1. The appellants, who belong to a trading family, contraeted to purchase from the respondents, a similar firm, 50 bales of yarn manufactured by the Madura Mills and actually took delivery of 6 bales. Owing to a fall in prices in the market the appellants were unwilling to reseive the remaining 44 bales on the terms agreed upon. The contract was thereupon cancelled on the condition that appellants paid Rs. 5,000 to the respondents to make good their losses upon their contract with the Mills. These Rs. 5,000 were included in a larger sum of Rs, 10,800 which represented the aggregate amount found to be owing by the appellants to the respondents on a settlement of accounts made on February 2nd, 1919, and an unconditional promise to pay Rs. 10,800 to respondants' order on demand was written in the appellant's ledger, (Exhibit A), kept by the respondents and was signed by the appellants.
2. At the trial in the Sub-Court the appellants sought to prove by oral evidence that there was a contemporaneous agreement, that, in the event of the Mills consenting to cancal their contrast with the respondents, the appellants should be excused from their liability to pay Rs. 5,000 to the respondents.
3. The Subordinate Judge refused to admit such evidence, holding that to do so would be tantamount to admitting parol evidence of an agreement in defeasance of the written contract contained in Exhibit which was an unconditional contract to pay Rs. 5,000 on demand.
4. He held that the evidence sought to be admitted was made inadmissible by Section 92 of the Indian Evidence Act. He further held that the letter (Exhibit II) written on the same date as the promise to pay in Exhibit A did not amount to a written agreement varying the terms of the first agreement.
5. Mr. Anantha Krishna Iyer argued that the evidence that was excluded was evidence of a separate oral agreement as to a matter on which Exhibit A was silent and which was not inconsistent with its terms. He drew our attention to the case of Motabhoy Mulla Essabhoy v. Mulji Haridas 29 Ind. Cas. 223 : 39 B. 399 : 17 M. L. T. 402 : 28 M. L. J. 589 : 13 A. L. J. 529 : 19 C. W. N. 713 : 21 C. L. J. 507 : 17 Bom. L. Rule 460 : 2 L. W. 524 : (1915) M. W. N. 522 : 42 I. A. 103 (P. C.) as being an instance of the application of proviso (2) of Section 92. Their Lordships of the Privy Council in that case want into the evidence observing that it would not be satisfactory to decide against the defendant on a view which might have been obviated by a more amendment of the pleadings. So in this case I have cousidered, whether, if the respondents' suit had not been based on the assounts but had been brought to recover damages on account of the appellant's breach of countrast in respect of the 44 bales which they refused to receive, it would have been open to them to plead in mitigation of the damages due upon their breach of contrast that the respondents had not suffered to the extent claimed by them owing to the Madura Mills having excused them from their liability to receive the remaining bales from the Mills. After full consideration I have some to the conclusion that the result would be the same. When the promise in Exhibit A to pay Rs. 10,800 to respondents' order ondemand was signed there was an unconditional agreement to pay Rs. 5,000 as liquidated damages for the cancellation of the order for the remaining 44 bales. No doubt Exhibit A is not a very formal document and there are no calsulations to show how the firgure Rs. 5,000 was arrived at. But on the strength of the promise to pay on demand, the respondents might have called on the appellants to pay the sum of Rs. 10,800 the next minute after they had signed Exhibit A and it would then have been inconsistent with the unconditional nature of that promise to set up a contemporaneous undertaking that the respondent would re pay the sum of Rs. 5,000 paid as compensation in the event of the Mills allowing them to countermand their order, as to do so would be to destroy the finality of the settlement then made which was irrespective of the respondents' liability to the Mills. In the respondents' letter, Exhibit I, there is no acceptance of the proposal in Exhibit II that the sompensation shoud be returned if the Mills were prepared to cancel the order for bales of quality Nos. 50 and 44. In Motabhey Mulla Essabhoy v. Mulji Haridas 29 Ind. Cas. 223 : 39 B. 399 : 17 M. L. T. 402 : 28 M. L. J. 589 : 13 A. L. J. 529 : 19 C. W. N. 713 : 21 C. L. J. 507 : 17 Bom. L. Rule 460 : 2 L. W. 524 : (1915) M. W. N. 522 : 42 I. A. 103 (P. C.) the separate oral agreement that the money paid on December 23rd, 1907, should be treated as a pre-payment in lieu of the advance due on January 30th, 1908, and that in satisfaction of the promissory note of December 23rd the payee should give the holder an seknowledgment of the receipt of the instalment due on the later date was held to be an agreement which could be proved under proviso (2) to Section 92. There the oral agreement was quite district from the agreement under the promissory-note and not inconsistent with it. The facts of the case before us are more analogous to those in Hitchings and Coulthurst Co. v. Northern Leather Co, of America (1914) 3 K. B. 907 : 83 : L. J. K. B. 1819 : 20 Com. Cas. 23 : 30 T. L. Rule 688 where Bailbashe, J. held that an oral agreement that the defendant would not pay if the goods supplied to his Company should be unequal to sample was an agreement in defeasance of the contrast to pay contained in the promissory note, and evidence to prove it was inadmissible.
6. In Remjibun Seroway v. Oghore Nath Chatterjee 25 C. 401 : 2 C. W. N. 188 : 13 Ind. Dec. (N. S.) 266 there was an attempt to set up an oral agreement restricting the absolute engagement in a promissory note to pay on demand and to bring it under provise (3) which relates to agreements conatituting a condition precedent to the attaching of an obligation under the contract, and it was ruled out as being an agreement to postpone the legal obligation to perform a promise which was absolute in its terms.
7. Although the alleged agreement in the present case not bto enforce the absolute promise to pay on demand is not put forward as a condition presedent to the attaching of the obligation to pay, it is an agreement which would have the effect of converting an absolute unconditional promise into a conditional, defeasible one.
8. The other cases cited in the arguments are not of much assistance. Goseti Subb-Row v. Variganda Narasimham 27 M. 368 is an authority on the application of proviso (4). Jnanendra Mohan Choudhury v. Gopal Das Choudhury Section C. W. N. 923 : 31 C. 1026 is an authority on Section 91. Kamla Suhai v. Nandan Mian 2 Ind. Cas. 13 : 11 C. L. J. 39 deals with an agreement de have Section 92 altogether, as it provided for the disaharge of a debt secured by a mortgage deed by means of putting the mortgages in possession and letting him enjoy the profits of the mortgaged property. Jugfanund Missey v. Nerghan Singh 6 C. 433 : 7 C. L. Rule 347 : 3 Ind. Dec. (N. S.) 282 simply laid down that evidence of part performance of a contract negatived a plea that there was an oral agreement soustituting a condition preedent to the contract becoming enforceable.
9. I think that the appellants' contentions are not acceptable and that the appeal should be dismissed with costs.
Sadasiva Aiyir, J.
10. I entirely agree both with the conclusion of my learned brother and with his reasons for arriving at that conclusion.