VEERCHAND DEVICHAND TELI Vs. KASHIBAI PUNAMCHANDJI SALVI

JUDGEMENT

(1.) THIS is a revision petition by a surety who claims to be discharged from his obligation under the surety -bond on the ground that the creditor had given time to the principal -debtor without reference to him. He seeks to rely on section 135 of the Contract Act. The facts are that the principal debtor Gendalal took on 24 -11 -1957 a flour mill on lease from Kashibai at Rs. 45 p. m. and her house at Rs. 25 p. m. He also promised to pay electric and other incidental charges. Petitioner Veerchand stood surety on the same date for payment of this rent. Each of them executed a separate document in her favour. The principal debtor i. e. Gendalal failed to pay the rent which fell in arrears. On 15 -5 -1958 the rent account was made and settled. As per this settlement Rs. 520 -29 nP. were found due from him. Gendalal promised to pay this within a week and on his failure to do so he agreed that the amount might be recovered out of his movable and immovable property and from his surety. To this agreement surety was not a party. The principal debtor Gendalal defaulted and failed to pay within a week as he had agreed. The creditor Kashibai thereupon sued both the principal debtor and the surety for the arrears covered by the later agreement. The Courts below held both the principal debtor and surety liable. Section 135 was held inapplicable on the ground that the later agreement agreeing to give one week's time was a nudum pactum as it was without consideration.. The same was, therefore, held to be not binding upon the creditor. Reliance in this connection was placed upon the decision in Damodar Das v. Muhammad Hussain, ILR 22 All. 351, by the lower appellate Court. The counsel for the respondent in addition to the above decision cited the decision in Sonepat Co -operative Society v. Kapuri Lal : AIR 1936 Lah. 305. It is contended before us that the authority of the decision in Damodar Das v. Muhammad Hussain, ILR 22 All. 351 is considerably shaken by the decision of the Privy Council in Chhunna Mal v. Mool Chand, 55 IA 154 and that in view of the terms of section 63 of the Contract Act and agreement to give time does not require any consideration. Their Lordships observed: -

(2.) IN Abaji Sitarum Modak v. Trimbak Municipality, ILR 28 Bom. 66, Chief Justice Jenkins deals with section 63, and holds that, the premises mentioned in section 63 can only do the acts ho is by that section empowered to do, if there be an agreement as defined by section 2(e) amongst the parties to that, effect. At page 72 of the report of this case the learned Judge is reported to have expressed himself thus : - Therefore, we hold that, assuming that there was a legal resolution, and that it was communicated as alleged, still, inasmuch as a dispensation or remission under section 63 requires an agreement or contract, the resolution wag of no legal effect since the provisions of section 30, Bombay Act 2, 1884, have not been observed. With this their Lordships are unable to agree. The language of the section docs not refer to any such agreement and ought not to be enlarged by any implication of English doctrines. The question for consideration is whether the above quoted observations of the Privy Council are calculated to overrule the opinion expressed in Damodar Das v. Muhammad, Hussain, ILR 22 All. 351, Sonepat Co -operative Society v. Kapuri Lal : AIR 1936 Lah. 305. In order to appreciate the appellant's contention on this question it will be necessary to refer to the provisions of sections 2 (d), (e), (h), 63 and 135 of the Contract Act. Section 2 (d), (e) and (It): - (d) When, at the desire of the promisor, the promissee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing something, such act or abstinence or premise is called a consideration for the promise. (e) Every promise and every set of promises, forming the consideration for each other, is an agreement. (h) An agreement enforceable by law is a contract. Section 63: -Every promissee may dispense with or remit, wholly or in part, the performance; of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit. Section 135: - A contract between the creditor and the principal -debtor, by which the creditor makes a composition with, or promises to give time to, or not to sue, the principal debtor discharges the surety, unless the surety assents to such contract.