NITYANAND SAHU Vs. RADHACHARAN SAHU

JUDGEMENT

(1.) This appeal arises out of a suit for contribution which was decreed by the Court of first instance but dismissed on appeal. It appears that the plaintiff and defendants Nos, 1 and 2 jointly executed a hand note for a sum of Rs. 2,000 in favour of defendant No. 3. Defendant No. 3 subsequently brought a suit on the basis of the hand-note and obtained a decree. The entire decretal amount was realised by defendant No. 3 from the plaintiff in three successive execution proceedings. The amount that was realised in the last execution proceeding was Rs. 1121-9-6 and it was in respect of this amount that the suit for contribution was brought inasmuch as the right of the plaintiff to sue for contribution in respect of the balance was time-barred by limitation. The plaint if in the suit claimed a sum of Rs. 1,017-5-8 including interest up to the date of the suit from defendants Nos. 1 and 2 or a sum of Rs. 508-10 from each of them respectively. It was not denied at the trial that a joint hand note had been executed by all the three defendants but a plea was taken on behalf of the defendants that in fact the loan had been taken by the plaintiff himself for his own benefit and that as the defendants were relatives of defendant No. 3, the plaintiff had made a proposal to them to arrange a loan for him from defendant No. 3 after having held out a temptation to these defendants that after receiving the money he would invest it in business and would employ these defendants as his servants.

(2.) The suit, as I have already stated, was decreed by the trial Court, but the lower Appellate Court in dealing with the case took the view that the only points to be determined were these : (1) Whether the loan was taken by the plaintiff alone or by him and defendants Nos. 1 and 2 jointly for their joint business from defendant No. 3. (2) Whether the suit is maintainable. The lower Appellate Court ultimately came to the conclusion that "the loan under the hand-note was taken by the plaintiff alone from defendant No. 3 and that defendants Nos. 1 and 2 cannot be liable under that hand-note for that reason and also for the reason that "the sale proceeds in the business were always appropriated by the plaintiff himself." So far as the second point was concerned, the lower Appellate Court decided it in favour of the plaintiff and held that the suit was maintainable. Then there was a second appeal by the plaintiff, but the appeal has since been dismissed as against defendants Nos. 2 and 3 and we are at present concerned only with the appeal as against defendant No. 1.

(3.) Now, it appears to me that in dealing with the appeal before him the learned Subordinate Judge entirely overlooked the provisions of Section 43 of the Indian Contract Act. That section provides that when two or more persons make a joint promise, the promise may, in the absence of an express agreement to the contrary compel any one or more of such joint promissor to perform the whole of the promise. It then goes on to state that each of the two or more joint promissors may compel every other joint promissor to contribute equally with himself to the performance M the promise, unless a contrary intention appears from the contract. It is the latter provision which appears to me to be directly applicable to the present Case and which the lower Appellate Court seems to have entirely overlooked. It is not disputed that so far as the hand-note is concerned, the plaintiff and the two principal defendants were joint promissors. It is the case of neither party that in the contract by which the plaintiff and the two defendants bound themselves to repay the loan of defendant No. 3 there was any provision to the effect that the plaintiff would not be entitled to compel the other joint promissors to contribute equally with himself to the performance of the promise. It is admitted that under the hand-note, as it stands, the plaintiff as well as defendants Nos. 2 and 3 were jointly and severally liable and in fact a decree was passed in favour of defendant No. 3 against not only the plaintiff but against defendants Nos. 2 and 3 also, that decree being executable not only against the plaintiff but also against defendants Nos. 2 and 3. In these circumstances is appears to me that the Judge of the lower Appellate Court was not called upon to decide at all whether the loan had been taken by the plaintiff alone or by him and defendants Nos. 1 and 2 jointly and he entirely misdirected himself in considering that this was the principal point for determination in the appeal. So far as that point is concerned it is sufficient to say that there was a written contract and a decree passed upon the basis of the contract in view of which the fact that the loan had been taken jointly by the plaintiff and defendants Nos. 1 and 2 should have been taken to be established beyond question. The lower Appellate Court having made that initial error, its finding that the loan under the hand-note was taken by the plaintiff alone and not by defendants Nos. 1 and 2 cannot be binding upon this Court in second appeal. It appears to me, therefore, that under Section 43 of the Indian Contract Act; Use Court had no option but to grant a decree to the plaintiff especially as there was no material before the Court to enable it to come to the finding that under the terms of the contract the entire liability for the money borrowed from defendant No. 3 was to be borne by the plaintiffs alone. Having regard to the explanation appended to Section 43 and Section 132 of the Indian Contract Act, it might be said that it was open to the defendants to prove that they had entered into the contract merely as sureties, the plaintiff being the principal, but the lower Appellate Court does not definitely find that any such case has been established.