RAJARAM Vs. NARAIN

JUDGEMENT

(1.) IN consideration of a loan of Rs. 1,840-12-0 the defendants executed an unregistered bond on the 28th of February 1915 in favour of the plaintiffs, promising to pay them Rs. 150 annually for fourteen years and Rupees 200-15-0 in the fifteenth year. A remarkable though apparently irrelevant circumstance in the case is that if the payments had been made regularly the plaintiffs would have got their money back with compound interest at something less than one per cent per annum. It was agreed that the whole amount of Rs. 2,300-15-0 should be payable at once on default being made in the payment of any three instalments. No payment at all was ever made, and the third instalment fell due on the 7th of March 1917, so that on that date the plaintiff's became entitled to sue for the whole Rs. 2,300-15-0. In the present suit they claimed to recover the amounts of the seventh, eight and ninth instalments, of which the earliest fell due on the 21st of May 1921. The suit was filed on the 16th of June 1924, but by reason of the Courts re-opening on that day after the summer vacation it has to be regarded as filed on the 6th of May of that year.

(2.) IN the first Court it was held that the plaintiffs had waived their right to recover the whole amount at once which first accrued to them in March 1917, and therefore the suit to recover the instalments was in time. In appeal the learned District Judge held that there was no waiver and the suit was barred by time. Against this decision the plaintiffs have appealed. It seems fairly obvious, though it was not seen in either of the two lower Courts, that in a suit to recover instalments, that is a suit to enforce the primary contract, there could be no question of the waiver of the right to recover the whole sum at once, which is a penalty for the breach of that primary contract of the kind mentioned in Section 74 of the Contract Act.

(3.) THE plaintiffs sue to enforce a contract, -or rather three separate contracts, to pay them Rs. 150 in each of the years 1921, 1922 and 1923. The defendants had made a promise such as is mentioned in Section 74 of the Contract Act in respect of those three contracts, and also in respect of their other contracts to pay the same sum in each of certain previous years, but that cannot possibly have an effect or their liability, to carry out those three contracts provided the claim in respect of them is made in time. " It is conceivable," as was said in Ajudhia v. Kunjal [1908] 30 All. 123 "that a bond might be so worded as to compel a creditor to sue for the whole amount immediately if any default occurred." In such a case the original agreement to pay by instalments would cease to exist when the default occurred and the agreement to pay the whole sum would be substituted for it. Here, however, the substitution of the new contact for the original one is at the option of the creditor, who has not chosen to exercise it.