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Janki Rai Vs. Ramghulam and anr. - Court Judgment

LegalCrystal Citation
SubjectContract;Property
CourtAllahabad High Court
Decided On
Judge
Reported in(1885)ILR7All124
AppellantJanki Rai
RespondentRamghulam and anr.
Excerpt:
contract - consideration--uncertified adjustment of decree--civil procedure code, sections 244(c), 258--act ix of 1872 (contract act), sections 2, 10, 23, 28. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of the maharashtra act cannot entertain appeals filed under section 9 by the employees..........that, although satisfied, they are still in force under the provisions of section 258 of the civil procedure code, he would surely be made to suffer in pocket, and probably in person also. moreover, if the appellants considered the entering up of the adjustment of the decrees to be imperative, they had their remedy by application to the court in the terms of section 258 of the code of civil procedure. i would dismiss the appeal with costs.mahniood, j.2. i am of the same opinion. the real question in the appeal is, whether the decretal amount of rs. 700 can be considered a valid consideration of the mortgage-deed to that extent, notwithstanding the fact that the plaintiff, who held those decrees, never certified to the court that the decrees had been adjusted out of court. the provisions.....
Judgment:

Duthoit, J.

1. The only plea now urged before us is the second, viz., that because the respondent has failed to enter up satisfaction of the two decrees, they are still in force, and the respondent, being in breach, is not competent to sue on his bond. The plea is ingenious, but has no real force. The respondent did not covenant with the appellants to enter up satisfaction of the decrees in Court, nor was it, in fact, necessary for him to do so. Were the respondent to seek execution of the decrees upon the plea that, although satisfied, they are still in force under the provisions of Section 258 of the Civil Procedure Code, he would surely be made to suffer in pocket, and probably in person also. Moreover, if the appellants considered the entering up of the adjustment of the decrees to be imperative, they had their remedy by application to the Court in the terms of Section 258 of the Code of Civil Procedure. I would dismiss the appeal with costs.

Mahniood, J.

2. I am of the same opinion. The real question in the appeal is, whether the decretal amount of Rs. 700 can be considered a valid consideration of the mortgage-deed to that extent, notwithstanding the fact that the plaintiff, who held those decrees, never certified to the Court that the decrees had been adjusted out of Court. The provisions of the law upon which the learned pleader for the appellant relies in support of his contention are contained in the last paragraph of Section 258 of the Civil Procedure Code, which lays down that 'no such payment or adjustment shall be recognized by any Court unless it has been certified as aforesaid.' And the learned pleader insists that the failure of the plaintiff to certify to the Court the adjustment of the decrees amounts to failure to pay a part of the consideration, for the decrees are still alive and may be enforced and the decretal money realized thereunder, notwithstanding the mortgage, the terms whereof are sought to be enforced in this suit.

3. It seems to me that the determination of the point so raised depends upon the question whether the contingency contemplated by the argument of the learned pleader for the appellant can actually take place under the law; and, if so, whether the appellant would have any remedies open to him, in the event of his having to pay the decretal money in Court.

