BABULAL MARWARI Vs. TULSI SINGH

JUDGEMENT

(1.) This is an appeal by the plaintiffs against the decision of the learned Subordinate Judge of Bhagalpur by which he dismissed the suit of the plaintiffs which was instituted to recover a sum of Rs. 12,646 due on a rokka on the ground that there has been a novation of the contract sued upon and that the suit was, therefore, not maintainable. The facts may be briefly stated. On 30 April 1929 the defendants executed a registered handnote in favour of the plaintiffs for a sum of Rs. 9000 promising to pay interest at 12 annas per cent, per mensem. Two payments were made by the defendants, one Rs. 600 on 16 June 1931 and the other Rs. 368 on 9 June 1932.

(2.) In or about April 1935 the plaintiffs were ready to institute a suit to recover their dues on the rokka when, the case of the defendants, is they implored and entreated the plaintiffs and made them agree to an adjustment of account by arriving at a figure of Rs. 13,300 in full discharge of the remaining liability under the rokka of April 1929. The agreement was that Rs. 500 should be paid in cash on 27 April 1935 by tendering it on that very date and that a mortgage instalment bond for Rs. 12,800 should be executed and registered on that very day, the interest to run at 11 annas per mensem. The bond also provided for default clauses in case the instalments fixed thereby were not paid within time. Certain property was given in security for the payment of the debt as stated in para. 8 of the mortgage bond. There was a covenant of title with these terms added: Having given assurances on these points the said creditor consented to have this bond executed by us. If anything to the contrary comes to light, we the executants Nos. 1 and 2 shall be severally and jointly liable to criminal prosecution for cheating and fraud and in that case the said creditor shall be competent to cancel the instalments and institute a suit for this entire amount without paying any regard to the instalments.

(3.) The plaintiff gives details in the plaint that defendant 1 acted fraudulently and made a number of misrepresentations with a view to induce the plaintiffs to enter into the agreement and take the mortgage bond from which quotations have been given above. In particular they asserted that the mortgagors had no title to give the property in security and that the defendants did not pay Rs. 500 in cash to the plaintiff which was a condition precedent for entering into the new agreement. In other words they repudiated that there was a novation of the original contract of rokka by the execution of the mortgage bond in question and instituted the present suit within two months of the date of the execution of the mortgage bond. The defendants admitted the passing of consideration of the rokka and that the loan was for legal necessity. The amount claimed in the suit was also admitted to be due, if the suit could be maintainable upon the rokka.