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Lakshumanan Chettiar and ors. Vs. Bommachi Naicker and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Judge
Reported in32Ind.Cas.416
AppellantLakshumanan Chettiar and ors.
RespondentBommachi Naicker and ors.
Cases ReferredRamasami Naick v. Ramasami Chetti
Excerpt:
.....the promisor's liability to pay is, i think, sufficient to raise an inference that the real consideration for the promise to pay with interest at the stipulated rate was forbearance on the part of the creditors to take further proceedings against the zemindari and as the decree-holders did abstain for some time taking further proceedings that would, i think, be sufficient consideration. parthasaradhy aiyangar that there was a failure of consideration;.....two documents, exhibits e and el, on 10th march 1897 and a third document on 26th november 1897, exhibit e2. exhibit e recited that certain villages of the zemindari had been sold for the decree-debts due under original suits nos. 34 of 1894, 43 of 1894 and 33 of 1893 (the decree now in question) and provided that these villages should be reconveyed to the 1st defendant for rs. 30,000 subject to the said mortgages, and hypothecated the zemindari for this amount. exhibit el of the same date recited that the decree holders in the three suits first mentioned had advanced rs. 75,000 to the 1st defendant to enable him to give security to get possession of the zemindari pending the appeal to the privy council from the decision in sivasubramania naicker v. krishnammal 18 m.k 287 and had.....
Judgment:

John Wallis, C.J.

1. The main question argued before us in this appeal is as to whether the deed, Exhibit A, is without consideration in so far as it imposes a personal liability upon the 5th defendant, who was then in the line of succession and subsequently in 1905 succeeded to the zemindari of Ammayanaickanoor. The peculiar tenure of the zemindari was established in Sivasubramania Naicker v. Krishnammal 18 M.k 287 and the inability of the reversioners to mortgage their chance of succession in Ramasami Nath v. Ramasami Chetti 17 M.L.J. 201, subsequently to the date of the plaint mortgage. Under the decision in Sivasubramania Naicker v. Krishnammal 18 M.k 287 each zemindar takes a life-estate and as pointed out in Ramasami Naik v. Ramasami Chetti 30 M.k 255, this fact creates considerable difficulties in the way of mortgaging the zemindari. In that case it was held that the mortgage executed by the present 5th defendant and other reversioners was not binding on him after he succeeded to the zemindari but that he was bound by the personal covenant to pay after he succeeded and that the covenant had been specially inserted to meet the difficulties in the way of enforcing creditors' claims against the zemindari which arose in consequence of the decision in Sivasubramania Naicker v. Krishnammal 18 M.k 287, owing to the fact that at the date of that decision and for some time afterwards the holder of the zemindari was not liable for the debt which it was sought to recover. That case arose out of a consent in Original Suit No. 43 of 1894 which was brought upon another mortgage and to which the present 5th defendant was a party, whereas the present claim arose out of a mortgage of other properties not included in the zemindari which was the subject of Original Suit No. 33 of 1893, in which the present 5th defendant was impleaded as the 6th defendant and in which it was sought to recover the amount due under the mortgage by sale of the mortgaged properties and also on the liability of the zemindari. The defendants Nos. 3 to 6 in that suit were ex parte and the contesting defendants Nos. 1 and 2 entered into a ra inama, by which it was provided that the amount due should be paid by defendants Nos. 1 and 2 in 12 months with compound interest and that the mortgaged properties and the zemindari should be held liable therefor and that if the zemindari should come into the possession of defendants Nos. 1 to 6, each of those defendants should pay this amount on getting possession of the zemindari from out of the income, and that in default the plaintiff should recover the same by means of a precept of the Court. The reason for and effect of similar provisions were considered in Ramasami Naick v. Ramasami Chetti 30 M.k 255. The decree which was drawn up on this razinama provided that the mortgage debt should be paid by the defendants Nos. 1 and 2 and that the mortgaged properties and the zemindari and the assets of the fathers of defendants Nos. 1 to 5 should be liable and that if the 1st or 2nd defendant should succeed to the zamindari, he should pay at once the decree-debt from the income of the zemindari and that in default the plaintiff should proceed to recover it by process of Court and that the defendant (the 5th defendant here and the present zemindar) should be exempted from liability for the decree-debt. Thus effect was not given in the decree to the provisions of the razinama as to defendants Nos. 3 to 6 being liable if the zemindari should come into their possession, probably because they were ex parte and their consent had not been obtained.

