Case: Lakhi Ram Ram Dass Vs. Har Prasad Syal and Others

in respect of her property left in Pakistan". 14. From the statement of counsel before the Tribunal and the Tribunals said order it would appear (1) that the application was for declaration and adjustment, (2) that the application was in respect of the joint debt of respondents 2 and 3, which must mean the sum of Rs. 40,000/- under the decree for which respondents 2 and 3 were jointly and severally liable, and (3) that that debt was declared to be Rupees 40,000/- but was to be paid in proportion to the compensation which respondent 2 would get on the claim made by her in respect of her property in Pakistan. It is also clear that the relief claimed by respondent 2 was for revision and apportionment of the said sum of Rs. 40,000/- under Sections 21 and 22 of the Act. 15. That being the position, it would be correct to say that the Tribunals order related to Rs. 40,000/-, out of the total decretal amount of Rs. 80,000/- in respect of which respondents 2 and 3 were jointly and severally liable. It would further appear from the statement of counsel before the Tribunal that the liability of respondent 3, as the surety for that amount, was not dealt with by the Tribunal, and therefore, remained unaffected. 16. Since it would appear that the application was in respect of the debt jointly payable by respondents 2 and 3, i.e., in respect of Rs. 40,000/- only, we are not concerned in these appeals with the rest of the amount of Rs. 40,000/- for which respondents 1 and 2 only were liable. The amount of Rs. 29,000/- deposited in the executing court in Delhi on behalf of respondent 3 was obviously the balance due by respondent 3 in respect of his liability as the surety for Rs. 40,000/-, the appellants having already realised Rs. 11,000/- from him. From the order of the Tribunal, dated June 29, 1953, it is clear that it was made under sections 21 and 22 of the Act. That order became final and binding on the appellants as no appeal provided under the Act was ever filed against it by them. 17. Under S. 22 of the Act, it is the duty of the Tribunal, where a debt is due from a displaced debtor jointly with another person, to apportion the liability between them according to the rules therein laid down. Under clause (d) of Section 22, if one joint debtor is a displaced person and another is not, the sum apportioned to the non-displaced person shall not be deemed to be a debt within the meaning of the Act, and therefore, the creditor may in respect of such a debt seek any remedy open to him in a civil court or otherwise. Therefore, the appellants had the right to proceed in execution against respondent 3 in respect of his liability as the surety for 40,000/-. But his liability as such surety was co-extensive with the liability of respondents 1 and 2, the principal debtors, and could not exceed their liability. This principle is incorporated in cl. (g) of S. 22, which lays down that where the relationship between joint debtors is that of principal and surety, nothing contained in the Act shall prevent the institution of a suit for the recovery of the debt against the surety, but no decree shall be passed in such a suit for an amount in excess of the amount decreed or which can be decreed against the principal debtor in accordance with the provisions of the Act. 18. The position is thus clear that the appellants could not recover any amount from respondent 3 in excess of the amount claimable by them from respondents 1 and 2. No doubt, the Tribunals order had declared the joint debt to be Rs. 40,000/-, but it also provided that respondent 2 had to pay that amount in proportion to the compensation which she would receive under her claim in lieu of the property left by her in Pakistan. The amount recoverable from respondent 3 could not exceed that amount by reason of S. 22 (g) as also the principle that the liability of a surety is co-extensive with that of the principal debtor. It has not been the case of the appellants during any stage of these proceedings that the compensation payable to respondent 2 has so far been fixed or ascertained. So long as that has not been done, the extent of the liability of respondent 3 as the surety also cannot be fixed. In any event, since the liability of respondent 2, as the principal debtor, has been made payable from out of the compensation recoverable by her and in proportion to such compensation, the Tribunals order has superseded the decree at least as regards Rs. 40,000/- payable jointly and severally by respondents 2 and 3 thereunder. That order having provided (1) that the amount recoverable would be in proportion to the compensation, and (2) that it would be recovered from that compensation, the appellant could not claim Rs. 29,000/- deposited in the execution court, nor could that court order it to be paid to the appellants. In any case, so long as the compensation due to respondent 2 has not been ascertained, the appellants claim to the said amount of Rs. 29,000/- was premature as the liability of respondent 3, if any, could not until then be ascertained. Further, the order of the Ahmedabad court, which on its confirmation by the High Court of Bombay, became final throws another difficulty in the way of the appellants, disabling them from claiming the said sum of Rs. 29,000/-. In our view, the High Court was right in repelling such a claim by the appellants and rejecting their appeal. That being so, the High Court was also right in directing rateable distribution of that amount amongst the other creditors of respondent 3 who are respondents in the rest of the appeals before us.