4. Provisions similar to the last paragraph of Section 258 of the Civil Procedure Code existed in Section 206 of the Code of 1859, and, whilst that Code was in force, it was held by a Full Benohof the Calcutta High Court in Gunamani Dasi v. Pran Kishori Dasi 5 B.L.R. 223 : 13 W.R.F.B. 69 that if a decree is adjusted out of Court, and the decree-holder, failing to certify such adjustment, executes the decree and realizes the amount thereof, the judgment-debtor can maintain a suit for compensation against the decree-holder. A similar view was taken in Meer Mahomed Kazem Jowharry v. Khetoo Bebee 20 W.R. 150 and even after the passing of the Code of 1877, it was held by the Calcutta High Court in Guni Khan v. Koonjo Behiry Sein 3 Cal. L.R. 414 by the Bombay High Court in Davlata v. Ganesh Shastri I.L.R. 4 Bom. 295 and by this Court in Shadi v. Ganga Sahai I.L.R. 3 All. 538 that the law, on the point now under consideration, had undergone no change. The language of Section 258 of the Coda' of 1877 was, however, altered by Section 36 of Act XII of 1879, and the new section has re-appeared unaltered in the present Code. Upon the new section, a Division Bench of the Bombay High Court in Patankar v. Devji I.L.R. 6 Bom. 146 held, with expression of regret, that the law had been altered, and that a suit for the recovery of money paid to a judgment-creditor out of Court, and not certified, was barred by Clause (c) of Section 244 read with the last paragraph of Section 258 of the Civil Procedure Code. If the law has been so altered, I entirely concur with the regret which the learned Judges expressed in that case. But has the law been so altered? The learned Judges have not assigned any reasons for the conclusion at which they arrived, but there can be no doubt that that conclusion is in direct conflict with the ruling of this Court to which I have already referred, and with another case, Sita Ram v. Mahipal I.L.R. 3 All. 533 in which Straight, J., explained the phrase, 'any Court,' as it occurs in the last paragraph of Section 258, to have reference to proceedings in execution, and to the Court or Courts executing a decree. Having considered the question, and with due deference to the ruling of the Bombay Court in the case of Patankar I.L.R. 6 Bom. 146, I find myself unable to concur in the view of the law taken in that case. There can be no doubt that an adjustment of decree out of Court, if not certified according to Section 258, cannot be taken into account in executing the decree. Such was the law under the Code of 1859, it remained unaffected by Act XII of 1879, and it is so under the present Code. In the Code of 1877, the phrase 'such Court' occurred, and the word 'such' has given place to the word 'any' in the last paragraph of Section 258 of the present Code. Perhaps it was in view of this change of language that it was ruled in Patankar v. Deoji I.L.R. 6 Bom. 146 that the law had undergone a serious change. I confess I am unable to entertain any such opinion. The leading case upon the subject is the Full Bench ruling of the Calcutta High Court to which I have already referred, and although the language of Section 258 of the present Code is, in many respects, different from the wording of Section 206 of the Code of 1859, it seems to me that the ratio decidendi upon which that ruling proceeds is applicable in principle to the section of the present Code. The section lays down no rule of substantive law relieving parties from the legal consequences of valid contracts, not, indeed, can the section be regarded as a rule of evidence barring the proof of facts which have actually occurred. The section occurs in a Code regulating civil procedure, in a chapter which relates to execution of decrees, and the only object it can have in view is to remove the inconvenience which would otherwise arise in connection with the execution of decrees in cases in which adjustment out of Court is pleaded. Beyond this it seems to me the section can have no effect. It cannot affect Courts which are not concerned with the question of execution of decree, but with a separate suit in which the cause of action alleged is the breach of a valid contract by which the decree-holder has bound himself not to execute the decree. The Court executing the decree is bound to recognize no adjustment of that decree if such adjustment is not duly certified; but this only shows that such uncertified adjustment is expressly declared by the statute to be a question not 'relating to the execution, discharge or satisfaction of the decree' within the meaning of Clause (c) of Section 244 of the Code. So that the last paragraph of Section 258, far from rendering the provisions of Section 244 a bar to the entertainment of a, separate suit in connection with such uncertified adjustments, has quite the contrary effect. I therefore adhere to the view which the Calcutta Court and this Court have uniformly taken of the rule of law which prohibits uncertified adjustment of decrees from being recognized by the Courts concerned in executing those decrees.

