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Bhikha Lal and ors. Vs. Munna Lal - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 2511 of 1966
Judge
Reported inAIR1974All366
ActsUttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947 - Sections 3(1); Post Office Act, 1898 - Sections 44 and 44(1)
AppellantBhikha Lal and ors.
RespondentMunna Lal
Appellant AdvocateB.R. Awasthi, ;L.P. Singh, ;J.N. Agarwala and ;Yogesh Agarwal, Advs.
Respondent AdvocateGopal Behari (Amicus Curiae) and ;Gur Pratap Singh, Adv.
Excerpt:
tenancy - payment by money order - section 3 of u.p. temporary control of rent and eviction act, 1947 - tenant made payment in time through money order - delay on part of postal department - tenant's responsibility is discharged, the moment payment is remitted to postal department - not responsible for delay. - - 35 which he had sent to the landlord by money order well within time but which had reached the landlord after the expiry of 30 days? the suit was filed on the allegations that the defendant was in arrears of rent for more than three months and had failed to pay the amount within a month of the service on him of the notice of demand. the trial court, however, took the view that the defendant had failed to pay the arrears of rent of rs. 35 was concerned the lower appellate court.....yashoda nandan, j.1. in a plaintiff's second appeal arising out of a suit for recovery of arrears of rent and for ejectment of the defendant-respondent, the following question has been referred, for consideration and answer, to this full bench:--'whether on the facts and in the circumstances of the case the tenant could be said to have committed a default under section 3 (1) (a) of the u. p. (temporary) control of rent and eviction act in respect of the payment of rs. 35 which he had sent to the landlord by money order well within time but which had reached the landlord after the expiry of 30 days?'2. the material facts giving rise to this reference are that munna lal, the defendant-respondent was a tenant of a portion of premises no. 105/336, chaman-ganj, kanpur at a monthly rent of rs......
Judgment:

Yashoda Nandan, J.

1. In a plaintiff's second appeal arising out of a suit for recovery of arrears of rent and for ejectment of the defendant-respondent, the following question has been referred, for consideration and answer, to this Full Bench:--

'Whether on the facts and in the circumstances of the case the tenant could be said to have committed a default under Section 3 (1) (a) of the U. P. (Temporary) Control of Rent and Eviction Act in respect of the payment of Rs. 35 which he had sent to the landlord by money order well within time but which had reached the landlord after the expiry of 30 days?'

2. The material facts giving rise to this reference are that Munna Lal, the defendant-respondent was a tenant of a portion of premises No. 105/336, Chaman-ganj, Kanpur at a monthly rent of Rs. 5. Appellants Bhikha Lal and others are owners of the said premises. The respondent fell in arrears of rent and consequently the appellant filed civil suit No. 570 of 1961 for his ejectment and for recovery of arrears of rent and damages for use and occupation amounting to a sum of Rs. 89.75 P. The suit for recovery of rent was ultimately decreed. The decretal amount and certain other amounts were deposited by the judgment-debtor in the trial court in compliance with a conditional interim order passed by the appellate court. The appellants did not withdraw the decretal amount in those proceedings. The respondent again fell in arrears of rent for the period 25th November, 1962 to 24th June, 1963 amounting to Rs. 35. The appellants thereupon served upon the respondent a notice on 23rd of July, 1963 demanding the amount decreed in suit No. 570 of 1961 as also arrears of rent amounting to Rs. 35. The appellants are residents of a village in Kanpur served by a post office situate at Kandhana. On receipt of the notice served on him on the 23rd of July, 1963, the respondent informed the appellants-landlords by registered letter dated 6th of August, 1963 that the sum of Rs. 89.75 P. had already been deposited towards rent to the credit of the landlords in previous suit No. 570 of 1971 which may be withdrawn from the court and that, as regards the arrears of rent for subsequent months, the sum of Rs. 35 was being remitted by money order. The two sums together represented the arrears of rent then due and demanded. On the 7th of August, 1963 the defendant-tenant placed an order with the postal authorities in the town of Kanpur for remission of the amount of Rs. 35. The money order was directed to Bhikha Lal, the head of the family of the landlords. The money order, however, was returned to the defendant-tenant with an endorsement of refusal. This endorsement on the money order coupon was dated the 26th of August, 1963. There is no evidence on record that the money order was presented to the appellants in time within a month of the service of the notice of demand on the respondent. The appellants consequently instituted the suit giving rise to this second appeal. The suit was filed on the allegations that the defendant was in arrears of rent for more than three months and had failed to pay the amount within a month of the service on him of the notice of demand. The suit was contested on the ground that the amount of Rs. 89.75 P. claimed as arrears of rent had been deposited by the defendant-respondent in suit No. 570 of 1961 which could have been withdrawn by the appellants and that the balance of the arrears of rent claimed had been duly remitted by means of a money order, properly addressed to Bhikha Lal, the Head of the appellants, family within time but had been improperly refused acceptance by the appellants and, consequently, he was protected from ejectment by Section 3 (1) (a) of the U. P. (Temporary) Control of Rent and Eviction Act (hereinafter referred to as the Act). The trial court decreed the suit for arrears of rent and for ejectment of the defendant. It held that the defendant could not be considered to be a defaulter in respect of the demand of Rs. 89.75 P., being the decretal amount in suit No. 570 of 1961. It was held that this amount had been deposited by the defendant in the court and could be withdrawn by the plaintiffs-landlords. The trial court, however, took the view that the defendant had failed to pay the arrears of rent of Rs. 35 within one month of the service of the notice of demand inasmuch as the money order sent by the tenant reached the landlords beyond that period. According to the trial court, consequently, the defendant was not entitled to claim protection of Section 3 (1) (a) of the Act and was liable to be ejected. In appeal by the defendant the lower appellate court affirmed the finding of the trial court to the effect that the defendant could not be considered to be a defaulter as far as the amount of Rupees 89.75 P. was concerned. So far as the demand for rent amounting to Rs. 35 was concerned the lower appellate court held that the money had been remitted by the tenant by money order well within time. The court below presumed that it must have reached the landlords within one month of the 23rd of July, 1963 on which date the notice of demand was served on the tenant. According to the lower appellate court the fact that on the money order coupon there was an endorsement dated 26th August, 1963 showing that the landlords had refused to accept the money did not mean that the money was not tendered to the landlords before that date and well within time. In the result, it was held that there was no default on the part of the tenant and he was entitled to the protection of U. P. Act No. 3 of 1947. The decree for ejectment passed against the tenant was in consequence set aside. The landlords appealed to this Court.