2. A year later, on 29th January 1895, the plaintiff put in a petition for execution by sale of the mortgaged properties and for the appointment of a Receiver of the zemindari, and on 19th August 1895 the 6th defendant, 5th defendant here, put in a counter-petition pleading that he had been exempted from liability and that he was not a party to the mortgage sued on and opposing the appointment of a Receiver.

3. On 27th August 1895 the appointment of a Receiver was postponed by consent until 18th July and when on 9th August 1895 an order was passed appointing a Receiver, it was mentioned in the order that the defendants Nos. 1. and 6 had promised to pay Rs. 5,000 before that date and that the plaintiff had undertaken not to press for the appointment of the Receiver if they did so. At this time the 1st defendant Siva Subramania had succeeded to the zemindari and the present 5th defendant was apparently the next in succession.

4. Subsequently the 1st, 2nd and 5th defendants in this suit executed two documents, Exhibits E and El, on 10th March 1897 and a third document on 26th November 1897, Exhibit E2. Exhibit E recited that certain villages of the zemindari had been sold for the decree-debts due under Original Suits Nos. 34 of 1894, 43 of 1894 and 33 of 1893 (the decree now in question) and provided that these villages should be reconveyed to the 1st defendant for Rs. 30,000 subject to the said mortgages, and hypothecated the zemindari for this amount. Exhibit El of the same date recited that the decree holders in the three suits first mentioned had advanced Rs. 75,000 to the 1st defendant to enable him to give security to get possession of the zemindari pending the appeal to the Privy Council from the decision in Sivasubramania Naicker v. Krishnammal 18 M.k 287 and had usufructuarily mortgaged the zemindari to them for this amount providing that any balance should go in reduction of those decree-debts.

5. On 27th October 1897, as appears from Exhibit E2, the appeal to the Privy Council was compromised and by that document, Exhibit E2, dated 26th November 1897, Sivasubramania, the then zamindar, and the present 5th defendant and others executed in favour of the plaintiffs and other creditors a further usufructuary mortgage for a fresh advance of Rs. 20,000 in connection with the compromise. This deed to which the 5th defendant was a party expressly provided that the zemindari was liable for the decree-debt under Original Suit No. 33 of 1893, by which it will be remembered the present 5th defendant had been exonerated from the debt.

6. It would appear from the recitals in the execution petition of 1899, Exhibit D series, that nothing was done on the order appointing a Receiver in August 1895, and it was alleged for the defendant that in March 1896 an arrangement was come to under which the three decree-holders divided proportionately the net collections of the zemindari without bringing the property to sale and that this agreement had been acted on until the presentation of the further execution petition in 1899.

7. It was apparently in this state of things that the creditors considered it desirable to get the 5th defendant, who as 6th defendant had been exonerated by the decree in Original Suit No. 33 of 1893, to undertake the liability to pay in the event of his succeeding to the zemindari, as was provided in the razinama itself though not in the decree and it was apparently for that purpose Exhibit A, the document now sued on, was executed by the 5th defendant on the 28th January 1898. As already mentioned the 5th defendant in Exhibit E2 had already confirmed hypothecation of the zemindari for the decree-debt but he had not entered into a personal covenant to pay on succeeding to the zemindari, such as had been given by defendants Nos. 1 and 2 under the compromise decree.

