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Nilratan Mukhopadhya and ors. Vs. Cooch Behar Loan Office Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata
Decided On
Reported inAIR1941Cal64
AppellantNilratan Mukhopadhya and ors.
RespondentCooch Behar Loan Office Ltd. and ors.
Cases ReferredIn Laksmishankar v. Vishnuram
Excerpt:
- .....in hemendra coomar mullick v. rajendrolall moonshee ('77) 3 cal 353 is a good rule when both the suits are suits filed in domestic courts. the observation made in that case must be taken to relate to suits in domestic tribunals, for garth c. j. and markley j. were dealing with the previous judgment of a domestic and not of a foreign court. the rule laid down by them was expressly based on the decision in king v. hoare (1844) 13 m & w 494. we will have therefore to examine the grounds on which king v. hoare (1844) 13 m & w 494 and other english cases have proceeded.8. parke b. first considered the case of only one debtor or one wrong-doer. he observed that on a judgment being recovered in a court of record, the judgment was a bar to the original cause of action, because it is thereby.....
Judgment:

1. On 7th January 1929 ten persons jointly borrowed Rs. 18,000 from the Cooch Behar Loan Company Limited hereafter called the company, on a promissory note carrying interest at nine per cent. per annum. Of these ten persons, five were and are residents and subjects of the Cooch Behar State but the remaining five persons were and are British subjects and residents of British India. On 6th January 1932 the company instituted a suit to recover its dues against the said ten persons in the Court of the civil Judge at Cooch Behar and on 1st April 1932 recovered an ex parte decree for Rs. 21,203 and costs. The five persons who are British subjects and residents of British India (defendants 1 to 5 of this suit) did not at any stage appear in the Cooch Behar Court, and so did not submit to the jurisdiction of that Court. After the said decree a sum of Rs. 12,236 was realised by the company from the five persons who were residents of Cooch Behar and subjects of that State. They are defendants 6 to 10 in this suit. Thereafter the company applied on 17th January 1934 to execute the said decree against defendants 1 to 5 in a British Indian Court, namely the Court of the subordinate Judge at Jalpaiguri, as in the notification issued by the Governor-General in Council under Section 44, Civil P. C., civil Courts of Cooch Behar are included. The subordinate Judge at Jalpaiguri, however, by his order dated 17th March 1934 refused to execute that decree, on the ground that the decree of the civil Court of Cooch Behar passed against the said defendants (defendants 1 to 5) was void as that Court had no jurisdiction over them, as they were neither residents of Cooch Behar, nor subjects of the Cooch Behar State, nor had they submitted to the jurisdiction of that Court. On the same date on which the application for execution was filed in the said Court, that is 17th January 1934 the suit in which this appeal arises was filed by the company in the Court of the subordinate Judge at Jalpaiguri against the aforesaid ten persons to recover the balance, namely the sum of Rs. 11,959. The suit was for enforcement of the judgment of the Cooch Behar -Court against defendants 1 to 5, alternatively it was based on the original cause of action, namely on the promissory note, and a decree against defendants 1 to 5 for the balance due was prayed for. To save the suit from the. bar of limitation, so far as it was based on the original cause of action, acknowledgment of liability on the part of the defendants was pleaded. The claim to enforce the judgment. of the Cooch Behar Court against the said defendants was given up by the company in the lower Court and that claim has not been reiterated before us.

2. The learned subordinate Judge by his judgment dated 4th December 1936 held that the company had the right to fall back upon. the original cause of action and that the suit based on the promissory note was not. barred by limitation by reason of acknowledgment of liability by defendants 1 to 4, and of defendant 5 who had died during the pendency of the suit and whose heirs are defendants 5 (a) and 5 (b). He accordingly decreed the suit against defendants 1 to 5 (b). Defendants 1 to 5 (b) have preferred this appeal. It is contended on their behalf that (1) the suit based on the promissory is not maintainable and (2) in any event it is barred by limitation. The first point has been urged on two grounds : (a) that the original cause of action, no longer subsists after the judgment of the Cooch Behar Court, it being merged therein and (b) even if that be not the position, the company having sued and obtained an effective decree in the Cooch Behar Court against some of the joint promisors, e.g., defendants 6 to 10, cannot again sue the other joint promisors, (defendants 1 to 5) on the promissory note.

3. It is a well established principle of Private International Law that a foreign judgment only creates a new obligation to pay but does not extinguish the original cause of action for the debt. A foreign judgment involves no merger of the original cause of action. The creditor thereupon has the option of bringing an action in a domestic tribunal on the foreign judgment which he has recovered or of bringing in a domestic tribunal a suit upon the original cause of action. Tindal C. J., speaking of a foreign judgment in Smith v. Nicolls (1839) 5 Bing (nc) 208 observed thus:

If therefore the judgment has not altered the nature of the rights between the parties, it appears, to me that the plaintiff has the option, either to resort to the original ground of action or to bring an assumpsit on the judgment recovered.