3. It was contended on behalf of the landlords before K. B. Asthana, J., who heard the appeal that, in the circumstances of the case, the tenant had defaulted in paying both the amounts, namely, Rs. 89.75 P. and Rs. 35 within one month of the service of notice of demand and consequently, the tenant was not entitled to any protection under U. P. Act 3 of 1947 and the suit for ejectment had wrongly been dismissed by the lower appellate court. The learned single Judge, who heard the appeal, was inclined to accept the reasoning of the lower appellate court and to hold that the tenant could not be considered to be a defaulter for non-payment of Rs. 89.75 demanded by the notice and that he did not lose the protection of U. P. Act 3 of 1947 on that account. With regard to the amount of Rs. 35 claimed by the appellants as arrears of rent, the learned single Judge was inclined to take the view that by placing an order for payment of that amount to the landlords, the respondent had in the circumstances of the case, tendered the amount to the post office as agent of the landlords and, consequently, there had been no default on his part within the meaning of Section 3 (1) (a) of the Act. He was, however, faced with the decision of this Court in Govind Rao v. Kanhaiya Lal, 1971 All LJ 1399 decided by ,a Bench consisting of B. D. Gupta and A. K. Kirty, JJ. in which the view taken was that Section 44 of the Indian Post Office Act, 1898 (hereinafter referred to as the Post Office Act) 'contains clear statutory recognition of the principle that the post office, in the case of a money order, is an agent of the remitter and continues to be so until termination of that agency which takes place when the money remitted by the remitter has been handed over to the payee'. The Bench went on to hold that, 'we have, therefore, no doubt that, keeping in view the provisions contained in Section 44 of the Post Office Act, the post office is the agent of the remitter and not of the payee. That being so the post office in the present case, was the agent of the appellants and whatever be the cause of delay which took place before the amount under that money order was offered to the plaintiffs-respondents for the first time on 29th November, 1968, the responsibility lay with the agent of the appellant for which the appellant has to suffer. There is nothing on record to suggest any agreement between the parties to the effect that the payment of rent was to be made by money order nor was any such request contained in the notice of demand. In the circumstances the agency of the post office employed by the appellants for making the payment was of the appellants own choice.'

4. Thus, according to the decision in 1971 All LJ 1399 (supra), a statutory agency comes into existence between the tenant-remitter and the post office when the tenant chooses to send the arreare of rent demanded, by means of money order. The only exception to this sort of statutory agency, according to that deci-sion, may be a case where there was an express agreement between the parties to the effect that the payment of rent was to be made by money order or there is a request that the amount claimed in the notice of demand be sent by a money order. The learned single Judge was disinclined to accept the correctness of the decision in 1971 All LJ 1399 (supra). He. consequently, framed a number of questions and referred them for consideration to a larger Bench.

5. The reference made by K. B. Asthana, J., came up before a Bench consisting of R. L. Gulati and H. N. Seth, JJ. There was a cleavage of opinion between the two learned Judges on the question as to whether the deposit of Rs. 89.75 P. in the trial court in suit No. 570 of 1961 by the tenant amounted to its payment to the landlords. The learned Judges consequently framed the following question and referred it for answer to a third learned judge:--

'Whether on the facts and in the circumstances of the case the defendant respondent could be said to have committed a default in payment of arrears of the decretal amount amounting to Rs. 89.75 for purposes of Section 3 of the Rent Control and Eviction Act?'

