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Seth Gokul Dass Gopal Dass Vs. Murli and - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtKolkata
Decided On
Judge
Reported in(1878)ILR3Cal603
AppellantSeth Gokul Dass Gopal Dass
RespondentMurli And; Zalim, Heirs of Tarapat
Cases ReferredPillai v. Pillai
Excerpt:
interest on decrees - indian contract act, section 20 and section 23, clause 3, mistake of fact and of law--error in statement of account. - .....defendants, added interest for the period from october 3863 to the day fixed for the sale of the village in execution, that alone was sufficient to vitiate the contract, for in the view of the deputy commissioner, it was evident that the plaintiff' was well aware that ho had no real claim to interest. but he went further, and hold that the plaintiff was not entitled to any interest on the decree; that 4,820 rupees16. only were duo; and that the plaintiff by concealment of facts regarding the amount due, and by misrepresentation of facts, as shown by the proceedings in the original case, and the application for execution for 3,000 rupees in addition to the 13,498 rupees were sufficient grounds for considering that the transactions out of which the contract grew were unlawful.17. upon.....
Judgment:

B. Peacock, J.

1. This is an appeal from a decree of the Judicial Commissioner of the Central Provinces of India, in a suit instituted by the appellant against the respondents in the Court of the Deputy Commissioner of Jubbulpore, for the foreclosure of a mortgage.

2. The following are the circumstances under which the mortgage was executed: On the 27th June 1859, the appellant obtained a decree in the Court of the Sudder Ameen of Jubbulpore against Tarapat Patel, malgumr of Khairi, the father of the defendants, for the sum of 9,413 rupees, 15 annas and 3 pies, being the balance of principal and interest due upon a bond executed by Tarapat, and the costs of suit. The decree was silent as to the payment of future interest on the amount decreed. 13y the bond upon which the decree was obtained, it was expressly stipulated that interest should be paid at the rate of 1 per cent, a month.

3. Between the date of the decree and the 27th June 1865, the plaintiff endeavoured, on several occasions, to obtain payment of the amount decreed, and did in fact realize portions of the amount under two several executions. It is unnecessary to enter into any details of the proceedings adopted by the plaintiff, or of the litigation which ensued upon them. It is sufficient to state that, in their Lordships' opinion, no laches can be imputed to the plaintiff in endeavouring to enforce the decree.

4. In February 1865, the plaintiff applied to the Court of the Deputy Commissioner of Jubbulpore against the defendants and their father, Tarapat, for an attachment and sale of their rights in the village of Khairi in execution for the sum of Rs. 13,498-9-9 claimed to be due under the decree.

5. That sum included interest on the amount of the decree calculated up to the 14th October 1863, after giving credit for payments made on account. Upon that application the defendants and their father were ordered to be summoned, and upon their non-appearance an order was made on the 25th July 1865, for the attachment of their proprietary rights in the village, and for the sale thereof by public auction, after due notice according to Sections 248 and 249 of Act VIII of 1859.

6. On the 3rd August in the same year, orders were issued that the requisite notifications, according to Section 249, be issued, and that the sale of the right and interest of defendants in the village of Khairi should take place on the fortieth day from that date.

7. On the 4th, the present defendants presented a petition to the Deputy Commissioner praying to be relieved from liability for the plaintiff's claim, and that the attachment might be removed from the village. Upon that petition an order was passed refusing to alter the order already made, and stating that as the defendants had failed to appear on the date appointed for hearing, the case had been disposed of in their absence, the reason why they had absented themselves not having been explained. From that order they appealed to the Commissioner, and their appeal was rejected.

8. On the 18th September 1865, the mortgage upon which the suit was brought was executed. It was by conditional sale, and is in the following words:

Sefeh Khusalchand and Gokuldass, of Jubbulpore, plaintiffs v. (1) Tarapat (2) Murlidhar (3) Zalim Singh, patels, residents, and malguzars of the Village Khairi, Pergunnah Patau, defendants.

Claim.

Execution of decree for Rs. 13,498-9-9,

We, Tarapat, Murlidhar, and Zalim Singh, patels and residents of Mouza Khairi, defendants, are the writers of this agreement.

The plaintiffs above-named having taken out execution of a decree for the sum above-mentioned, and applied for attachment and sale of the Village Khairi, the 13th September 1805 was first appointed as the date for the sale of the village in accordance with orders from the Judicial Commissioner. Subsequently the 18th of the said month had been fixed as the date for sale, in liquidation of a sum of Rs. 16,498-9-8.

We have now brought the plaintiffs to terms, and having gone into the accounts, we agree to pay plaintiffs as principal, interests, costs, and future interests on the decree, in all 19,000 Government sicca rupees.

