SHEO PRASAD LAL Vs. TAPESHWAR MAHTO

JUDGEMENT

(1.) This is an appeal by the decree-holders against a decision of the Judicial Commissioner of Chota Nagpur confirming a decision of the Additional Subordinate Judge of Hazaribagh and dismissing an execution case. In a suit by the decree- holders based upon a mortgage there had been a final decree for Rs. 4,267. Certain of the defendants sued for a declaration that the mortgage decree had been fraudulently obtained. The suit was compromised and a compromise decree was passed as against those defendants to the effect that if the defendants paid a total sum of Rs. 2,700 in three yearly instalments of Rs. 900 that the whole decree should be deemed to have been satisfied.

(2.) The defendants duly paid the first two instalments but as to the third they paid Rs. 550 before it was due but failed to pay the balance of Rs. 350 by the due date. They nevertheless deposited that sum in Court 16 days after the due date. The decree-holders sought to execute that term of the compromise decree which stated that if there should be failure in the payment of the instalments the amount of the original decree should be recoverable. The lower Courts have held that "time was not of the essence of the contract" and relying upon two authorities namely Mt. Nand Rani Kuer V/s. Durgadass Narain and Kandarpa Nag V/s. Banwari Lal Nag AIR 1921 Cal 356, held that the conditions of the compromise decree had substantially been fulfilled.

(3.) In my opinion the view of the lower Courts is erroneous. It has long been held and notably in the case of Kandarpa Nag V/s. Banwari Lal Nag AIR 1921 Cal 356, relied on by the defendant, that a compromise decree cannot extend further than the terms of the compromise itself and that if the compromise involved a clause of penalty or forfeiture that the Court notwithstanding the decree in the terms of the compromise retains the power to grant equitable relief against such penalty or forfeiture. This is no doubt true but the question here is not one of whether time was of the essence of the contract, but of whether it is a case of forfeiture against which equitable relief could be claimed.