6. It came up for consideration before R. B. Misra, J. who agreed with Gulati, J., and held that in the circumstances of the case the defendant-respondent could not be said to have committed a default in payment of the decretal amount in suit No. 570 of 1961 amounting to Rs. 89.75 P. for purposes of Section 3 of the Act. In the reference before R. L. Gulati and H. N. Seth, JJ., the learned Judges also were of the opinion that the decision in 1971 All LJ 1399 (supra) required reconsideration and con-sequently have referred the question quoted above to a Full Bench.

7. The decision in 1971 All LJ 1399 (supra) has been subsequently approved in Rahat Husain v. Mst. Husain Fatima Bibi, (Second Appeal No. 2928 of 1968) decided on 4-11-1971 (All.) by a Bench consisting of G. C. Mathur and A. K. Kirty, JJ. According to the decision in this case, the view taken in 1971 All LJ 1399 (supra) was supported by the decision of the Supreme Court in Commr. of Income-tax, Bombay v. Ogale Glass Works Ltd., AIR 1954 SC 429. Referring to that decision of the Supreme Court the Bench which decided Second Appeal No. 2928 of 1968, D/- 4-11-1971 (All) held as follows:--

'In the case before the Supreme Court the question was whether in a case where a cheque has been sent by registered post the post office is the agent of the sender or of the addressee. The Supreme Court held that if the cheque is sent by post at the request of the addressee then the post office is the agent of the addressee; but if there is no such request, express or implied, then the delivery of the letter or the cheque to the post office is delivery to the agent of the sender himself. In the case of a money order, in view of the provisions of Section 44 of the Indian Post Office Act there can be no doubt that the post office is the agent of the remitter and not of the payee.'

It appears that in the view of the learned Judges who decided Rahat Husain v. Mst. Husain Fatima Bibi, while in the case of a cheque sent bv post, the post office, in certain circumstances, could be consider-ed to be the agent of the payee but not so in the case of an amount remitted by money order because of Section 44 of the Post Office Act. With profound respect to the learned Judges who decided Govind Rao v. Kanhaiya Lal (supra) and Rahat Husain v. Mst. Husain Fatima Bibi, no such conclusion as has been arrived at in those cases is justified on the basis of the decision of the Supreme Court in the Commissioner of Income-tax, Bombay v. Ogale Glass Works Ltd. (supra). Section 44(1) of the Post Office Act, on which the decision of the two cases of this Court mentioned above, rest runs as follows:--

'44 (1) Subject to such conditions as the Central Government may, by rules made under Section 43, prescribe in respect of the levy of additional rates of commission or fees or any other matters, a person remitting money through the post office by means of a money order may require that the amount of the order, if not paid to the payee be repaid to him, or be paid to such person other than the original payee as he may direct.' According to this statutory provision, since the remitter retains the right to recall his order for payment of the amount covered by the money order till such time as the amount is not actually paid to the payee, in the abovementioned two decisions of this Court it was held that the post office remains the statutory agent of the remitter and could not become the agent of the payee. We have to see as to how far the view expressed in those decisions is in accord with that of the Supreme Court in the Commissioner of Income-tax, Bombay v. Ogale Glass Works Ltd. (supra). The material facts of the case before the Supreme Court were that the assessee-respondent was a nonresident company incorporated and carrying on business in the former Aundh State outside British India. In the rele-vant accounting year, the assessee secured some contracts for the supply of goods manufactured by it to the Government of India. Under one of the Clauses of the agreement between the parties payment for the goods delivered was to be made on submission of the bills in the prescribed form by cheques issued on a Branch of the Reserve Bank or the Imperial Bank of India transacting Government business. The assessee used to sub-mit bills in the prescribed form and on the forms it used to write 'kindly remit the amount by cheque in our favour on any Bank in Bombay'. All payments for the goods supplied were made by cheques drawn by the Government departments at Delhi on the Reserve Bank of India at Bombay and posted from there to the assessee. The question before the Supreme Court was as to whether, on the facts and circumstances of the case the income, profits or gains in respect of the sales made to the Government of India were received by the assessee in British India within the meaning of Section 4(1)(a) of the Income-tax Act, 1922. The Supreme Court held on the facts before it, that the posting of the cheque in Delhi in law amounted to payment to the assessee in Delhi. It was a case in which according to the Supreme Court there was an express request by the assessee to the Government of India to remit the cheques through the post office and consequently the post office became an agent of the assessee. After citing a number of English and Indian cases, the Supreme Court held as follows:-- 'According to the course of business usage in general to which, as part of the surrounding circumstances attention has to be paid under the authorities cited above, the parties must have intended that the cheques should be sent by post which is the usual and normal agency for transmission of such articles and according to the Tribunal's findings they were in fact received by the assessee by post,'

8. The abovequoted decision was reiterated and given effect to by the Supreme Court in its subsequent decisions in Commr. of Income-tax, Bihar and Orissa v. Patney & Co., (AIR 1959 SC 1070), Shri Jagdish Mills Ltd. v. Commr. of Income-tax, (AIR 1959 SC 1160) and Indore Malwa United Mills Ltd. v. Commr. of Income-tax (Central) Bombay, (AIR 1966 SC 1466).

