AMAR CHAND versus BHANO AND ANR.

Citation: [1994] SUPP. 6 S.C.R. 252 · Decided: 01-12-1994 · Supreme Court of India · Bench: K. RAMASWAMY, N. VENKATACHALA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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AMAR CHAND 
v. 
BHANO AND ANR. 
DECEMBER 1, 1994 
[K. RAMASWAMY AND N. VENKA TACHALA, JJ.] 
Code of Civil Procedure, 1908 : 
Sections 47, 145 and Order 21: 
Surety for a certain sum including mesne profits~ompromise 
between decree-holder and principal judgement debtor without reference to 
surety- Whether mesne profits could be recovered from the surety-Held: 
No. 
The appellant had undertaken as a surety on behalf of the 
defendant for a sum of Rs.10,000 including mesne profits payable by 
the defendant to the decree-holder. Subsequently the decree holder 
compromised with the principal judgement debtor and a compromise 
was recorded without reference to the surety. 
In this appeal, the appellant raised the question as to whether the 
amount undertaken by him towards mesne profits as surety could be 
recovered from him. 
Allowing the appeal, this Court 
HELD: 1.1. A conjoint reading of the clause under S.145 C. P. C. 
do clearly indicate that when a person has undertaken as a guarantor 
or a surety for the due performance of a decree or any part thereof, to 
the extent of the undertaking or guarantee, the guarantor or the surety 
is personally liable for due performance of the liability of the 
judgement debtor to 'the decree holder and the later is entitled to 
proceed against him in the Qlanner laid down in s.145~ But when the 
decree holder himself had comprised with the principal debtor and had 
discharged himself from the liability to the performance of the decree, 
in law it must be a full satisfaction of the decree under section 47 and 
the relevant rule in order 21 CPC. Thus it relieves the guarantor or 
surety from the obligation with the decree holder and the decree holder 
cannot seek any further remedy against the surety. [254 A to DJ 
252 
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AMAR CHAND v. BHANO 
253 
1.2. The liability of the guarantor or surety is co-extensive with the A 
judgement debtor. The compromise entered by the decree holder binds 
himself by his conduct and releas~s the guarantor or surety from the 
liability undertaken in the guarantee or surety bond for due 
performance of the decree. In ·case the compromise was with the 
consent of the guarantor or surety compromise with the principal 
judgement debtor is for other liability other than the extent of the B 
liability undertaken by the guarantor or surety, in that event the 
guarantor or surety is not relieved from his liability for due 
performance of the decree. [254 E] . 
1.3. In the instant case, the compromise was without reference to 
the appellant. The appellant must be deemed to be relieved from the C 
liability from surety bond and the decree holder no longer is entitled to 
proceed against the appellant to recover Rs. 10,000 from the appellant. 
[254 F] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9225 of 
1~4. 
D 
From the Judgment and Order dated 29-1-90 of the Punjab and 
Haryana High Court in C.R. No. 3040of1989. 
Anant Palli and E. C. Agarwala forthe Appellant 
The following Order of the Court was delivered 
L~!ive granted. 
E 
Though the respondents have been served, they are not appearing 
either in person or through counsel. We have heard the counsel for the 
appellant. Admittedly, the appellant had undertaken as a surety, on behalf F 
of the defendant Dia Singh, for the due performance of the decree for a sum 
of Rs. I 0,000 including mesne profits payable by Dia Singh to the Decree 
holder. By the subsequent conduct, the decree holder compromised with the 
principal judgement-debtor and a compromise was recorded in that behalf 
without reference to the surety. 
G 
The question, therefore, is whether the amount undertaken by the 
appellant towards mesne profits as surety could be recovered from him. 
Section 145 ofC. P. C. provides thus: 
"Where any person has furnished security or given a 
guarantee 
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254 
SUPREME COURT REPORTS 
[1994] SUPP. 6 S.C.R 
(a) for the performance of any decree or any part thereof ..... . 
the decree or order may be executed in the manner herein 
provided for the execution of the decrees, namely, 
(i) if he has rendered himself personally liable, against him to 
that extent.... and such person shall be deemed to be a party 
within meaning of section 4 7." 
A conjoint reading these clause do clearly indicate that when a person 
has undertaken as a guarantor or a surety for the due performance of a 
decree or any part thereof, to the extent of the undertaking or guarantee, t
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