KAUSHILLA DEBI Vs. LACHHMI NARAIN

JUDGEMENT

(1.) This is a creditor's appeal under the Encumbered Estates Act. The creditor, after the application was filed and referred to the special Judge, filed his claim on the basis of a mortgage dated 1 May 1930 which was to secure a sum of RS. 9000. He claimed double the amount that is Rs. 18,000. On behalf of the landlord- applicant an objection was made that in a suit which the creditor had filed on 22nd April 1936 he had claimed only Rs. 12,953-4 0 and therefore he could not claim any enhanced amount. The learned Special Judge came to the conclusion that the creditor having once claimed a lesser amount he was bound by it and could not go beyond it. We have heard the learned Counsel for the parties and, in our opinion, the reasoning of the learned Special Judge is not well founded. It is no doubt true that when the suit was brought on the mortgage the creditor had claimed a lesser amount, but in our opinion there was nothing to prevent him claiming a higher amount when an application under the Encumbered Estates Act was presented and he was called upon to present his claim. On behalf of the respondents it has been argued that Order 2, Rule 2, Civil P.C., would be applicable and that the giving up of a part of the claim would amount to a waiver. In our opinion none of these pleas have got any force. The proceedings under the Encumbered Estates Act are provided by a special Act and if a claim is made for the very same amount, Order 2, Rule 2 would not be applicable. By parity of reasoning that order and rule would not be applicable even, when a higher amount is claimed. It cannot also be a case of waiver because there was no agreement and there was no act to which the other party had consented or on account of which one party had changed his position. It was only a proposal when the suit was filed that in those circumstances the creditor was willing to give up a part of his claim. That suit was not allowed to proceed further and was stayed under the Encumbered Estates Act. Under the Encumbered Estates Act the creditor was asked to file a fresh claim and he was certainly entitled to lay a claim up to the amount that was allowed by that Act. In our opinion the decree passed by the learned Special Judge was incorrect. The appeal is accordingly allowed and the decree in favour of the creditor is allowed for a sum of Rs. 18,000 together with pendente lite and future interest at Rs. 4-4-0 per cent, per annum from the date of the application, namely 23 July 1936. The appellant shall get her costs from the respondents in this appeal. Malik, J.

(2.) I entirely agree with my brother <JGN>Mathur</JGN> that this appeal must be allowed. The mortgage in favour of the plaintiff dated 1 May 1930 was for a sum of Rs. 9000 and it carried interest at 1 1/4 per cent, per mensem. But the plaintiff could not claim interest at a rate higher than provided for in the Agriculturists Relief Act. The plaintiff, therefore, was bound to limit his claim to Rs. 12,953-4-0. It cannot, therefore, be argued that in claiming only RS. 12,953-4-0 the plaintiff was relinquishing any portion of his claim. When the defendant applied under the Encumbered Estates Act, by reason of the provisions of Section 14, Sub-section (4), Clause (c), which laid down that the provisions of the United Provinces Agriculturists Relief Act, 1934, shall not be applicable to proceedings under this Act, the plaintiff became entitled to claim interest at the rate provided in the mortgage deed, the only limitation on his rights being under Section 14 (4)(a), that he could not claim more than double the amount of the principal due on the date of the application, and that the interest claimed by him could be modified by the learned Special Judge under the Usurious Loans Act 1918. Therefore when the plaintiff put in his claim before the learned Special Judge he was under the Encumbered Estates Act entitled to claim the amount that he did.

(3.) The defendant relies on what he calls the doctrine of waiver, and he urges that the plaintiff must be deemed to have waived the rest of the amount over and above the amount claimed by him in suit No. 11 of 4936.1 do not see how any question of waiver comes in. A waiver must have all the essentials of a valid contract between the parties. A discharge by waiver requires either mutual abandonment of claims or else a new consideration of claims or else a new consideration for the waiver. The learned Counsel for the respondent then relies on Section 63, Contract Act, 9 of 1872, and urges that the plaintiff must be deemed to have dispensed with or remitted that part of the performance of the promise made to him which he omitted to claim in the suit. I do not see how Section 63, Contract Act, is applicable. When the plaintiff claimed the sum of Rs. 12,000 and odd if the defendant had paid off this sum in full satisfaction and the mortgage had been deemed to have been satisfied, it may be that the plaintiff would not have had any right to claim the balance in the proceedings under the Encumbered Estates Act, but the matter never came to that stage and all that had happened in the case was that the plaintiff had claimed only such sum as he was entitled to claim on that date, but the defendant never paid the amount claimed and started other proceedings by reason of which the plaintiff was able to claim a larger sum. In England both parties are competent in an executory contract to discharge the obligation by mutual agreement, the reciprocal discharges being consideration for each other, but an executed contract cannot be discharged except by release under seal or by performance. It has been held that a less sum of money cannot be good satisfaction for a greater sum already due : see the ease in J.W. Foakes V/s. Julia Beer (1884) 9 A.C. 605. The law in India is, different in this respect from the law in England. Their Lordships of the Judicial Committee in Chunna Mal Ram Nath V/s. Mool Chand Ram Bhagat ( 28) 15 A.I.R. 1928 P.C. 99 held that a promisee can effectually dispense with the performance of a contract, in whole or in part, without either an agreement by the promisor, or consideration for the dispensation. In this case I can find nothing in the conduct of the plaintiff which can be said to amount to a dispensation by him of the performance of the contract in part. To my mind, Section 63 Contract Act, has no application.