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Chandrasekhara Hebbar Vs. Vittala Bhandari - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKarnataka High Court
Decided On
Case NumberCivil Revn. Petn. No. 1063 of 1963
Judge
Reported inAIR1966Kant84; AIR1966Mys84; (1965)2MysLJ338
ActsIndian Contract Act - Sections 41
AppellantChandrasekhara Hebbar
RespondentVittala Bhandari
Excerpt:
.....urged that even the finding of the civil judge was that there was no novatio and that therefore the liability of defendant 1 had not been destroyed by any substitution of the liability of defendant 1 and that the plaintiff was therefore entitled to a decree against defendant 1 in addition to a decree against defendant 2. (5) before the civil judge, the advocate appearing for defendant 1 made the concession that the plaintiff's suit against defendant 1 could not fail by reason of any novatio and that what displaces the claim is what is contained in s. 70 of air): in their lordships' opinion section 41 of the indian contract act, upon which the high court relied, has no application to a case like the present......from the decree dismissing the plaintiff's suit against defendant 2, the plaintiff appealed. the civil judge who heard those appeals dismissed the plaintiff's suit against defendant i, but made a decree against defendant 2.(3) the plaintiff who is dissatisfied with the dismissal of the suit against defendant i is the petitioner before me.(4) mr. ramanathan, the learned advocate for the plaintiff, urged that even the finding of the civil judge was that there was no novatio and that therefore the liability of defendant 1 had not been destroyed by any substitution of the liability of defendant 1 and that the plaintiff was therefore entitled to a decree against defendant 1 in addition to a decree against defendant 2.(5) before the civil judge, the advocate appearing for defendant 1 made.....
Judgment:
ORDER

(1) On April 2, 1959 there was an agreement between the plaintiff and defendant 1 that a certain quantity of timber should be supplied by the plaintiff to defendant 1 for Rupees 7,600. It is not disputed that on August 7, 1959 there was an assignment of the benefit of the contract by defendant 1 in favour of defendant 2. Defendant 2 received from the plaintiff the timber which had to be supplied to defendant 1, and by then the plaintiff had already received from defendant 1 a sum of Rs. 1,600 and from defendant 2 a sum of Rs. 5,500. The balance which was still due to the plaintiff under the agreement was Rs. 500.

(2) Since no one among the defendants paid the balance of purchase-money, the plaintiff brought a suit on December 20, 1960 for the recovery of a sum of Rs. 550 consisting of Rupees 500 which was the balance of the price, and, a sum of Rs. 50 which represented the interest from January 15, 1960 to October 15, 1960. The Munsiff gave the plaintiff the decree which he wanted against defendant I and from that decree defendant I preferred an appeal, and from the decree dismissing the plaintiff's suit against defendant 2, the plaintiff appealed. The Civil Judge who heard those appeals dismissed the plaintiff's suit against defendant I, but made a decree against defendant 2.

(3) The plaintiff who is dissatisfied with the dismissal of the suit against defendant I is the petitioner before me.

(4) Mr. Ramanathan, the learned Advocate for the plaintiff, urged that even the finding of the Civil Judge was that there was no novatio and that therefore the liability of defendant 1 had not been destroyed by any substitution of the liability of defendant 1 and that the plaintiff was therefore entitled to a decree against defendant 1 in addition to a decree against defendant 2.

(5) Before the Civil Judge, the Advocate appearing for defendant 1 made the concession that the plaintiff's suit against defendant 1 could not fail by reason of any novatio and that what displaces the claim is what is contained in S. 41 of the Contract Act. The Civil Judge accepted that submission and so it was that he dismissed the plaintiff's suit against defendant 1.

(6) I have no doubt in my mind that the concession was very property made that there was no novatio. There is no evidence, although there was a plea to that effect in the written statement produced by defendant 1 and also in his reply to the notice issued on behalf of the plaintiff, that there was any such novatio. There was no proof that the plaintiff agreed that the liability of defendant 1 should come to an end and that in the place of the agreement between defendant 1 and the plaintiff there should be a contract between defendant 2 and the plaintiff.

(7) The only question which therefore remains to be considered is whether the Civil Judge was right in applying section 41 of the Contract Act to the case before him. That section reads:

'When a promisee accepts performance of the promise from a third person, he cannot afterwards enforce it against the promisor.'

(8) The view which the Civil Judge took was that, since the plaintiff did receive from defendant 2 a sum of Rs. 5,500 towards the price of the timber which he had supplied to defendant 2, there was acceptance of the promise from defendant 2 under a contract which had to be performed by defendant 1, and that therefore it was no longer possible for the plaintiff to demand performance from defendant 1.

(9) The mistake committed by the Civil Judge in taking that view is attributable to his overlooking the real principle which section 41 incorporates. What that section provides is that, if A agrees to perform a contract and B is entitled to demand performance of that contract, and if B accepts performance of the contract from C, he can no longer demand its performance from A. If, for example, A agrees to supply ten bales of cotton to B for a stated price and C supplies those ten bales under the contract between A and B and B receives the goods under the contract, he can no longer demand delivery of the ten bales of cotton from A.

(10) It, therefore, follows that before S. 41 could be invoked, it should be established that the contract was performed by a stranger. It is not enough if it is performed in part. What is necessary is that it is should be performed in full. That, that is the correct view to take is what is clear from the decisions of the Privy Council in Harchandi Lal v. Sheoraj Singh, 4 Ind App 60(64) : (AIR 1916 PC 68(70) in which Lord Parker of Waddington said this at p. 64(of Ind App): (at p. 70 of AIR):

'In their Lordships' opinion section 41 of the Indian Contract Act, upon which the High Court relied, has no application to a case like the present. It applies only where a contract has been in fact performed by some person other than the person bound thereby.'

(11) Although the Privy Council did not say in so many words that the contract should have been performed in full, the clear meaning of what was said is that the contract must have been fully performed, its performance in part being not enough.

(12) In the case before me, defendant 2 paid only a sum of Rupees 5,500 to the plaintiff against a sum of Rs. 6,000 which was still due from defendant 1 to the plaintiff. Unless it is established that in consequence of an agreement between the plaintiff and defendant 1 to which defendant 2 is also a party, defendant 2 got substituted in the place of defendant 1 and the liability of defendant 1 terminated and in its place the liability of defendant 2 was substituted, it is not open to defendant 1 to contend that the plaintiff must recover the balance of the purchase money only from defendant 2.

(13) Mr. Alva appearing for defendant 2 contended that on two occasions the plaintiff admitted either before the Tahasildar or before the Forest Officer that the agreement for the supply of timber was between defendant 1 and the plaintiff. Exhibit D-1 and D-2 are those statements upon which Mr. Alva relies. Those statements do not support the case of defendant 1 that there was any novatio. All that the plaintiff stated on those two occasions was that defendant I had become entitled to the timber and that the plaintiff should supply the timber to him. It is obvious that those statements made by the plaintiff amounted to no more than a recognition of the rights of defendant 2 under the assignment, of the benefit of the contract, by defendant 1 in his favour. The advocate for defendant I very properly therefore admitted before the Civil Judge that there was no proof even in Exhibits D. 1 and D. 2 that there was any substitution of liability.

(14) In the view that I take, this revision petition must succeed. I allow it and I make a decree against defendant I and in favour of the plaintiff as prayed for in the plaint. Defendant 1 will pay the costs of the plaintiff in all the three Courts.

(15) Revision petition allowed.


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