SUDHENDU MOHAN BAGCHI Vs. KHITISH CHUNDER DASS GUPTA

JUDGEMENT

(1.) This is an unfortunate type of action from the point of view of the pleadings. It is brought before the Court as if it were a suit upon two bare promissory notes, claiming principal and interest for money lent. In point of fact there are a number of very material circumstances between the parties which have never been pleaded at all. I find the facts as follows: The plaintiff and the defendant were old friends. The plaintiff was a man in better financial circumstances than the defendant. From time to time out of friendship he appears to have assisted him in his monetary difficulties. For example, on some date before the year 1927, he lent him three sums of money amounting to Rs. 1,800. For that loan the defendant signed a promissory note. In addition, the defendant was apparently in trouble with the Bengal National Bank who were pressing him for a debt. The Bank consented to take a certain form of security from him. That was a hundi drawn by the defendant upon the plaintiff and handed to the Bank. I may say here by way of parenthesis that it was not until the end of the hearing that this description of the security reached me. I missed it in the cross-examination of the plaintiff, and I was unaware that the form of security given by the plaintiff to the Bank was not in the form with which we are all so familiar, namely an indemnity bond, and it was rather on the lines that it was indemnity bond (and in an indemnity bond there are certain legal vrights accruing both to the principal creditor and the guarantor), that most of the arguments on this particular phase of the case was addressed to me. Well, after the hundi was handed to the Bank, apparently the defendant took no steps to liquidate or diminish his indebtedness, and an action was brought by the Bank against both the plaintiff and the defendant on the hundi. The.defendant being a man of straw, the Bank made the plaintiff liable and the plaintiff undertook to make his payments to the Bank under the hundi by a series of instalment payments which even now have not yet been completed. Shortly after this action taken by the Bank, the defendant took the benefit of the Act. He became insolvent in 1927 and was discharged from insolvency in 1930.

(2.) After his discharge he again went to his old friend the plaintiff and according to the evidence he received various help from him. The plaintiff, for example, gave him meals in his house. He also took him round to various business firms, and endeavoured to get him some position of employment, and the plaintiff says that in addition to rendering him this assistance, he made him again 3 small cash loans. I may say at once that I do not accept this story of three small cash loans, although I accept the account of the other assistance. After that the defendant signed two new promissory notes, one dated August 5, 1930, for Rs. 2,800 and the other which is dated August 20, for another Rs. 2,800 in the year 1930; and it is said that the first promissory note for Rs. 2,800 was a fresh contract between the plaintiff and the defendant for Rs. 1,800 On the original handnote together with the new cash loans of Rs. 500, balance being made up of a calculated sum as to interest. The other promissory note for Rs. 1,800, it was agreed was the equivalent of a fresh contract for the indebtedness over the hundi which was handed to the Bank.

(3.) It is contended on behalf of the plaintiff that these two promissory notes amounts to two fresh promises and two fresh considerations which make the defendant liable, having regard to his earlier indebtedness before the bankruptcy took place. There is no doubt that authority can be found for this type of transaction. The leading decision which has been cited and approved of on several occasions is the case of Bateman V/s. Crook (1849) 4 Ex. D. 26. That was a case where an insolvent in England made a fresh agreement with his butcher who had proved for a small sum in bankruptcy to discharge this unenforceable debt for the consideration that he and his family should be supplied with meat and provisions during some months ahead. It was held there that it was quite open to the debtor once he obtained Lis discharge, to enter into this type of fresh agreement, and Baron Kelly in the course of his judgment said: The debtor says that he went to Ms creditor and said, if you supply me with, food on credit, I will pay you the old debt. Is not that a good consideration? I think,it is. The ccntiact ii one of great benefit, not only to the creditor but to the debtor, and there is nothing in Section 49 of the Bankruptcy Act which is the discharging section, to prevent such an action being enforced.