit property. The first respondent-plaintiff preferred CRP No.673 of 1976 before this Court. This Court in CMP No.13023/1976 directed the first respondent-plaintiff to deposit Rs.20,000/- and she deposited the same. Subsequently, the Court directed the first respondent-plaintiff to deposit Rs.10,000/- in CMP No.1168 of 1979 and the same was also deposited. The first respondent- plaintiff was further directed to deposit Rs.20,000/- in CMP No.13644 of 1977 for the years 1977-78. The JDrs 2 to 4 furnished security for Rs.10,000/- and executed a security bond on 26.08.1978. The Court also directed them to furnish a third party security for Rs.10,000/- for the years 1978-79 and it was furnished. Subsequently, the suit was transferred to Sub Court, Chirala and the same was also dismissed on merits on 26.11.1984. An appeal filed before this Court in Tr. A.S.No.3049 of 1985 was also dismissed on 03.07.1997. Thereafter, the defendants therein, who are decree-holders herein, filed EP for recovery of the security amount under Section 145 CPC. The respondents-JDrs opposed the said EP on the ground that the security bonds are not enforceable as they are not registered and there is no executable decree. The execution Court up held the contention and dismissed the E.P. as not maintainable. Aggrieved by the same, the decree-holders/defendants filed the present revision. 4. The first respondent herein is the plaintiff and the respondents 2 to 4 are the third parties, who furnished third party security on behalf of the first respondent. As the suit and the appeal were decided against the plaintiff, the petitioners/ defendants became entitled for recovery of the surety amount. The respondents/JDrs contend that unless the surety bonds which shall be deemed to be granted or registered, they are not enforceable and so the provisions of Section 145 CPC are not applicable. 5. The learned counsel for the petitioners would contend that the execution court erred in applying the decision reported in ‘Pona Babulal &others vs. The Hyderabad Municipal Corporation[1]’, as the said decision was rendered prior to amendment of CPC of 1976. 6. Section 145 CPC as amended states as follows: Sec.145. enforcement of liability of surety:- Where any person has furnished security or given a guarantee – (a) for the performance of any decree or any part thereof, or (b) for the restitution of any property taken in execution of a decree, or (c) for the payment of any money, or for the fulfillment of any condition imposed on any person, under an order of the Court in any suit or in any proceeding consequent thereon, the decree or order may be executed in the manner herein provided for the execution of decree, namely:- (i) if he has rendered himself personally liable, against him to that extent; (ii) if he has furnished any property as security, by sale of such property to the extent of the security; (iii) if the case falls both under clauses (i) and (ii), then to the extent and such person shall be deemed to be a party within the meaning of Section 47: Provided that such notice as the Court in each case thinks sufficient has been given to the surety.” 7. From the above provision, it can be seen that the decree or order may be executed in the manner provided for execution of the decrees, namely, inter-alia, if he has furnished any property as security, by sale of such property to the extent of the security. Thus, the property which is offered as security can be brought to sale in execution of the decree for realization of the amount, for which the security was given. 8. In ‘Pona Babulal’s case (first supra) relied upon by the execution Court, this Court held as follows: “The object of the section 145 is to provide a summary remedy for the enforcement of the liability of the surety who has given security for any of the purposes enumerated in the section. But for this section, the party for whose benefit the security has been given would have to file a separate suit to enforce the security. This section dispenses with the necessity of a suit and enables him to enforce the security by execution proceedings in the same manner as if the surety was a party to the decree or order in respect of which security has been given. But the procedure provided by the section applies only to the extent to which the surety has rendered himself personally liable and therefore whenever a surety makes himself personally liable and in addition charges his property it is only the personal liability that can be enforced under section 145 CPC. 9. As per the amended provision of section 145 CPC, the decree can be executed against the surety in a threefold manner, namely, if he is rendered himself personally liable against him to that extent and if he has furnished any property as security, by sale of such property to the extent of the security and if the case falls both under clauses (1) and (2), then to the extent specified in those clauses. In the present case, admittedly, the surety furnished the EP schedule property as security and also rendered himself personally liable. The petitioner/DHr can therefore recover the amount of surety by enforcing personal liability against the respondents and also by proceeding against the property offered as security. 10. In ‘Indian Metals & Ferro Alloys vs. OSE Board[2]’, it is held as follows: “The security bonds furnished to a Court under its order, whether executed in favour of the Court or otherwise, would not require registration under the Registration Act, because such transactions are steps in legal proceedings and the security bonds when accepted become incorporated into judicial proceedings. Thus where the bonds have been executed in favour of the Court pursuant to the order of the Supreme Court and are not operative until their sufficiency is checked and accepted by the Court it is only on acceptance of the security bonds by the Court that rights are created and liabilities are accrued and obliges the surety to his undertaking and places the properties offered as security at the disposal of the Court for being dealt with under Section 145 CPC. These bonds, therefore, become part of the judicial proceedings and are incorporated with it and do not require registration.” 11. In the present case also, the security bonds furnished by the respondents/JDrs in pursuance of the orders of the Court, which were accepted by the Court are only steps in legal proceedings and they were incorporated into judicial proceedings and hence, they did not require registration. It is only on the acceptance of the security by the Court, the rights and liabilities are approved and the surety is obliged to discharge the liability and the property offered is placed at the disposal of the Court for being dealt under Section 145 CPC. Thus, if the execution of the bond formed part of the judicial proceedings, it could not require registration. In the above case also bonds were executed in favour of the Court giving undertaking all the properties enumerated in the schedule therein may be proceeded against for the realization of the amount, which would be found due to the defendants. When once bonds were accepted by the Court, it was held the said bonds furnished to the court under its order, do not require registration under the Registration Act, as the said transactions are placed in legal proceedings and they became incorporated into the judicial proceedings. 12. In the circumstances and in view of the clear provision contained in Section 145 CPC, it is held that the security bonds furnished by the respondents-JDrs in pursuance of the orders of this Court do not require registration and the execution petition for enforcement is maintainable. The impugned order of the execution Court is therefore held unsustainable and the same is accordingly set aside and consequently, EP stands restored and the execution court shall proceed with the E.P. in accordance with law. 13. In the result, the civil revision petition is allowed. _________________ G.V.SEETHAPATHY Date: 15.03.2011 bss [1] 1960(II0An.W.R. 510 [2] AIR 1980Orissa 44