5. I have considered it necessary to dwell upon this question at such length because if I had taken the same view of the law as was taken in Patankar v. Devji I.L.R. 6 Bom. 146 I do not think that the decretal amount of Rs. 700, which forms a part of the consideration of the mortgage-deed in the present case, could be regarded as a valid consideration in the absence of certifying the adjustment of the decrees to the Court concerned in their execution. Indeed, such a view of the law was actually taken by the Bombay High Court in Pandurang Ramchandra Chowghule v. Narayan I.L.R. 8 Bom. 300 wherein Sargent, C.J., with the concurrence of Kemball, J., laid down the rule that 'the adjustment of the decree, not having been certified to the Court, was not binding on the plaintiff, and therefore constituted no valid consideration' of the bond on which the suit was based. The ruling is directly applicable to the present case, and necessarily proceeds upon an implied approval of the rule laid down in Patankar v. Devji I.L.R. 6 Bom. 146 from which I have already expressed my dissent. The later ruling is, indeed, the logical consequence of the earlier case. The respect that we owe to the ruling of the Bombay High Court makes it incumbent upon me to explain my reasons for declining to adopt the rule laid down in the later of those cases. The learned Judges in that case went to the length of laying down that 'the bond was void without consideration' because an uncertified adjustment of decree 'constituted no valid consideration.' So far as the question of procedure is concerned, I have already endeavoured to show that the prohibition against the recognition of uncertified payments cannot be understood either as a rule of evidence or as a rule of the law of contract. The Indian Contract Act (IX of 1872) cannot be taken to have been amended or modified by the last paragraph of Section 258 of the Civil Procedure Code; and in the former of these enactments clear rules are laid down as to the validity of consideration and contract. Section 2 of the Act thus defines consideration: 'When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.' Then an agreement is denned to be 'every promise and every set of promises forming the consideration for each other;' and it is laid down that 'an agreement not enforceable by law is said to be void.' But 'an agreement enforceable by law is a contract.' 'Contract' therefore includes the element of legality in the sense in which it is used in the Act, and Section 10 provides that 'all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.' The only other section which I need quote is Section 23, which provides that 'the consideration or object of an agreement is lawful, unless--(1) it is forbidden by law; or (2) is of such a nature that, if permitted, it would defeat the provisions of any law; or (3) is fraudulent; or (4) involves or implies injury to the person or property of another, or (5) the Court regards it as immoral or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful, is void.' Now, the Bombay ruling which I am considering, lays it down as a settled rule of law that a bond executed in adjustment of a decree, such adjustment not having been certified to the Court, renders such contract void, and the reason assigned is that it must be regarded as 'without consideration,' for the consideration was invalid. It seems to me that the sections of the Contract Act which I have already-quoted justify no such conclusion. The promise or undertaking on the part of a decree-holder not to execute his decree, or the acceptance by him of a bond, a mortgage, or other similar contract as satisfaction of the decree, is undoubtedly a consideration within the meaning of Section 2 of the Contract Act, and the transaction constitutes an agreement which amounts to a 'contract' under Section 10, unless it can be shown that the consideration or object of the agreement was unlawful within the meaning of Section 23, which I have already quoted. Is there then anything to show that the consideration or object in such a contract 'is forbidden by law' In the Contract Act itself Sections 24--30 lay down what agreements are void, but none of these provisions applies to a contract such as the one now under consideration. Section 28 might at first sight appear to be applicable, but it seems to me that the prohibition contained in the section is limited to agreements in restraint of legal proceedings for enforcing 'rights under or in respect of any contract,' which must be understood in the sense in which the Act defines it, and cannot be held to include rights under a decree. If then such contracts are not forbidden by the Contract Act, where is the prohibition to be found. The last paragraph of Section 258 of the Civil Procedure Code contains no such prohibition. It simply lays down that the Court in discharging its duties connected with the execution of decrees shall not recognize any adjustment of those decrees made out of Court and never certified to the Court, but the provision falls far short of justifying the view that all contracts by which decrees are adjusted out of Court are in themselves 'forbidden by law,' that they are therefore illegal when entered into, but become legal the moment the adjustment is certified to the Court. The paragraph lays down no rule of substantive law; but simply a rule of procedure suggested by considerations of convenience similar in principle to those which form the reason of the rules by which the frame of suits, the right of set-off, and other provisions of adjective law, are governed. And it seems to me that there is scarcely any more reason in principle for saying that uncertified adjustments of decree give no right, because the Courts are prohibited from recognizing them, and the judgment-debtor cannot plead them in execution of those decrees, than there would be for the proposition that, because Section Ill of the Civil Procedure Code does not allow certain obligations of the plaintiff to be pleaded as set-off to his claim, therefore those obligations cannot be enforced by a separate suit.