5. Such being the priniciple, it does not matter whether the procedure for enforcing a foreign judgment is by a suit or by an application in the form of execution. The mere fact that by reason of the notification issued by the Governor-General in Council under Section 44, Civil P. C, the plaintiff had the right to enforce the foreign judgment by an application for execution would not, in our judgment, alter the legal character of the foreign judgment. In law it would still be regarded as only creating an independent obligation on the judgment-debtor to pay the sum adjudged without involving a merger of the original cause of action. The case in Chormal Balchand v. Kasturi Chand ('36) 40 CWN 591 was a case where the plaintiff had sued on the foreign judgment and not on the original cause of action. The effect of the notification issued under Section 44, Civil' P. C., was however considered and it was held that only the procedure for enforcing the foreign judgment in a British Indian Court had been changed thereby, leaving all the incidents of a foreign judgment untouched. In the case before us, there is an additional reason for holding that the original cause of action against defendants 1 to 5 has not been merged in the judgment of the Cooch Behar Court, because from the point of view of private international law the judgment of that Court against defendants 1 to 5 is a nullity and has been so adjudged by a competent British Indian Court. 'We accordingly hold that the company's suit in the Court of the subordinate Judge at Jalpaiguri regarded as a suit based on the original cause of action, e. g., on the promissory note, is a good suit. The first branch of Dr. Sengupta's argument on the first point is accordingly overruled.

6. The second ground in support of the first point has been urged in the following manner. It is said that a joint promise by two or more promisors creates a joint liability and that this is the law in India. The only effect of Section 43, Contract Act, is to give the promisee the right to sue any one of the joint promisors, without impleading the others in the suit, but it does not make the liability of joint promisors joint and several. A decree recovered against some of the joint promisors accordingly bars a second suit against the rest. For these propositions reliance has been placed on the judgment of Garth C. J., and Markley J., in Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353. The rule laid down in that case is invoked by the appellants' advocate by saying that as the decree passed against defendants 1 to 5 by the Cooch Behar Court is a nullity they must be regarded as not being parties in the Cooch Behar Court and the suit filed in the Cooch Behar Court must be regarded as having been filed against defendants 6 to 10 only. We will assume that this is the true position.

7. There cannot be any dispute that if the liability is joint and several, a judgment obtained against some would be no bar to a suit against the others. In Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353 it was held that a promissory note executed by several persons jointly creates in India a joint and not a joint and several liability. The rule laid down in King v. Hoare (1844) 13 M & W 494 a case of joint contract, and in Brinsmeea v. Harrison (1872) LR 7 CP 547, a case of joint tort, was applied and it was held that a judgment, though unsatisfied, obtained against some of the joint promisors barred a second suit against the rest. The cases in Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353, King v. Hoare (1844) 13 M & W 494 and cases of the same type where the same rule has been laid down, e. g., Kendall v. Hamilton (1879) 4 AC 504 etc., were all cases where both the suits, the first and the second, had been brought in domestic Courts. In India there is a divergence of judicial opinion as to the effect of Section 43, Contract Act. In Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353 it was held that that section had not the effect of making the liability of joint promisors joint and several and had not the effect of making inapplicable in India the rule laid down by Parke B. in King v. Hoare (1844) 13 M & W 494. This view has been adopted in Madras. In Muhamad Askari v. Radhe Ram (1900) 22 All 307 Strachey C. J., and Banerjee J. took a different view. In Bombay Farran J. also took a different view of Section 43, Contract Act: Motilal v. Ghellabhai ('93) 17 Bom 6 In Shivlal Matilal v. Bridhichand Jivraj ('17) 19 Bom L R 370 Macleod J. reviewed the leading cases on the subject and agreed with the view taken in Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353. In this Court the principle laid down therein has been followed in many cases. In Krishnadas Roy v. Kalitara ('18) 22 CWN 289, however, the specific question we have to decide was not decided, but there are observations in the judgment of both Chatterjee and Richardson JJ. which imply that a joint contract in India creates a joint and several liability on the part of the joint promisors. The matter again came up for decision in Miss Moselle Solomon v, Martin & Co. ('35) 39 CWN 461. The learned Judges Lort-Williams and Jack JJ., differed on this point, though they agreed in decreeing the appeal on other grounds. In this state of the case-law we would have referred the matter to the Full Bench, but in the view we are taking that course is not necessary. We would proceed upon the assumption that the rule laid down in Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353 is a good rule when both the suits are suits filed in domestic Courts. The observation made in that case must be taken to relate to suits in domestic tribunals, for Garth C. J. and Markley J. were dealing with the previous judgment of a domestic and not of a foreign Court. The rule laid down by them was expressly based on the decision in King v. Hoare (1844) 13 M & W 494. We will have therefore to examine the grounds on which King v. Hoare (1844) 13 M & W 494 and other English cases have proceeded.

