RAM JATAN Vs. CHANDRA BALI

JUDGEMENT

(1.) In this case a pronote was executed in favour of the applicant. It was a demand pronote. In answer to the suit thereon the defendants alleged that collaterally to the advance of the money and the execution of the promissory note there had been an agreement whereunder it had, in effect, been agreed that payment would slot be upon demand, but that the sum advanced would be liquidated out of the usufruct of certain plots which were to be handed over by the defendants to the plaintiff. The learned Small Cause Courts Judge has come to the conclusion that the consideration of the pronote has been discharged out of the usufruct of the plots which were put in possession of the plaintiff for three years.

(2.) The learned counsel for the applicant has urged before me that oral evidence in respect of the collateral agreement was inadmissible, because the effect o admitting that evidence is that the terms of the pronote, which is the basis of the suit, would stand varied. Before I deal with this argument I must point out that this is not a case where the plaintiff is suing upon the promissory note and the defendants are alleging that by a collateral agreement the promissory note could only be satisfied in a particular way. This is a case in which the plaintiff is suing upon the promissory note and the defendants have pet up the defence that they have already satisfied the promissory note in the way agreed upon by the collateral agreement. It is therefore not a case where by setting up the plea of a collateral arrangement the defendants are seeking to evade liability under and in accordance with the promissory note but this is a case where they are explaining how the liability came to be discharged. "There is a difference in the two positions. It is true that inter alia under Section 92 of the Evidence Act, save and except as provided by proviso (3), no oral evidence contradicting, varying, adding to or subtracting from the terms of a written contract is admissible. Thus it has been held that an oral agreement that the note was not to be enforced unless an incumbranca on property was discharged was not within proviso (3) of Section 92 of the Act as it would alter the legal effect of the instrument--See Vishnuram v. Ganesh, ILR 45 Bom 1155: (AIR 1921 Bom 449).

(3.) It is true that proviso (3) clearly presupposes that the contract, grant or disposition itself remains intact and if the condition pleaded nullifies entirely the effect of the instrument, the proviso cannot apply. Thug an oral agreement that a pronote was not to be enforced but that its amount was to be adjusted in the making up of partnership accounts cannot be proved as it entirely nullifies the pronote--See Chhaganlal v. Jagjiwandas, AIR 1940 Bom 54.