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P.M.V.P. Pappu Reddiar (Deceased) and anr. Vs. S.A. Pichu Aiyar - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1938Mad493; (1938)1MLJ829
AppellantP.M.V.P. Pappu Reddiar (Deceased) and anr.
RespondentS.A. Pichu Aiyar
Cases ReferredDooli Chand v. Ram Kishen Singh
Excerpt:
.....case of the many cited for the respondent, was the money, which the courts held could not be recovered, paid in execution of a satisfied decree. it is the existence of fraud, the dishonest obtaining of the money after the decree was satisfied, that distinguishes the present case from those cited at the bar. although a fraudulent decree-holder can, under the code, execute his satisfied decree where the adjustment has not been certified, his liability under the substantive law remains. 65, their lordships after indicating that the facts suggest that the decree there was a satisfied decree, observe, that alone would be a, ground upon which the respondents must be held disentitled to retain the money they have received'.10. similarly, in dooli chand v. ram kishen singh ,after stating..........497 : l.r. 50 indap 162 : i.l.r. 4 lah. 284 (p.c.).5. thus the 'owner's right to recover back the money paid under compulsion does not rest, as assumed in the two earlier' decisions, merely upon justice and equity founded upon the english analogy, but is a statutory right expressed in terms of an indian act. what then is the true nature of the action brought to recover such money back? the person obtaining payment under force of execution proceedings, that is, under coercion within the meaning of section 72, is a wrongdoer, as described by their lordships in kanhaya lal v. national bank of india ltd. (1913) 25 m.l.j. 104 : l.r. 40 indap 56 : i.l.r. 40 cal. 598 (p.c.). this would suggest, contrary to the view taken by varadachariar, j., that the liability is one in tort. but by whatever.....
Judgment:

Venkatasubba Rao, J.

1. The question which this Letters Patent Appeal raises is an important one, and the facts divested of all that is immaterial, may be shortly stated. The first defendant filed a suit against defendants 7 and 8, got their properties attached before judgment and obtained a decree in 1923 in due course. Defendants 7 and 8 sold in 1924 under Ex. A the properties in question to the second defendant. In the sale-deed the vendors (that is, defendants 7 and 8) disclosed the attachment that, had been effected and undertook to get the properties sold released from the attachment. In 1925, by virtue of a transaction we need not go into, the first defendant, to whom about Rs. 5,000 was due under his decree, received in full satisfaction of his claim Rs. 4,500 (that is, the concurrent finding of the Courts below accepted by Varadachariar, J.), in pursuance of an agreement with the judgment-debtors, namely, defendants 7 and 8. In 1927 the plaintiff obtained a mortgage of the suit property from the second defendant. Though the first defendant's decree was fully satisfied as stated above, he failed to enter up satisfaction and fraudulently proceeded to execute the decree. He brought the properties mortgaged to the plaintiff to sale and purchased them himself in the name of his clerk on 16th September, 1927. The plaintiff made the statutory deposit under Order 21, Rule 89, Civil Procedure Code and got the sale set aside. The present suit has been brought by him to recover from various defendants, of whom we are concerned only with the first defendant, the amount which he was obliged to pay into Court for getting the sale avoided. Varadachariar, J., agreeing with the Courts below, negatived the plaintiff's claim as against the first defendant.

2. Several contentions were raised for the appellant and disallowed by the learned Judge. One of them was that the first defendant's liability was founded on tort, and that is the only contention that has been pressed before us. There can be no doubt that under the law as declared by the Judicial Committee, a person making a payment to rid himself of unlawful interference with his property can recover the money back. The principle on which this rule rests, has been clearly expounded in four decisions, to none of which the learned Judge's attention was called. In the first two cases, their Lordships stated that under the English Common Law, a payment to get rid of wrongful interference would be involuntary, being made under compulsion of law, and held that in this country, as in England, an owner may bring an action to recover back the money so paid Fatima Khatoon Chowdrain v. Mahomed Jan Chowdry (1868) 12 M.I.A. 65 and Dulichand v. Ramkishen Singh . In the two later cases, the principle was applied not merely on the analogy of English law and on grounds of justice and equity but as* resting upon a statutory right conferred by an express provision of the Indian Contract Act. Section 72 of that Act provides inter alia that a person to whom money has been paid under coercion must repay it. Formerly, the view that prevailed in India was, that the word 'coercion' in this section meant the same thing as 'coercion' as defined in Section 15 and therefore no act was coercion unless it was done 'with the intention of causing any person to enter into an agreement', as required by the definition. That view, their Lordships have declared, is wrong. Lord Moulton delivering the judgment observes:

It would be to make nonsense of the statute if it were to be taken to mean that 'coercion' in a legal sense could only exist if the object was to bring about a contract. Indeed such an interpretation would render the Act inconsistent with itself.

