1. Plaintiff brought a suit against the defendant to recover the property which was sold by the latter to the former. The matter in suit was compromised; the terms of the compromise in so far as they are material to this appeal are that the defendant should pay into court a certain sum of money within the 13th of January 1913, that he should get back the promissory notes exhibited in the suit and return them cancelled to the plaintiff within the said date. The defendant paid the money on the 7th January 1913, that is, within 6 days of the time fixed for payment but he did not get back the notes from the court within the time. He took them out subsequently and deposited them in court on the 4th February, 16 days after the time given to him. On his applying for entering up satisfaction of the decree, the courts below held that as the term of the consent decree, relating to the promissory notes was not complied within time, his application should be rejected.
2. It is contended before us that as the notes were in Court, the defendant committed no default in not having deposited them in time. We cannot accede to this argument. The order bound the defendant to get their return and to have them cancelled. He has undoubtedly disobeyed that clause in the compromise. The further question arises whether such a failure disentitles him from asking that the Court should relieve against the penal clause relating to the notes in question. This aspect of the question and the authorities bearing on it were apparently not placed before the learned Chief Justice who rejected the appeal in the admission Court. If the learned Chief Justice had held that in the exercise of his discretion he was not prepared to give relief to the defendant who had undoubtedly committed a default we would not interfere in appeal. But the view taken by the learned Chief Justice apparently owing to the question not having been argued before him is, that Courts have no power to go behind the terms come to between the parties. We feel constrained to differ from this conclusion. It was held in Nagappa v. Venkat Rao I.L.R. (1901) M. 265 that the fact that a compromise is embodied in a decree of the Court is not a reason for holding that the ordinary incidents of a contract will not apply to it. In
3. Ana Sheik Mohideen Tharagan v. Vadivelu, Gianambia Pillal (1911) M.W.N. 92 a case practically on all fours with the present one, the 'learned judges held that a penalty in a contract of compromise will be relieved against. We regard the provision regarding possession to be given to the plaintiff, if the conditions are not complied with within the time limited, as penal, the object being to secure the prompt payment of the money by the defendant. The money itself was paid before the time fixed. The provision for the return of the promissory notes was intended to safeguard against their possible fraudulent negotiation. As they were in the custody of the Court, there was no possibility of the plaintiff suffering in this way, from their non-return within the time limited. Time in such cases is not ordinarily of the essence of the contract and when the interests of third parties are not affected justice will be defeated by a too strict adherence to the wording of the compromise without regard to the object intended to be secured by it. In Raja Kumara Venkataperumal Rajah Bahadur v. Thatha Ramasamy Chetty I.L.R. (1911) M. 75 quoted by Mr. Seshachariar, the learned Judges held that a compromise in addition to being a contract has the further qualification of being an adjudication so as to attract the provisions relating to res judicata. - That case does not affect the present question.
4. In this case, there is no allegation that the rights of the third parties have been prejudiced; the notes were in Court. We think that this is a fit case for relieving the defendant from the penalty; but we can only do so on conditions:
(a) He must pay the sum of Rs. 792-6-0 with interest at 6 percent, from 21st June 1911 to 13th January 1913 and with interest at 9 per cent, from that date to the date of payment within 6 weeks from the date of this order.
(b) He must pay all the costs incurred by the respondent in all the courts.
(c) Satisfaction of the decree will be entered on his complying with the above conditions.
(d) If the money including interest and costs is not paid within the time mentioned his application will be dismissed with costs in all the courts.