9. It is, thus, clear from these decisions of the Supreme Court that it is not necessary for the post office to be treated as an agent of the payee that there should be an express request by the payee for payment through the postal system. It can be implied from the surrounding circumstances and the course of the business usage in general. The question however is as to whether on account of Section 44 of the Post Office Act, the post office must necessarily in the case of a money order be treated as an agent of the remitter and not of the payee. The payment of the amount covered under a cheque can be stopped by the drawer thereof by intimation to the bank in time before the cheque is encashed and in such an event the cheque would stand dishonoured. On this consideration it appears to have been argued before the Supreme Court on behalf of the Revenue in Commr. of Income-tax v. Ogale Glass Works Ltd. (supra) that till the cheques had been encashed there was no payment of the amounts covered by them and the mere fact that the cheques had been posted on behalf of the Government of India at Delhi did not justify the inference that the amount of the cheques were paid at Delhi in British India at the time of their posting. This contention was repelled by the Sup-reme Court which held:--

'When it is said that a payment by negotiable instrument is a conditional payment what is meant is that such pay-ment is subject to a condition subsequent that if the negotiable instrument is dishonoured on presentation the creditor may consider it as waste paper and resort to his original demand.'

10. The following passage from Benjamin on Sales, Eighth Edn., page 788, was cited with approval by the Sup-reme Court in support of the conclusion :

'The payment takes effect from the delivery of the bill, but is defeated by the happening of the condition, i.e. nonpayment at maturity.'

A passage from 'Felix Hadley & Co. v. Hadley', (1898) 2 Ch 680, which is as follows was quoted with approval:--

'In this case I think what took place amounted to a conditional payment of the debt; the condition being that the cheque or bill should be duly met or honoured at the proper date. If that be the true view, that I think the position is exactly as if an agreement had been expressly made that the bill or cheque should ope-rate as payment unless defeated by dis-honour or by not being met, and I think that that agreement is implied from giving and taking the cheques and bills in question.'

The following observation of Lord Maugham in Rhokana Corporation Ltd. v. Inland Revenue Commissioners. (1938) AC 380 at P. 399 was also considered by the Supreme Court as apposite:--

'Apart from the express terms of Section 33, Sub-section (1), a similar con-elusion might be founded on the well known common law rule as to the effect of sending of a cheque in payment of 3 debt, and in the fact that though tha payment is subject to the condition subsequent that the cheque must be met on presentation, the date of payment, if the cheque is duly met, is the date when the cheque was posted.'

11. Again, in Shri Jagdish Mills Ltd. by its successor Shri Ambica Mills Ltd. v. The Commr. of Income-tax, Bombay North, Kutch and Saurashtra, Ah-medabad (supra), the contention that there was no payment in the eye of law till cheques delivered were encashed was repelled by the Supreme Court in the following words:--

'Even if the receipts of the cheques at Baroda be treated as a conditional payment of the appellant's claims for the goods supplied to the Government the position was no better, for the simple reason that the cheques not having been dishonoured but having been duly cashed the payments related back to the dates of the receipts of the cheques and in law the dates of payments were the dates of the delivery of the cheques which was certainly in Baroda outside the taxable territory.'

Since in the case before the Supreme Court, none of the cheques had been dishonoured on presentation, it was held that the payments could not, therefore, be said to have been defeated by the happening of the condition subsequent, namely, dishonour by non-payment and that being so, there could be no question, therefore, that the assessee did not receive payment by the receipt of the cheques.

