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Sarju Prasad Vs. Bir Bhaddar Sewak Pande - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad High Court
Decided On
Judge
Reported in(1887)ILR9All681
AppellantSarju Prasad
RespondentBir Bhaddar Sewak Pande
Excerpt:
.....now made in his plaint, nandan tiwari was an agent, mukhtar, friend or well-wisher of bir bhaddar sewak pande, and after the aforesaid sale, at the request and desire of bir bhaddar sewak pande aforesaid, the plaintiff lent a further sum of rs. it must be further taken as a fact in the cause, because it is indisputable that the fact is so, that the plaintiff was well aware that though upon the face of it nandan tiwari was the agent for bir bhaddar in the transaction, bir bhaddar was the principal borrower, and that the transaction was conducted by nandan tiwari for and on his behalf as his agent. 6,136-8-0 which had been refunded to nandan, and on the 3rd may 1874, he took that particular sum of money out of court, so that his decree upon the bond of the 3rd december 1871, was pro tanto..........mewa lal held a decree of the 7th december 1864, against three persons, viz., bir bhaddar sewak pande, musammat janki pandain, and sat narain sewak pande, and in execution of that decree the zamindari properties of the judgment-debtors were advertized for sale to be held on the 20th november 1871. two days before the advertized date bir bhaddar sewak pande, the first of the above-mentioned judgment-debtors, came to the plaintiff in the present suit, and borrowed from him a sum of rs. 5,000, for the purpose, as he said, of discharging the decree of mewa lal, and as security for that advance, he made a hypothecation bond in favour of the plaintiff, charging his zamindari interest in six villages, promising to pay the amount in six months, and undertaking to pay interest at re. 1-7.....
Judgment:

Straight, J.

1. In order to render intelligible the conclusions at which I have arrived with regard to this appeal, it is of importance very narrowly to scan the terms of the plaint, and by the light of the previous litigation between the parties and the facts therein stated, to sea what precisely is the form of the suit brought by the plaintiff-respondent to which this appeal relates. The facts, as set out in the plaint, are as follows:

One Mewa Lal held a decree of the 7th December 1864, against three persons, viz., Bir Bhaddar Sewak Pande, Musammat Janki Pandain, and Sat Narain Sewak Pande, and in execution of that decree the zamindari properties of the judgment-debtors were advertized for sale to be held on the 20th November 1871. Two days before the advertized date Bir Bhaddar Sewak Pande, the first of the above-mentioned judgment-debtors, came to the plaintiff in the present suit, and borrowed from him a sum of Rs. 5,000, for the purpose, as he said, of discharging the decree of Mewa Lal, and as security for that advance, he made a hypothecation bond in favour of the plaintiff, charging his zamindari interest in six villages, promising to pay the amount in six months, and undertaking to pay interest at Re. 1-7 per cent, per mensem, or Rs. 15 per cent, per annum. On the 20th November 1871, the sale advertized in execution of the decree of Mewa Lai took place, and the six villages, his interest in which Bir Bhaddar had already mortgaged, were sold as the property of all the judgment-debtors. One of the villages was purchased by Mewa Lai for Rs. 8,500, and the other five villages, with which we are alone concerned in the present case, were purchased by Nandan Tiwari for Rs. 12,325. How Nandan Tiwari obtained the money was this. He had apparently got sufficient to pay the earnest-money required by law to be paid in the Court at the time of sale probably out of the Rs. 5,000 lent to Bir Bhaddar, but there remained a sum of Rs. 9,000, the balance which had to be paid into Court to satisfy the amount in full at which the villages had been bought. According to the statement of the plaintiff as now made in his plaint, 'Nandan Tiwari was an agent, mukhtar, friend or well-wisher of Bir Bhaddar Sewak Pande, and after the aforesaid sale, at the request and desire of Bir Bhaddar Sewak Pande aforesaid, the plaintiff lent a further sum of Rs. 9,000, for the payment of the purchase-money, obtaining a hypothecation bond from Nandan Tivari aforesaid, in whose name the property had been purchased at auction. The rate of interest agreed upon was Re. 1-7 per cent., and the money was to be repaid within six months as shown by the registered bond dated 3rd December 1871, which is forthcoming. The plaintiff was assured that the money borrowed was taken on security of the property, and that the execution of the bond in the name of Nandan Tiwari was necessary as a matter of form.