Of this we have caused 8,000 rupees to be paid by Naraindas and Raghoonath. This leaves a balance of 14,000 Government rupees, which we agree to liquidate, paying no interest, by yearly instalments as detailed below; and until the liquidation of the whole amount due, we hereby mortgage or conditionally sell the village in question, the condition being that, in the event of our failing to pay any one of the instalments Agreed upon, the sale of the village shall become absolute; we and our heirs would then forfeit all proprietary rights in the village, and such rights would be transferred to plaintiffs, to be thenceforward enjoyed by them and their descendants. Should, however, the failure on our part to pay the instalment in arrears be attributable to unfavourable seasons, &c;, the said instalments will be payable next year, and will bear interest at 1 per cent.

Should the payment in arrears be not made in the next year along with the one duo for that year, the sale of the village will be considered absolute. The terms of this deed of sale would be binding on out heirs and representatives also, and so long as the money duo to plaintiffs remains unpaid, the village shall not be transferred by us to any one else; any such transfer, if made, shall be held to be illegal.

We relinquish all claims to any money which the plaintiffs may have recovered at the time of the sale becoming absolute.

9. The details of the instalments were for the payment on the 15th Aghan, Sambat 1922, corresponding with the year 1865, of the sum of 2,000 rupees, and on Jeth 15th in each of the following twenty years, of the sum of 600 rupees, making a total of 14,000 rupees.

10. On the same 18th September 1865, Tarapat, the father, each of the defendants and the plaintiff respectively, made the following statements, viz.:

Tarapat, defendant, son of Mahadeo, caste Koormee, aged 50 years, malguzar, resident of Khairi, states on solemn affirmation:

We have effected a settlement of his claim with the plaintiff by hypothecating our village, and fixing instalments for the liquidation of the same, and bog that our village be released from attachment.' 18th September 1865.

Murli, defendant, son of Tarapat, caste Koormee, aged 28 years, resident of Khairi, malguzar, states on solemn affirmation:

Having effected a settlement of his claim with the plaintiff by fixing instalments for its liquidation, I beg that the village be released from attachment. We have hypothecated our village as a guarantee for the liquidation of plaintiff's claim.' 18th September 1865.

Zalim, defendant, son of Tarapat, caste Koormco, aged 21 years, resident of Khairi, malguzar, states on solemn affirmation:

We have fixed instalments for the payment of the plaintiff's claim, and beg that our village be released from attachment. We have mortgaged our village to plaintiff.' 18th September 1865.

Seth Khusalchand, son of Sawaram, aged 62 years, caste Mahcshree, resident of Jubbul, and a mahajun by profession, states on solemn affirmation:

I have taken out execution of a decree against Tarapat, Murli, and Zalim, and their village was about to be sold. 'The defendants have, however, made an amicable arrangement for the liquidation of my claim by agreeing to pay instalments, which I have approved. I have no objection whatever, and I beg that the arrangements be sanctioned by the Court, and the village released from attachment. The defendants have hypothecated the village, and I wish that it should remain so hypothecated, and the case be struck off the file.' 18th September 1865.'

11. The mortgage was on the same day presented by the defendants to the Extra Assistant Commissioner, who forwarded the case to the Court of the Deputy Commissioner, who thereupon, on the 19th September 1865, ordered that the kistbandi be sanctioned and the case struck off the file as completely disposed of.

12. The defendants continued, to pay the instalments under the mortgage up to 15th Jeth, 1929, but failed to pay the instalments which fell due in Sampat 1930 and 1931, whereupon the plaintiff, on the 24th October 1874, filed his plaint and prayed for a decree for 7,800 rupees, the amount of the instalments remaining unpaid, with a proviso that in the event of the same not being paid up within one year, the rights and interests of the defendants and their deceased father in the village in question ho transferred to plaintiff, the transaction being then considered as one of an absolute sale.

13. The defendants in their written statement alleged, amongst other things, that in Juno 1859 a money-decree for Rs. 9,413-15-3 was passed against Tarapat, their father, and that future interest on the decree was not allowed; that the plaintiff, however, fraudulently went on executing the decree with interest, and eventually, in September 1865, induced Tarapat and the defendants to execute the deed sued on, by dishonestly concealing the fact that future interest had not been decreed.

14. They also stated that they wore ignorant people, and that they executed the deed under a mistake of fact, i.e., under the impression that future interest had been decreed as represented by the plaintiff; that, at the time when the deed was executed, only Rs. 3,798-4-9 was duo under the decree, and that the defendants were minors at the time of the execution of the deed.