12. The principle deducible from these decisions is that where a creditor has authorised explicitly or impliedly payment by cheque through the post office and the debtor does despatch a cheque, the answers to the questions as to whose agent the post office is for the purposes of the transaction and as to what is the time and which is the place of payment are not dependent on the existence of a power in the remitter and drawer of the cheque to stop encashment thereof. In such an event unless by the exercise of the power the drawer of the cheque brings about the dishonour thereof the post office will be the creditor's agent and the time acid place of payment will be the time and place of its posting. As far as the question under consideration before us is concerned, it strikes me that there is no material difference or distinction between a payment by cheque and a transaction where payment is made by a money order. When a depositor issues a bank-cheque in favour of a person he merely orders the Bank to pay out of his deposit to him the amount mentioned therein. In the absence of any statutory provision disentitling him to do so because of the very nature of the transaction he can cancel his order by timely instructions to the Bank before the cheque is encashed. A money order similarly is 'an order for a specified sum of money, not less than, or ex-ceeding, the amounts designated by statute, made out at a money order office on a blank form prescribed by law and the post office regulations, and payable at some other money order office.' (Corpus Juris Secundum, Vol. 72, p. 298). Even in the absence of Section 44(1) of the Post Office Act, it appears to me that on general principles because of the nature of the transaction itself, which is similar in its incidents to a payment by cheque, the remitter of a money order could have had the right to stop payment by counter-manding his order, by communication to the postal authorities in time. To my mind, Section 44(1) of the Post Office Act has only made explicit the right which remitters of money orders impliedly have. In any case the fact that the remitter of a money order has been given powers by statute to counter-mand his order for payment to the payee does not render inapplicable the principle applied by the Supreme Court to bank cheques sent by post because the drawer of a cheque has an identical right though otherwise than by statute.

13. In my view, if there is an express or implied request by the landlord for payment of the amount claimed as arrears of rent, through a money order, the payment to the post office is payment to the payee unless by subsequent action under Section 44 of the Post Office Act the remitter cancels the money order. In such an event the payment shall stand thwarted by a subsequent act and shall be deemed never to have been made.

14. In support of the view taken by it, the Supreme Court in Commr. of Income-tax v. Ogale Glass Works Ltd. placed reliance on a number of English decisions wherein it had been held, taking into account the circumstances of the cases, that delivery of the cheques in question to the post office amounts to delivery to the addressee because the post office became the agent of the addressee. Those cases were attempted to be distinguished by learned counsel appearing for the assessee who contended that there was a basic difference between the Postal Regulations in England and those in India because under the law relating to the postal system in England, the remitter of a cheque through a post office bad no right to stop its delivery to the addressee whereas under the Indian Post Office Act there was such a right in the remitter provided by statute. The contention raised was noticed and repelled by the Supreme Court in Commissioner of Income-tax v. Ogale Glass Works Ltd. (supra) in the following words:--

'A good deal of stress is laid by Sri Kolah on what he says is the basic difference between the postal regulations in England and those in India and he insists that the English decisions laying down the effect of sending cheques by post should not be rigidly followed here. He points out that in England the sender of the cheque has no right to reclaim the same after it is posted and that, accordingly, immediately upon the posting of the cheques the post office becomes irrevocably the agent of the addressee and that, therefore, the delivery of the cheque to the post office is, in English Law, delivery to the addressee. But that, Sri Kolah maintains, is not the position under the Indian Post Office Act. 1898.'

'We have been taken through the different sections of that Act and the Rules made thereunder and Sri Kolah contends that under the Indian Law the sender has the right to reclaim the letter until it is actually delivered to the addressee and, therefore, until that time the post office, remains the agent of the sender and consequently the posting of a cheque cannot in India be regarded as delivery of the cheque to the addressee.

'We may, however, point out that this right of the sender, on which so much stress and importance are laid by the learned Advocate, is by no means an absolute right, for it is left entirely to the authorities to decide whether a letter once posted should be returned to the sender. This very narrow and qualified right can hardly be regarded as bringing about a position so different from that prevailing in England as to make the English decisions wholly inapplicable.''

'..... It is, however, not necessary to pursue this line of reasoning any further for the principles underlying the English decision are clearly consonant with the provisions of the Indian Law. There can be no doubt that as between the sender and the addressee it is the request of the addressee that the cheque be sent by post that makes the post office the agent of the addressee.

'After such request the addressee cannot be heard to say that the post office was not his agent and, therefore, the loss of the cheque in transit must fall on the sender on the specious plea that the sender having the very limited right to reclaim the cheque under the Post Office Act, 1898, the post office was his agent, when in fact there was no such reclamation.'

15. A similar argument was again rejected by the Supreme Court in Shri Jagdish Mills Ltd. v. The Commr. of Income-tax, Bombay North, Kutch & Sau-rashtra, Ahmedabad (supra) as would ap-pear from the following passage:--

'Learned counsel for the appellant further drew our attention to certain provisions of the Post Office Act, 1898 and the postal regulations framed thereunder and tried to argue that the post office was really the agent of the Government and the Government could recall the cheques at any time before they reached the appellant at Baroda. All these provisions were discussed by this Court in (AIR 1954 SC 429) and it was held that these provisions did not help the assessee.'