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]On a reading of this order, there can be no doubt that the application for declaration and adjustment by respondent 2 was in respect of Rs. 40,000/jointly due by her as the principal debtor and respondent 3 as the guarantor and that it was that debt which the said order adjusted in the manner aforesaid, namely, that the amount recoverable by the appellants would be in proportion to the compensation which respondent 2 would get under a claim lodged by her in lieu of the property left by her in PakistanThis statement clearly means that the application was in respect of the amount of Rs. 40,000/under the said decree for which respondents 1 and 2, as the principal debtors and respondent 3, as the surety, were jointly and severally liable. The order then states that the said debt was liable to be "revised and apportioned" under Ss. 21 and 22 of the Act. Lastly, it says that in accordance with the compromise between the parties "it is hereby declared and ordered that Rs. 40,000/are due from the applicant (respondent 2 herein) to Lakhi Ram Ram Dass respondent (the appellants herein) and that respondent will be entitled to recover the sum as first charge from and in proportion of the compensation which the applicant will get on account of the claim preferred by her in respect of her property left in Pakistan"15. That being the position, it would be correct to say that the Tribunals order related to Rs., out of the total decretal amount of Rs. 80,000/in respect of which respondents 2 and 3 were jointly and severally liable. It would further appear from the statement of counsel before the Tribunal that the liability of respondent 3, as the surety for that amount, was not dealt with by the Tribunal, and therefore, remained unaffectedTherefore, the appellants had the right to proceed in execution against respondent 3 in respect of his liability as the surety for. But his liability as such surety wase with the liability of respondents 1 and 2, the principal debtors, and could not exceed their liability18. The position is thus clear that the appellants could not recover any amount from respondent 3 in excess of the amount claimable by them from respondents 1 and 2. No doubt, the Tribunals order had declared the joint debt to be Rs., but it also provided that respondent 2 had to pay that amount in proportion to the compensation which she would receive under her claim in lieu of the property left by her in Pakistan. The amount recoverable from respondent 3 could not exceed that amount by reason of S. 22 (g) as also the principle that the liability of a surety ise with that of the principal debtor. It has not been the case of the appellants during any stage of these proceedings that the compensation payable to respondent 2 has so far been fixed or ascertained. So long as that has not been done, the extent of the liability of respondent 3 as the surety also cannot be fixed. In any event, since the liability of respondent 2, as the principal debtor, has been made payable from out of the compensation recoverable by her and in proportion to such compensation, the Tribunals order has superseded the decree at least as regards Rs. 40,000/payable jointly and severally by respondents 2 and 3 thereunder. That order having provided (1) that the amount recoverable would be in proportion to the compensation, and (2) that it would be recovered from that compensation, the appellant could not claim Rs. 29,000/deposited in the execution court, nor could that court order it to be paid to the appellants. In any case, so long as the compensation due to respondent 2 has not been ascertained, the appellants claim to the said amount of Rs. 29,000/was premature as the liability of respondent 3, if any, could not until then be ascertained. Further, the order of the Ahmedabad court, which on its confirmation by the High Court of Bombay, became final throws another difficulty in the way of the appellants, disabling them from claiming the said sum of Rs.. In our view, the High Court was right in repelling such a claim by the appellants and rejecting their appeal. That being so, the High Court was also right in directing rateable distribution of that amount amongst the other creditors of respondent 3 who are respondents in the rest of the appeals before us.