2. With regard to this paragraph in the plaint it is clear that Nandan Tiwari was, upon the face of the proceedings, the purchaser; and it is further to be taken, because the document speaks for itself, viz., the document of the 3rd December 1871, that he was the obligor upon the face of that instrument in favour of the plaintiff, and that he was, as a purchaser of the five villages, hypothecating them to the plaintiff for the amount of the advance made to him. It must be further taken as a fact in the cause, because it is indisputable that the fact is so, that the plaintiff was well aware that though upon the face of it Nandan Tiwari was the agent for Bir Bhaddar in the transaction, Bir Bhaddar was the principal borrower, and that the transaction was conducted by Nandan Tiwari for and on his behalf as his agent. It appears that after the purchase by Nandan Tiwari, under the circumstances I have stated, one or two suits were brought by members of the family of Bir Bhaddar, who had not been parties to the decree of Mewa Lal, and they recovered from Nandan, the auction-purchaser of the five villages sold, to the extent of their share or shares therein, with the result that the sum of Rs. 6,136-8-0 had to be refunded to Nandan, and was held by the Court to his credit in respect of the execution sale at which he had purchased. Babu Sarju Prasad, the present plaintiff, on the 12th February 1874, brought a suit against Nandan Tiwari on the bond of the 3rd December 1871, and he claimed under that, for-principal and interest due, a sum of Rs. 12,514, and he obtained a decree against Nandan for that amount, by enforcement of the hypothecation of the five villages contained in the bond, on 28th March 1874. Almost immediately after he had obtained that decree, he made an application for the attachment of the Rs. 6,136-8-0 which had been refunded to Nandan, and on the 3rd May 1874, he took that particular sum of money out of Court, so that his decree upon the bond of the 3rd December 1871, was pro tanto satisfied, and satisfaction to that extent was entered up. Having so far satisfied his decree, which left a balance of some Rs. 6,000 and odd, he proceeded to enforce it by sale of the hypothecated villages, and on the 20th August 1874, he purchased those villages for the sum of Rs. 8,320; that is to say, he paid something in excess of the balance of the judgment-debt due, with the consequence that such excess went into the pocket of Nandan Tiwari, the judgment-debtor.

3. Then came the difficulties of the plaintiff. He applied for mutation of names, and he sought to obtain actual possession of the properties that he had purchased. He was then resisted by Bir Bhaddar and Sat Narain upon the ground that Bir Bhaddar was the real purchaser of the five villages at the execution sale of the 20th November 1871, and that Nandan Tiwari was a mere ismfarzi. The opposition on the part of Bir Bhaddar was successful, and we may take it that the plaintiff has never obtained possession of the villages which he bought on the 20th August 1874. In consequence of the opposition that had been thrown in his way by Bir Bhaddar, the plaintiff, upon the 28th May 1880, brought a suit against Bir Bhaddar and Sat Narain for possession of the villages he had bought for Rs. 8,320, and of course the title upon that occasion he was constrained to rely upon, was the title which he had acquired through Nandan Tiwari, and it was obviously necessary, for the purposes of that suit as brought, for him to establish that Nandan was in fact the real purchaser of the property, and that by reason of that circumstance he had acquired proprietary title thereto. That suit ultimately ended in an appeal in this Court, and this Court held that, upon the evidence of the plaintiff himself given in that case, it was obvious that he knew perfectly well that Nandan was a mere agent in the transaction, that he was not the real purchaser at all, but that Bir Bhaddar was the real purchaser; and accordingly this Court held that the plaintiff's suit failed, and accordingly dismissed it.

4. Now the plaintiff comes into Court, and it is not very easy to understand what is the precise nature of the suit that he brings. Perhaps the most convenient way of presenting it is to read the relief sought. The 11th paragraph of the plaint recites: 'That under the bond, dated 3rd December 1871, after deducting the sums realized, Rs. 7,518-3-0 principal and Rs. 4,818-0-6 interest, total Rs. 12,336-3-6, are due to the plaintiff as detailed at foot. As Bir Bhaddar Sewak Pande himself borrowed the money, though the second bond was taken at his desire and request in the name of Nandan Tiwari, and as the amount of both the bonds was advanced on the security of the property, which eventually, by a decree of the Court, has, by admitting the objection of Bir Bhaddar Sewak Pande, been declared to be Bir Bhaddar's property, he (Bir Bhaddar) cannot escape the liability to pay the debt. The property which he has acquired is chargeable with the debt due to the plaintiff by reason of its hypothecation in the two bonds and the conduct of the said defendant, and also because he (Bir Bhaddar Sewak Pande), defendant, has obtained it with the help of the money advanced by the plaintiff. Bir Bhaddar Sewak Pande failed to pay the money notwithstanding repeated oral demands and the notice given by means of a registered letter, dated 24th December 1883, in which he was asked to pay the money. The cause of action as against Bir Bhaddar Sewak Pande arose on the date of the decision of the High Court. The plaintiff therefore asks for the following reliefs: 1. That Rs. 7,518-3-0 principal and Rs. 4,818-0-6 interest, total Rs. 12,336-3-6, be awarded to the plaintiff from Bir Bhaddar Sewak Pande, defendant, with future interest to the date of payment. 2. That the sums mentioned above may be decreed against Bir Bhaddar Sewak Pande aforesaid personally, and also against the property hypothecated in the bond.' And then it goes on to set out what the amount is, and the interest is calculated, at the rate of 8 annas per cent, from the 29th March to the 3rd May 1874, and then Rs. 6,136-8-0, which was realized on the 3rd May 1874, is deducted, leaving a balance of Rs. 7,518-3-0, and then interest is calculated on it from the 4th May 1874 to the 9th January 1885, at 8 annas per cent. : total Rs. 12,336-3-6.