16. The provisions of the Post Office Act and the postal regulations on which reliance was placed in support of the view canvassed before the Supreme Court appear to have been Section 18(1) of the Post Office Act and Rule 201 of the Rules framed thereunder. Section 18(1) provides that 'the Central Government may, by rule, provide for the re-delivery to the sender, without reference to the consent of the addressee and sub-ject to such conditions (if any) as may be deemed fit, of any postal article in the course of transmission by post.' Under Rule 201 the sender of a postal article is required to apply in writing for recall and redelivery to him of any such article while in the course of transmission, to the postal authorities disclosed in that rule. It is apparently because of Sub-rule (h) of Rule 201 that the Supreme Court described the right of the sender of a postal article to reclaim it without reference to the consent of the addressee as a qualified one. Sub-rule (h) is as follows:--

'When the application reaches such an authority as is named in condition (a), that authoruy may order the redelivery to the sender of the postal article upon being satisfied that the applicant is the sender, and that sufficient reasons have been given for the redelivery otherwise the postal article shall be sent at-once to the addressee.'

Thus the postal authorities have the right to refuse in certain cases a request by the sender for redelivery of a postal article to him while in the course of transmission Under Section 44(1) of the Post Office Act and Rule 124 the post office has no right to refuse to com ply with an order counter-manding payment of a money order. No doubt there does exist this distinction between a money order and other postal articles but this to my mind does not render the principles expounded by the Supreme Court in Commr, of Income-tax, Bombay v. Ogale Glass Works Ltd., inapplicable to money orders. What to my mind is of relevance is that neither in the case of money orders nor in the case of other postal articles the oavee or the addressee, as the case might be has the right to prevent the sender from exercising the right of stopping payment of the money orders or recalling the postal articles. In this connection I wish again to point out that at far as bank cheques are concerned the drawers thereof have an unqualified right to counter-mand their orders for their encashment, in my judgment as soon as the remitter of a money order places an order with the post office for payment of a specified amount to a payee named without authorisation express or implied for payment by money order, the relationship of principal and agent between the remitter and the post office comes into existence. The post office does not become the statutory agent of the remitter by reason of Section 44(1) of the Post Office Act which comes into play only after he has constituted it his agent by choice exercised already. To my mind, Section 44(1) of the Post Office Act has no relevance to the determination of the question as to whether in respect of a particular transaction the post office is the agent of the remitter or of the payee of a money order. If the learned Judges who decided Govind Rao v. Kanhaiya Lal and Rahat Ali v. Husain Fatima Bibi intended to take a contrary view, with due deference to them. I differ. Further, I find myself unable to concur with the view that because of Section 44(1) of the Post Office Act the post office must necessarily be treated as the agent of the remitter and in no case of the payee.

17. Moreover, if the circumstances so warrant, the post office may in a given case, be treated as a common agent both of the creditor as well as the debtor. The legal concept of a common agent of both parties to a transaction is not without judicial precedent. The decision of the House of Lords in Dunlop v. Hig-gins, ((1848) 1 HLC 381) was explained by Thesiger, L. J., in Household Fire and Carriage Accident Insurance Co. v. Grant, ((1879) 4 Ex D 216) in the following words:--

'I see no better mode than that of treating the post office as the agent of both parties, and it was so considered by Lord Romilly in Hebb's case, (Law Rep. 4 Eq. at page 12), when in the course of his judgment he said:-- 'Dunlop v. Higgins decides that the posting of a letter accepting an offer constitutes a binding contract, but the reason of that is, that the post office is the common agent of both parties'.' Thus, assuming that by reason of Section 44(1) of the Post Office Act, the post office is the statutory agent of the tenant, it can still be held to be the agent of the creditor also provided the circumstances of the case justify that inference. We are thus free to consider the question before us unhampered by Section 44(1) of the Post Office Act.'

18. Before I proceed to consider the question referred to us with reference to the peculiar facts of the case, reference might usefully be made to certain decisions which provide useful guidance in the matter.

19. In Norman v. Rickets, ((1886) 3 TLR 182) the creditor carrying on business as milliner in Bond Street wrote to one of the customers who resided in Suffolk saying, 'the favour of a cheque within a week will oblige.' The customer upon such request sent a cheque for the amount by post. The cheque was stolen in transit and was paid by the Bank to the thief. There was no express request to send the cheque by post but nevertheless it was held that the sending of the cheque by post was payment, On appeal the Court of Appeal upheld the trial court and observed:--

'An express request to send through the post was not necessary. If what the plaintiffs said amounted to a request to send the cheque by the post, then there was payment. To answer that question the existing circumstances must be looked at. A milliner in London wrote to a lady in Suffolk asking for a cheque. Did that letter reasonably lead the lady to suppose, and did she suppose that she might send the cheque by post? She could not suppose that she was to send a messenger with it or come to London herself. The only reasonable and proper meaning to be attached to it, whatever Madame Phillipe might have intended, was that she was to send the cheque by post. She, therefore, reasonably believed that she was invited to send her cheque by post, and she did what she was asked to do. Consequently what she did amounted to payment.'

20. This decision was cited with approval by the Supreme Court in the Commissioner of Income-tax v. Ogale Glass Works Ltd. (supra) and in Shri Jagdish Mills Ltd. by its successor Shri Ambika Mills Ltd. v. Commr. of Income-tax, Bombay North, Kutch, Sau-rashtra and Ahmedabad (supra).