8. There were legal difficulties in the way of bringing the whole zemindari to sale, and both the creditors and the family appear to have been anxious to avoid doing this by making the successive heirs liable to pay as from the date of succeeding to the zemindari. In 1898 it had not been decided that the 5th defendant's mortgage of his interest under Exhibit E2 was not binding on him.

9. It has now to be considered whether the consideration recited in Exhibit A is sufficient. Under Section 2(d) of the Indian Contract Act there is consideration when, at the desire of the promisor, the promisee has done or abstained from doing something as well as when he does or abstains from doing something, or promises to do or abstains from doing something. Exhibit A after reciting that the amount payable under the decree in Original Suit No. 33 of 1893 upto date was Rs. 28,212-1-4 proceeds, 'Inasmuch as you paid the said amount for the benefit of the said zemindari without discount and rendered assistance at the proper time, and as we are liable to discharge the obligation if we succeed to the zemindari, we agree that either of us who at any time or in any manner obtains the zemindari, should pay that amount with interest as provided in the instrument.' Although it may not appear that the assistance referred to was rendered at the desire of the promisor so as to make it good past consideration under the section, the reference to the promisor's liability to pay is, I think, sufficient to raise an inference that the real consideration for the promise to pay with interest at the stipulated rate was forbearance on the part of the creditors to take further proceedings against the zemindari and as the decree-holders did abstain for some time taking further proceedings that would, I think, be sufficient consideration. Oldershaw v. King 2 H. & N. 517. With reference to the contention that the promisor had been exempted from liability by the decree in Original Suit No. 33 of 1893, it appears sufficient to point out that by Exhibit E2 he had purported to charge his interest in the zemindari when he should succeed to it with the decree amount, and it was not then decided that such a charge was void as the transfer of an expectancy; and it was to the interest of the promisor that the decree-holder should not feel obliged to take proceedings at once for the enforcement of his security.

10. Further, the recital as to the promisor's liability for Rs. 28,212-1-4 is followed by the recital of a further advance to the promisors of Rs. 29,000 and there is a stipulation that it is to carry compound interest at Re. 1-4 per cent. per mensem, and I do not see why this further advance should not itself be treated as sufficient consideration for the whole promise and indeed it appears to me to form part of the consideration for the whole agreement recited in the document. Although following Ramasami Naick v. Ramasami Chetti 30 M.k 255 we hold Exhibit A was void as a mortgage by the 5th defendant of his reversionary interest, the covenant to pay is enforceable and we must reverse the judgment of the Subordinate Court so far as the 5th defendant is concerned and remand the case on the question of the amount due by the 5th defendant in the Exhibit A. Costs incurred upto date to abide. The appeal as regards the other defendants is dismissed without costs.

Seshagiri Aiyar, J.

11. I agree. The Subordinate Judge has not applied his mind to the real point arising in this case. The reason for the 5th defendant undertaking liability was because the plaintiff saved the zemindari for the family. This is referred to in Exhibit A. It was on that account that the 5th defendant who had only a presumptive title agreed to mortgage his expectancy and stipulated for exemption from personal liability. Now that this expectancy is out of the reach of the creditor, the question is whether Exhibit A creates no liability on him. The exemption from personal liability only means that he is not to be arrested in execution. His move-able properties other than the zemindari also are exempt from attachment. Nonetheless I am of opinion that any income which may accrue to him from the zemindari is liable, although as a result of the decided cases, no charge is created on the zemindari or its income.

12. On the question of consideration, I would have preferred to send the case down for a revised finding as the lower Court has not dealt with it properly. It was suggested by Mr. Parthasaradhy Aiyangar that there was a failure of consideration; but this was not pleaded in the suit. Under these circumstances, I agree that the case should be disposed of on the materials placed before us. The consideration for the promise, in my opinion, is that the zemindari to which the 1st defendant had a prospective right of succession was saved by the act of the plaintiff. I agree in the order proposed by the learned Chief Justice.


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