JOHN Vs. VARGHESE

JUDGEMENT

(1.) AS already mentioned the 12th instalment for payment fell due on 30/1/1122. Two previous instalments were already in default. On 29/1/1122 the appellant sent a cheque for Rs. 136-12-0 to the decree-holder together with a covering letter intimating him that the cheque was in lieu of the amount for the 10th instalment and that the banker's commission was also included in it. The decree-holder was asked to acknowledge receipt of the same and certify the payment in court. In the ordinary course the cheque would have reached the decree-holder the next day, but he got it actually only on 3. 2. 1122. The cheque was got cashed on 4. 2. 1122, but no acknowledgment would seem to have been given to the judgment debtor nor was any certification made to the court. There is no dispute however that the proceeds of the cheque were not sufficient to cover the amount due on the 10th instalment as also the commission on the cheque. On 4. 6. 1122 the decree-holder filed the execution petition giving rise to the present appeal alleging that the judgment-debtor has forfeited his right to the benefit of the Debt Relief Act by reason of default having been made for three consecutive instalments, namely, 10th, 11th and 12th instalments. The execution petition further stated that the amount received as per the cheque sent on 29. 1. 1122 has been credited towards the decree-debt. On notice being given about this execution application the present appellant field written objections contending inter alia that the payment as per the cheque dated 29. 1. 1122 was made specifically towards the 10th instalment which was overdue and that the decree-holder's conduct in cashing the cheque (assuming it was received late) showed that it was accepted towards that specific instalment and that he cannot now be heard to say that it was a receipt towards account generally. The appellant's case is that the decree-holder had no right to take the money except on the terms on which it was paid and his conduct in cashing the cheque was clear evidence of his having accepted the terms of the covering letter. According to the appellant there was therefore a clear case of waiver of the right to enforce payment of the balance decree-debt without reference to the provisions of the Debt Relief Act. The lower court gave its decision against the appellant without considering this question of waiver and it is for us now to decide whether the appellant's plea can be sustained on the materials existing on the records of the case.

(2.) THE question whether a subsequent payment and acceptance of an overdue instalment would amount to waiver has been the subject of a large number of decisions in the Indian High Courts in connection with instalment bonds and instalment decrees with the usual default clause. THE law on the point is, if we may say so, correctly set out in Volume II of Rustomji's law of Limitation page 807 (5th Edition, 1938) as follows: "the law now appears to be that such payment and acceptance (a subsequent payment and acceptance of an overdue instalment) is sufficient evidence of waiver, but the payment must be on account of the specific instalment in arrear, and not a mere part payment in reduction of the whole debt (i. e. a mere payment on account generally will not suffice ). When it is sought to establish waiver by payment of an overdue instalment it is not necessary that the creditor should expressly say that he waives the forfeiture. It is sufficient if from the amount paid and accepted, and the circumstances attending the payment and the conduct of the parties, an intention to set up the bond (notwithstanding the default) as one payable by instalments is unequivocally indicated. "

(3.) THE view of the Lahore High Court is seen set out in a decision by Jai Lal, J. reported as Gopal Mal v. Gopal Singh (A. I. R.) 1928 lahore 378. THE head-note to that case which correctly sets out the sense of the decision is in these terms: "it is open to the decree-holder to expressly state when accepting the instalment that he does so without prejudice to his rights which have already accrued owing to the default or to show by his conduct at the time of accepting the instalment that he does not waive his rights under the default clause. But in the absence of proof to the contrary tender by the debtor and acceptance by the creditor of an overdue instalment must be deemed to amount to a waiver and condonation of the default". We are not unaware that criticism has been made in certain quarters that the law has been too broadly stated by the learned Judge. In Gokhul Mahton v. Sheoprasad (A. I. R.) 1939 Patna 433 at pp. 440 - 441 of the report Manohar Lall, J. one of the judges constituting the Full Bench observed: "the weighty observations of Lord Denman and Fry, J. quoted in the Order of Reference correctly indicate how this question should be determined. It is there laid down that mere failure to sue or inaction by the creditor is not a waiver of the default, something also must be established to show that the promisee has waived his rights. For instance his acceptance of an overdue instalment or his communicating to the promisor for a consideration that he will not insist upon his rights which have already accrued to him on the default which has taken place, or, it may be that the promisor himself approached the promisee or writes to him to stay his hands and not to proceed to demand the full amount and if the promisee agrees to such request, these will ordinarily amount to a waiver, In such cases, it is clear that some overt act has been established from which the court of fact can draw the conclusion that the obligee has waived the default. In some cases it will be easy to decide this question by looking at the frame of the suit and to find from the plaint the manner in which the allegations have been made. When the plaintiff alleges, for instance that all the previous instalments have been paid he proceeds on the footing that there has been no default and no waiver, and if his allegations are, in the course of the trial, found to be false, in my opinion, it is not open to the promisee to turn round and ask the Court to infer any waiver. Some High courts have held that a mere acceptance of an overdue instalment cannot be treated as wavier of the default in the view that the promisee is merely taking what was due to him. But the Calcutta High Court has consistently held that an acceptance of an overdue instalment amounts in law to a wavier of the default. As this High Court has adopted the view that where there is a cursus curia of the Calcutta High Court they will ordinarily adopt the same as a rule of law binding upon this Court. I am inclined to agree with the view that where the promisee has accepted an overdue instalment it must be held that he has waived his rights which accrued to him on that default and that the starting point of limitation would be from the next default, if not waived". THE view contained in the above extract has been cited with approval and followed by Padhye, J. in Regunathdas Madangopal Bhangade shop v. Warlu Bapu Maral (A. I. R.) 1948 Nagpur 225. THE learned judge quotes a portion of the above extract in his judgment and concludes his discussion by formulating the points which appeared to him to be well-established. Among points (a) to (e), points (a) and (c) are alone of assistance to us and we quote them here: (a) That the exigibility clause in an instalment is for the benefit of the creditor and he has a right to waive that benefit even in the absence of a fresh agreement, a fresh consideration or a fresh bilateral arrangement. (b ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) THE payment by the debtor and the acceptance by the creditor specifically made towards the satisfaction of a particular defaulted instalment would amount to a waiver of that default and of the benefit arising out of that default. (d) (e)