21. The facts leading to the deci-sion in Shri Jagdish Mills Ltd. v. Commissioner of Income-tax (supra) were that in the relevant accounting years, tenders were invited by the Government of India for some of the articles manufactured by the assessee at Baroda and the assessee submitted the tenders to the Government of India which accepted the tenders and placed orders for supply of goods manufactured by the assessee. These orders were accepted by the assessee at Baroda and delivery of the goods manufactured by it, to the Government of India were pursuant to the said order to be and were in fact 'F.O.R., Baroda'. Payments for the goods supplied by the .assessee to the Government was to be by cheques but there was no express request emanating from the asses-see for the despatch of those cheques by post. On these facts the question before the Supreme Court was as to whether payment of the amounts covered by the cheques was at Baroda or at Delhi where the cheques were posted. Placing reliance on its observations in Commr. of Income-tax v. M/s. Ogale Glass Works Ltd. (supra), which have been extracted in an earlier part of this opinion, the Supreme Court held as follows:--

'The stipulation in the contract between the appellants and the Government was that the payment would be made by cheques. The Government of India was located in Delhi and the cheques would be necessarily drawn by it from Delhi. Could it be imagined that in the normal course of affairs, the cheques thus drawn in Delhi would be sent by a messenger to Baroda so that they may be delivered to the appellant at Baroda? Or that the officer concerned would come to Baroda himself and hand the same over to the appellant in Baroda? The only reasonable and proper way of dealing with the situation was that the payment would be made by cheques which the Government would send to the appellant at Baroda by post. According to the course of business usage in general which appears to have been followed in this case, the parties must have intended that the cheques should be sent by post which is the usual and normal agency for transmission of such articles, If that were so, there was imported by necessary implication an implied request by the appellant to send the cheques by post from Delhi thus constituting the Post Office its agent for the purposes of receiving those payments.'

22. A similar conclusion was arrived at by the Supreme Court in the Indore Malwa United Mills Ltd. v. The Commr. of Income-tax (Central), Bombay (supra) where it was held as follows:

'Now, if by an agreement, express or implied, between the creditor and the debtor or by a request--express or implied, by the creditor, the debtor is authorised to pay the debt by a cheque and to send the cheque to the creditor by post, the post office is the agent of the creditor to receive the cheque and the creditor receives payment as soon as the cheque is posted to him.'

In this decision again there was no evidence that there was an express request by the assessee for the cheques being sent by the post. Nonetheless, the Supreme Court held that, in the circumstances of the case, such a request should be implied. Placing reliance on its earlier decision in Shri Jagdish Mills Ltd. v. Commr. of Income-tax, Bombay (supra) the Supreme Court held:--

'Having regard to the fact that the assessee was of Indore and the office of the Government of India was at New Delhi, the parties must have intended that the Government would send the cheques to the assessee by post from New Delhi and this inference is supported by the fact that the cheques used to be sent to the assessee by post. In the circumst-ances there was an implied agreement between the parties that the Government of India would send the cheques to the assessee by post.'

23. From an analysis of these decisions two principles emerge: The first is that if the creditor and the debtor reside at two different places served by postal system, from the verv fact that the creditor makes a demand through the post, an authority to the debtor to meet his obligation through the post is implied. This principle, to my mind is the foundation of the decision in Norman v. Rickets (supra) which as already stated above, has met the approval of the Supreme Court. From the facts of the case, as reported it does not appear that there was any evidence showing that in any earlier transaction the debtor had met her obligations to her creditor by post. The only two circumstances present before the Court were: firstly that the creditor and the debtor resided at two different places in England and, secondly, that the creditor had made the demand for payment by means of a letter sent through the post. Thus, it appears to me that the Court in this case inferred an implied authority to the debtor to send the cheque bv post merely because a demand had been made by post. This principle to my mind is based on sound logic. If a trader sends me a reminder of an outstanding bill through a messenger, in the absence of any intention expressed to the contrary, I believe I would be justified in assuming that the trader, by implication has authorised me to send the amount outstanding through that messenger. Extending this principle, if a creditor who resides in a different town, makes a demand from his debtor by means of a letter despatched through the post he impliedly invites the debtor to meet his obligations through the post. In this connection it may be borne in mind that 'the government exercises a governmental power for the public benefit in the establishment and operation of the postal money order system and is not engaged in commercial transactions, notwithstanding it may have some aspects of commercial banking.....' (Corpus Juris Secundum Vol. 72, page 298) and further that the State has a monopoly in post offices as a consequence of which the debtor has no choice as between competing postal organisations.