6. Referring still to Section 23 of the Contract Act, I proceed to consider whether the adjustment of a decree out of Court, without such adjustment being certified, is an agreement of 'such a nature that, if permitted, it would defeat the provisions of any law.' I suppose there is no provision of the law except Section 258 of the Civil Procedure Code, which can possibly be taken to be defeated by permitting an uncertified adjustment of decree out of Court to possess the validity of a contract. But I have already stated my reasons for the view that the sole aim and end of Section 258 of the Civil Procedure Code, in common with all other rules of adjective law, is to facilitate the disposal of litigation; and this object; is in no manner defeated by permitting agreements out of Court by which a decree is adjusted. The Court executing the decree will, of course, not recognize them if they are not duly certified, but this circumstance in itself shows that the provisions of the law cannot be defeated. For the view which I have taken does not involve the recognition of such uncertified adjustments by any Court in the exercise of its functions under Section 258 of the Civil Procedure Code. My view is that such adjustments, if made by an agreement, amount to a contract which does not and cannot defeat the objects of Section 258 of the Civil Procedure Code, but gives birth to a new right which may be enforced in a separate suit, and not in the proceedings taken in the execution of the decree adjusted by such agreement.

7. It is not necessary to consider the remaining clauses of Section 23 of the Contract Act, because it is scarcely conceivable that any arguments can even plausibly be based on any of those clauses against the view which I have taken. And if this is so, I confess I fail to see why an agreement, the consideration and objects of which are not 'forbidden bylaw,' which is not 'of such a nature that, if permitted, it would defeat the provisions of any law,' should be considered as a void agreement, incapable of giving birth to a right the breach of which would constitute a valid cause of action for a separate suit. And I may add that the view which I have taken is consistent with the interpretation placed upon Clause (2) of Section 23 of the Contract Act by the Lords of the Privy Council in Seth Gokul Dass Gopal Dass v. Murl I.L.R. 3 Cal. 602 : L.R. 5 Ind. Ap. 78 which involved a point of law similar in principle to the case now before us.

8. I hold that the adjustment of a decree out of Court, if never certified to the Court, is ineffectual only so far as the execution of that decree is concerned; but that, if such adjustment is made by an agreement in itself valid, such agreement, like other lawful contracts, becomes the basis of a right, which, if infringed, can afford a cause of action for a separate suit, notwithstanding the provisions of Section 244 of the Civil Procedure Code. There is no provision in our law which renders such agreements void or otherwise illegal; and in the present case, if the plain tiff-respondent attempts, in breach of the contract contained in the mortgage-deed, to execute the decrees the amount whereof has already been included in the consideration of the deed, he will render himself liable to a separate suit by the defendant-appellant, in which full relief could be awarded. What the nature of such relief may be, it is unnecessary for the purposes of this appeal to determine, for it depends upon circumstances which we cannot anticipate. I may, however, add that in the case of Nujeem Mulhoh v. Erfan Mollah 22 W.R. 298 it was held that a suit to enforce a contract by which a dispute was adjusted between a decree-holder and a judgment-debtor could be maintained; and in Nubo Kishen Mookerjee v. Debnath Roy Chowdhry 22 W.R. 194 it was laid down that the Court could, at the suit of the judgment-deptor, issue an injunction restraining the judgment-creditor from executing his decree. A similar view was taken in Dhuronidhur Sen v. Agra Bank Limited 4 Cal. L.R. 434 and without discussing the rules laid down in the various cases, I may safely say that there is ample authority in the reports to show that in case of breach of the contract by which a decree has been adjusted out of Court, but such adjustment has never been certified, the law does not leave the injured judgment-debtor without a remedy. Indeed, so long as it is conceded that such adjustments are not in themselves illegal, they must be held to give birth to a right, and the law contemplates no rights without a remedy--ubi jus ibi remedium.

9. Applying these principles to the present case, the decretal amount of Rs. 700 was a valid consideration, to that extent, of the deed upon which the suit from which this appeal has arisen was based. The findings of the Lower Appellate Court on the merits preclude us from considering any other question in second appeal, and I therefore agree with my brother Duthoit in dismissing this appeal with costs.


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