8. Parke B. first considered the case of only one debtor or one wrong-doer. He observed that on a judgment being recovered in a Court of record, the judgment was a bar to the original cause of action, because it is thereby reduced to a certainty and the object of the suit attained. It would be useless and vexatious to subject the defendant again to another suit to obtain the same result. The second suit would be barred on the principle that the matter had passed by the result of the first suit to the domain of judgment transit in rem judicatum. The original cause of action, so to say, had merged in the judgment rendered. It had thereafter no existence, and so could not be enforced by a separate action. Parke B. then considered the case of more than one joint debtor or more than one joint tort-feasor. He said that in such cases as the liability was joint, there was one cause of action for the breach of the joint contract or for the joint tort, and not as many causes of action in number as were parties to the joint contract concerned in the breach or as many persons concerned in the joint tort. As soon therefore there was a judgment against one or some of them the cause of action which was a single one merged in the judgment on the same principles formulated in the case where there was only one debtor or one tort-feasor. After the judgment in law nothing of original cause of action was left.

9. In some cases which were decided after King v. Hoare (1844) 13 M & W 494 it was said that Parke B. had only laid down a rule of procedure but this view of King v. Hoare (1844) 13 M & W 494 was negatived by the House of Lords in Kendall v. Hamilton (1879) 4 AC 504. In that case it was also pointed out that the rule formulated in King v. Hoare (1844) 13 M & W 494 did not proceed upon the principle of election, namely, that the plaintiff by suing some out of several joint debtors had elected to take them as his debtors to the exclusion of those whom he had not joined in the action, but that it proceeded upon two principles of substantive law. The first was the principle of the merger of the cause of action in the judgment-transit in rem judicatum, and the second was a principle of public policy that there should be an end of litigation-there should not be a vexatious succession of suits on the same cause of action - nemo debet bis vexari pro una et eadem causa. Such being the basis of the rule laid down in King v. Hoare (1844) 13 M & W 494, the said rule cannot in our judgment apply where the first judgment pronounced against some of several joint promisors or contractors is a judgment not of a domestic Court but of a foreign Court, for a judgment of a foreign Court does not operate in merging in it the original cause and the principle of nemo debit bis vexari etc., also does not apply. The original cause of action still subsists in such a case and a second suit based on it can still be filed in a domestic tribunal. On the principle analogous to the principle of cessante ratione legis, cessat et ipsa lex the rule formulated in King v. Hoare (1844) 13 M & W 494 and here in India in Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353 should not be applied to the case before us because the judgment in the previous suit was a judgment of a foreign Court. If that foreign judgment had been fully satisfied, a suit in the domestic tribunal would have been barred but then on a different principle. The application of the rule laid down in King v. Hoare (1844) 13 M & W 494 and Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353 to a type of case which we have before us would work great injustice. When a creditor lends money to several persons on a joint promissory note or when a person enters into a joint contract with several persons he relies upon the joint credit, the credit of all of them. According to the English rule he has to sue them all in one suit, and when all are residents or subjects of the same estate he gets an effective decree against all which he can execute against the property of one and all the defendant judgment-debtors.

10. In India he can sue one or some without making others parties, but that is his own option. He can sue all or some in one action. If, however, some of the joint promisors be the residents or subjects of one State and the others of another State and if the rule laid down in King v. Hoare (1844) 13 M & W 494 and Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353 be made applicable to such a case the promisee would, on the breach of that joint contract, be compelled to make his election of either proceeding against the first set or the second set of joint promisors. That rule would have the effect of compelling him to have recourse to the security of some of the joint promisors only, when by entering into the contract he intended to have the security of all of them. For the aforesaid consideration also we think that the rule formulated in King v. Hoare (1844) 13 M & W 494 and Hemendra Coomar Mullick v. Rajendrolall Moonshee ('77) 3 Cal 353 should not apply to such a case. The promisee who has the right to sue on the original cause of action both in the foreign Court and in the domestic Court may in such a case sue those promisors who are residents or subjects of the foreign State in the foreign Court and so get against them an effective judgment in that Court and may also sue the others who are residents or subjects of British India in a British Indian Court on the original cause of action and so get an effective judgment against them. Any other view would work hardship. In Laksmishankar v. Vishnuram (1900) 24 Bom 77 the learned Judges held that a decree passed in a foreign Court (Court at Baroda) against one person on a joint khata account did not bar a suit in a British Indian Court against his partners, though the liability was joint. Though the reason for the decision given was that the judgment of the Baroda Court was not res judicata in the suit in British India, and not the reasons on which we support our judgment, the result is the same. 'We accordingly overrule this branch of the argument of the appellants' advocate on the first point.

11. We do not also see any substance in the second point, the point regarding limitation. On 27th January 1931, the company wrote a letter to all the defendants. By that letter it demanded payment within two months and threatened them with a suit if the demand was not complied with. In reply to this letter, defendant 1 wrote a letter to the company on 28th January 1931 (Ex. 27). That letter contains an acknowledgment of liability by him and the suit against him is saved. The company led uncontradicted evidence that the other defendants authorized defendant 1 to write this letter on their behalf. The learned subordinate Judge has discussed that evidence and we do not think it necessary to reiterate the reasons given by him for holding that defendant 1 was their agent in the matter of acknowledgment of liability. We accept the findings of the learned subordinate Judge in this respect and hold that the suit is in time against all the defendants appellants. The result is that this appeal fails. It is accordingly dismissed with costs to the plaintiff company. The application for adducing additional evidence is rejected.


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