5. Now, it is obvious from what I have said that the only security which the plaintiff had for the advance made by him for the purpose of the purchase of the 20th November 1871, was the bond executed in his favour by Nandan Tiwari upon the 3rd December 1871. It was only under that instrument that any hypothecation was made or subsisted. I have said that Nandan Tiwari was treated as an agent, in the transaction, for and on behalf of Bir Bhaddar Sewak Pande, and I have also said that the plaintiff was well aware that he was not the principal in the transaction, but that the principal was Bir Bhaddar. That being so, what was the course he ought to have adopted, and what is the course in law he should have adopted in order properly to protect himself? I believe this to be a sound principle of law, that if a person enters into a contract with another, believing him to be the principal in the transaction, though in fact that other, is acting as an agent, but that he subsequently discovers who the real principal is, even though he may first have given credit to the party who subsequently turns out to be an agent, he may nevertheless, upon discovering who the principal is, substitute him as his debtor. I believe it also to be the rule of law that in a case like the present where the agent and the principal were perfectly well known to the plaintiff, he might have made one or the other or both of them responsible. But I understand it to be equally clear that when once the creditor has elected, as the plaintiff did elect in the present case, to hold the agent as responsible upon the contract, to take him into Court, and having obtained judgment and decree against him, to execute such decree and write up satisfaction thereof, it is not competent afterwards for him to maintain a suit against the principal in respect of the same subject-matter. My authority for this proposition is to be found in the case of Priestly v. Fenie, 3 H. & C., 977; 34 L. J., Exch., 172, and it is based upon the principle which is discussed at large in the notes to Thompson v. Davenport, 9 B. & C, 78; Smith's L. C, Vol. II. p.390. In the present case it is to be noted that the plaintiff gives as his cause of action the decision of this Court in the suit which he brought against Bir Bhaddar and Sat Narain for possession under the title which he asserted he had acquired by his purchase at the sale in execution of the decree against Nandan Tiwari. But as I have said before, the only document of title with which he had to bring the property to sale was the bond executed by Nandan Tiwari. If he had chosen, when ho put that instrument in suit in the first instance, to include Bir Bhaddar as a defendant, I think it would have been perfectly competent for him to show that Bir Bhaddar was the real principal in the transaction, and that Nandan Tiwari was merely an agent. But he did not do that; he chose to confine his proceedings solely and entirely to Nandan Tiwari, and to treat Nandan Tiwari as the party who was responsible to him upon that document. Having done that, and having not only obtained a decree, but having written up full satisfaction of that decree, it seems to me that that bond of Nandan Tiwari, which was the sole document entitling him to enforce hypothecation, has been merged in that decree, and as that decree was a decree against Nandan Tiwari alone, he can, out of that decree and out of that hypothecation which was merged in that decree, have no right whatever to come into Court and ask the relief which he does in the present case.

6. Indeed it is to be observed that the plaintiff in the plaint, treating the bond as partly satisfied in execution of the decree of Nandan Tiwari, namely, to the extent of Rs. 6,136-8-0, and giving credit for that amount obtained from Nandan Tiwari, comes in now and asks for the balance, with the interest calculated at a totally distinct and different rate from that mentioned in the bond, and asks to bring the property to sale for such balance and altered interest. But I am unaware of any legal ground upon which, under the circumstances, such a claim can be sustained. No doubt, at first sight, it did strike one as somewhat inequitable that Bir Bhaddar should hold the property which he had purchased with the plaintiff's money, but the plaintiff has no one but himself to blame for having elected to bring his suit against Nandan Tiwari and to treat him as his debtor.

7. For the reason stated I am of opinion that the suit was unmaintainable, and the Subordinate Judge's decision being reversed, the appeal is decreed with costs, and the suit of the plaintiff will stand dismissed with costs.

Tyrrell, J.

8. I concur.


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