24. Another principle that emerges from the two Supreme Court decisions cited above is that if the debtor and the creditor reside in two different places, served by post offices and payments have to be by cheques, then in the absence of anything to the contrary, an implied agreement can be culled out authorising the debtor to despatch the cheques through the post office which will be treated as the creditor's agent. This has come to be recognized as payment 'according to the course of business usage in general'. This principle can be extended to the case of payments made through money orders. If the creditor and the debtor reside at two different places so that the debtor cannot reasonably be expected to make cash payments personally or through a messenger, then in the absence of a stipulation to the contrary it may be assumed that the debtor is impliedly authorised to pay his debt through money orders. In such cases deposit of the cash at a postal money order office will be treated as payment to an agent of the creditor made in accordance with 'the ordinary usages of mankind' to borrow the words used by Lord Herschell in Henthorn v. Fraser ((1892) 2 Ch D 27).

25. Coining to the facts of the case before us, we find that while the tenant resided in the town of Kanpur, the landlords lived in a village in the interior of the district served by post office. There is no evidence on record showing that the respondent had ever gone to the plaintiff's village himself to pay the rent due from him or sent it through a messenger. On the other hand, from the testimony of Sri Ram P.W., it transpires that he used to personally collect the rent in the town of Kanpur. The official survey map of the Kanpur District reveals that Mandhana, where the postal money order office which serves the plaintiff's village is situate is twelve miles from the town. The survey map further reveals that there is a railway station at Mandhana but none at the plaintiffs' village which is at a distance of about half a mile from there. The arrears of rent was a petty amount of Rs. 35 only. Could the appellants, in the circumstances of the case, have expected the respondent either to undergo the trouble of making a journey by rail and on foot to the plaintiffs' village or to send a messenger there to pay the amount after incurring about an equal amount in expense The answer to the question must to my mind be in the negative. The very fact that the appellants demanded the arrears of rent by a letter sent through post in my opinion, amounted to an authorisation or invitation to the respondent to make the payment through the post office. Judicial notice must be taken of the fact that tenants in this country normally and usually remit their rents to out-station landlords by money orders. It has come to be recognized as payments made in 'accordance with the ordinary usage of mankind'. The facts of the instant case are closely akin to those in Norman v. Rickets (supra). Just as in that case handing over of a letter containing the cheque demanded was considered to be payment to an agent of the creditor, so also in the present case handing over of the arrears of rent in cash at the post office must be held to be payment to the appellant's agent, or in the alternative to a common agent of both parties and thus by legal implication to the appellants.

26. There is yet another significant circumstance in this case having a bearing on the question that is being considered. Having received the notice of demand, as already stated, on the 6th of August, 1963, the tenant sent a reply by registered post, acknowlegment due, to the plaintiffs' counsel, who had sent it, intimating that the arrears of rent amounting to Rs. 35 was being sent by money order which the plaintiffs were requested to accept. This letter exhibit A-2 was proved by the defendant. There is no evidence on record to show that at any time the plaintiffs replied to this let-ter intimating that in case the defendant chose to remit the amount by a money order, he would do so at his own risk if the amount did not reach the plaintiffs within one month of the notice of demand. By their silence, I am inclined to hold, the plaintiffs approved and implied-ly authorised the defendant's remitting to them the arrears of rent demanded by means of a money order. That the respondent sent the money order without waiting sufficiently long for a reply from the plaintiffs makes no difference because they in fact never did reply. I am consequently of the opinion that, on the facts and circumstances of the case, the defendant had an implied authority from the plaintiffs to pay the amount to them by means of a money order and as soon as the defendant handed over the amount to the post office, to be remitted by money order, he was discharged of his obligation in that respect. The defendant had no control over the post office and if there was any delay caused in transit, the defendant cannot be held responsibly for it and the plaintiffs, in the circumstances of the case cannot be heard to complain about it.

27. Apart from basing my answer on the principle of agency, there is yet another principle that leads me to the same conclusion. I have already held, for the reasons given that payment by means of a money order was, in the circumstances of the case, impliedly authorised by the plaintiffs. The defendant when he remitted the contractual arrears of rent by money order, discharged his obligation under Section 50 of the Indian Contract Act as would appear from illus-tration (d) to that provision: (see Commissioner of Income-tax, Bombay South v. Ogale Glass Works Ltd. (supra).

28. My answer to the question referred to this Bench consequently is that, on the facts and in the circumstances of the case the tenant-respondent could not be said to have committed a defauli under Section 3 (1) (a) of the Act in respect of the payment of Rs. 35 which he sent to the plaintiffs-landlords by a money order well within time but which had reached the landlords after the expiry of thirty days.

M.N. Shukla, J.

I agree and have nothing to add.

K.B. Srivastava, J.

I agree. BY THE COURT :

29. Our answer to the question referred is that, on the facts and in the circumstances of the case, the tenant-respondent could not be said to have committed a default under Section 3 (1) (a) of the Act in respect of the payment Rs. 35 which he sent to the plaintiffs Landlords by a money order well within time but which had reached the landlords after the expiry of thirty days.


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