3. Then, after quoting Section 72, which as already stated enacts that a person to whom money has been paid under coercion must repay it, His Lordship goes on to say:

It is impossible to contend that the word 'coercion' referred to in this section...is 'with the intention of causing any person to enter into an agreement'. The word 'coercion' must therefore be there used in its general and ordinary sense as an English word and its meaning is not controlled by the definition in Section 15'. Kanhaya Lal v. National Bank of India Ltd. (1913) 25 M.L.J. 104 : L.R. 40 IndAp 56 : I.L.R. 40 Cal. 598 (P.C.)

4. The last mentioned case went tip before the Board again and Lord Dunedin re-affirmed this view, observing:

The right here sought to be enforced is a statutory right expressed in terms of Section 72 of the Contract Act, and this Board has already held that the circumstances gave rise to a statutory right.' Kanhaya Lal v. National Bank of India Ltd. (1923) 45 M.L.J. 497 : L.R. 50 IndAp 162 : I.L.R. 4 Lah. 284 (P.C.).

5. Thus the 'owner's right to recover back the money paid under compulsion does not rest, as assumed in the two earlier' decisions, merely upon justice and equity founded upon the English analogy, but is a statutory right expressed in terms of an Indian Act. What then is the true nature of the action brought to recover such money back? The person obtaining payment under force of execution proceedings, that is, under coercion within the meaning of Section 72, is a wrongdoer, as described by their Lordships in Kanhaya Lal v. National Bank of India Ltd. (1913) 25 M.L.J. 104 : L.R. 40 IndAp 56 : I.L.R. 40 Cal. 598 (P.C.). This would suggest, contrary to the view taken by Varadachariar, J., that the liability is one in tort. But by whatever name the action may be called, it must now be taken as settled beyond doubt, that an owner may bring an action to recover back the money he has so paid.

6. This being the true conception, does the fact that the payment made here was under Order 21, Rule 89, Civil Procedure Code, remove the case from the operation of this principle? Mr. Champakesa Aiyangar for the respondent strongly relies upon the ratio decidendi of Kummakntty v. Neelakandan Nambudri : AIR1930Mad921 , approved and followed by the Full Bench in Krishna Aiyar v. Arunachalam Chettiar : (1935)69MLJ349 . In the former case, it has been held that Order 21, Rule 89 is inconsistent with the notion that payment can be made either under protest or coupled with conditions. True, but the whole judgment proceeds upon the footing, first that there was a subsisting decree, that is, subsisting in fact and secondly, there was a decree-holder, one who really answered that description. The principle as stated in that very decision is, once 'the decree debt is discharged and the decree-holder's remedy is gone', it would be improper for the person paying the money to claim it back. That this is the idea underlying the judgment, will be manifest on a reading of it and it is most significant that in not a single case of the many cited for the respondent, was the money, which the courts held could not be recovered, paid in execution of a satisfied decree. It is the existence of fraud, the dishonest obtaining of the money after the decree was satisfied, that distinguishes the present case from those cited at the Bar. This difference is fundamental and ought not to be ignored. Order 21, Rule 89 assumes the existence of a 'decree' and of a 'decree-holder', and where the very foundation is gone, namely? a subsisting decree, it would be futile to contend that the decisions which refer to unconditional payment can apply.

7. It has been contended that in the Privy Council cases cited above, the money was paid to prevent a sale and not after the sale; but that is a distinction without a difference. As their Lordships pointed out in Kanhaya Lal v. National Bank of India Ltd. (1913) 25 M.L.J. 104 : L.R. 40 IndAp 56 : I.L.R. 40 Cal. 598 (P.C.), already quoted, the greater or less probability of a sale taking place does not affect the real principle; nor is there any reason to hold that the position is altered by the sale having actually taken place.

8. The contention again that the decree was executable under the Law of Procedure, satisfaction not having been reported, is utterly beside the point. Although a fraudulent decree-holder can, under the Code, execute his satisfied decree where the adjustment has not been certified, his liability under the substantive law remains. When the rights of parties are in question, a contention based on the technicality of procedure law seems utterly irrelevant.

9. It may be of interest to note, though that fact has not much bearing on our decision, that in Fatima Khatoon Chowdrain v. Mahomed Jan Chowdry (1868) 12 M.I.A. 65, their Lordships after indicating that the facts suggest that the decree there was a satisfied decree, observe, 'that alone would be a, ground upon which the respondents must be held disentitled to retain the money they have received'.

10. Similarly, in Dooli Chand v. Ram Kishen Singh , after stating that the appellant obtained a decree in question upon a debt which had been already satisfied, their Lordships observe:

He has, therefore, received it twice over and it is obvious in such a case that it is unreasonable that he should hold the money paid to him under compulsion by the respondents.

11. In the result, we allow the appeal and pass a decree in favour of the plaintiff against the first defendant for Rs. 1,172-4-6 with interest thereon at 6 per cent, from date of plaint and costs throughout. The decree against defendants 7 and 8 passed by the learned Judge is vacated. The order of the lower appellate Court directing the plaintiff to-pay the first defendant's costs of the appeal before it is also set aside.


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