ISMAIL BHAI RAHIM Vs. ADAM OSMAN

JUDGEMENT

(1.) This case raises points of considerable interest, though the amount at stake, apart from the question of the costs of the litigation, is a trifling one. The plaintiffs are executor and executrix of the will of Ibrahim Alia Rukhea Rahim, deceased. On 11 May 1935, Rahim advanced a sum of Rs. 2500 to the defendants. The advance was covered by a hatchita, and the defendants promised to pay interest at the rate of 7 annas per cent, per month until realization. Rahim died on 4 July 1935. Before probate of his will was obtained, Bahim's widow instituted the present suit and the executor joined with her as co-plaintiff. At the date of the institution of the suit, that is to say on 5 May 1936, the interest on the advance amounted to Rs. 130-2-6. Accordingly the sum claimed was Rs. 2630-2-6 with interest and costs. In the written statement the defendants plead that the plaintiffs wrongfully refused to accept payment of the sum, which was properly due to them on several occasions prior to the institution of the suit, and that, in particular, payment was not accepted on or about 15th August 1935 of the amount properly due on the basis of the loan, namely Rs. 2500 on account of principal and Rs. 35 on account of interest calculated up to the aforesaid date aggregating Rupees 2535 although offered by the defendants. This sum was paid into Court on 4 June 1936. Consequently, what I have to decide is whether the plaintiffs are entitled to Rupees 90 over and above the amount paid into Court. Although a tender is not alleged and although the language of Section 38, Contract Act, is not adopted in the written statement, the defence really is that the defendants on 15 August 1935 made an offer of performance to the plaintiff's which was not accepted and that therefore the defendants are not responsible for the non-performance of the promise to pay. The facts are as follows : On 15 August 1935 the defendants attorneys wrote two letters one addressed to the widow of Rahim and the other to his heirs. Both the letters contain the following passage: Our clients are ready and willing and hereby offer to repay the said sum of Rupees 2500 with interest up to date to the proper legal representative of the said Ismail Bhai Kahiru. Will you please let us know whether any representation of his estate has been taken from the Court, and the names and addresses of such representatives to enable our client to repay the said sum with interest. We are also instructed to give you notice that our clients are not liable to pay any interest on the said sum of Rs. 2500 from today.

(2.) Apparently, no answer was received by the defendants attorneys from the addressees. The passages which I have read are the offer on which the defendants rely as excusing them from the liability to perform the contract to repay with interest. I will assume for the purposes of the case that either the widow or the heirs did, on 15 August 1935, stand in the shoes of the original promisee, and I will also assume that the defendants were in a position to implement the offer made by their attorneys. It cannot be argued that there was any tender of the amount due in the sense in which that term is used in English law. Mr. Chaudhury for the defendants points out that Section 38 says nothing about tender, and that all that the promisor has to do under this Section is to make an offer of performance. Pie argues that the principle underlying the English law as to tender is that the promisor must perform his promise as far as the circumstances permit him to do so; that is to say a person who has made a promise to pay must tender the actual money in the form in which the promisee is legally entitled to demand it, and the circumstances must be such that the only thing which prevents the discharge of the contract by performance is the refusal of the promise to accept performance.

(3.) I am inclined to agree with Mr. Chaudhury that in construing Section 38, Contract Act, one should endeavour to keep one's mind clear of pre-possessions arising from familiarity with the English rules as to tender. It is true that the distinguished authors of Pollock and Mulla on the Indian Contract Act at page 272 of Edn. 6 state that a tender of money in payment must be made with an actual production of the money. For that proposition, they rely on Veerayya v. Sivayya (1915) 2 A.I.R. Mad. 546. It is difficult from the extremely-compressed report of that case to ascertain what the facts were, but I am inclined to think that in the contract, which the Court was considering, there was an express obligation to tender. If that were so, the English rules as to tender would apply, not by virtue of the provisions of the Indian Contract Act, but by virtue of the agreement of the parties. It must be observed however that under Section 38 the offer of performance must fulfil certain conditions. The second condition is as follows: It must be made at a proper time and place, and under such circumstances that the person to whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is made is able and willing there and then to do the whole of what he is bound by his promise to do.