15. The plea of minority was found against the defendants, but the Deputy Commissioner dismissed the plaintiff's suit with costs, upon the ground that the claim was based on an illegal contract. He held that even if the plaintiff had a right to demand the sum of Rs. 13,498-9-9 for which execution had been awarded, there was not sufficient explanation as to how that amount was increased to 36,498 rupees; and further, that even if, as the plaintiff's counsel had suggested, the plaintiff, in making up the accounts with defendants, added interest for the period from October 3863 to the day fixed for the sale of the village in execution, that alone was sufficient to vitiate the contract, for in the view of the Deputy Commissioner, it was evident that the plaintiff' was well aware that ho had no real claim to interest. But he went further, and hold that the plaintiff was not entitled to any interest on the decree; that 4,820 rupees

16. only were duo; and that the plaintiff by concealment of facts regarding the amount due, and by misrepresentation of facts, as shown by the proceedings in the original case, and the application for execution for 3,000 rupees in addition to the 13,498 rupees were sufficient grounds for considering that the transactions out of which the contract grew were unlawful.

17. Upon appeal, the Commissioner was of opinion that there was no sufficient evidence of concealment, hut that there was misrepresentation with regard to defendant's liability to interest within the meaning of Definition 1, Section 18, of the Indian Contract Act, IX of 1872.1 He further held that the bond was nothing more than a kistbandi; that no new consideration for it was given; that if the parties had arranged that effect should be given to it by the executing Court, it would have been pronounced invalid, as it altered the terms of the decree by the addition of interest, which could not be done even with consent of the parties. He therefore held that the contract was illegal and void under Clause 2, Section 23, of the Indian Contract Act, and dismissed the appeal with costs.

18. A special appeal was preferred to the Judicial Commissioner, who dismissed it with costs, on the ground that the deed was voidable under Section 20 of the Indian Contract Act, inasmuch as both parties were under a mistake of fact essential to the agreement expressed in it. Their Lordships are of opinion that there was no sufficient evidence to prove a fraudulent misrepresentation or concealment of facts on the part of the plaintiff. There was, no doubt, a mistake of law on the part of the defendants in supposing that execution could be issued for interest upon the amount decreed from the date of the decree to the date of realization, no such interest having been awarded by the decree. But that mistake appears to have been common not only to the plaintiff and the defendants, but also to the Assistant Commissioner by whom the order of the 25th July 1865 was made for the attachment and sale of the village in execution for the sum of Rs. 13,468-9-9. Indeed, until the Full Bench ruing of the High Court of Bengal in September 1866 in the case of Mosoodun hall v. Behaves Singh B.L.R. Sup. Vol. 602 : S.C. 6 W.B. Mis. App. 109 the principle of which was upheld by the Judicial Committee in the case of Pillai v. Pillai 15 B.L.R. 383 : S.C. L.R. 2 Ind. App. 219 there were conflicting rulings upon the point whether interest upon a decree could be levied in execution when the decree was silent as to subsequent interest on the amount decreed.

19. In that uncertain state of the law, the defendants not having appeared to show cause, an order was in fact made for the attachment and sale of the village in execution for the sum of Rs. 13,498-9-9, which included interest on the decree. No appeal was preferred against that order, nor were any other proceedings adopted to sot it aside. It remained in force up to the time of the mortgage, and the village had been actually attached, and was liable to be sold under it if the compromise had not been effected and the mortgage executed. Their Lordships are of opinion that the mortgage was not invalid either upon the grounds stated by the Commissioner or upon that stated by the Judicial Commissioner. It appears to have been executed by way of compromise, after an examination of the accounts at which the father Tarapat was present; and it does not appear to their Lordships that, subject to what will hereafter be said as to a sum of 3,000 rupees, part of the money secured, the plaintiff gained any unconscionable advantage by the transaction; for although he was not strictly entitled to an execution for interest calculated for a period subsequent to the date of the decree, there seems to be no reason why he should not have recovered interest as damages in an action upon the decree if he and the Court which issued the attachment had not mistaken his remedy. It is not necessary to refer to the English decisions bearing upon the subject of recovering by action interest upon a judgment which cannot be levied by execution. In the case of Pillai v. Pillai 15 B.L.R. 383 : S.C.L.R. 2 Ind. App. 219 to which reference has already been made, the Judicial Committee, in reference to the question of levying interest upon a decree where the decree was silent as to future interest, stated expressly that questions of that nature might be raised by separate suit.

20. It may be remarked that the rate at which interest was calculated for the period between the execution of the mortgage and the times fixed for the payment of the instalments was extremely low.

21. It appears, however, to have been assumed that the sum for which the village was liable to be sold in execution was not Rs. 13,498-9-9, but Rs. 16,498-9-8.

22. The recital in the mortgage is, 'Subsequently the 18th of the said month had been fixed as the date for sale in liquidation of a sum of Rs. 16,498-9-8.' As to this the Judicial Commissioner says: 'In the first Court's judgment the larger sum of Rs. 16,498-9-8 is referred to as entered in one of the processes of execution, via., 'the notice of sale,' but the extant record of proceedings nowhere mentions such a sum. If such a sum was ever entered in such a process it must apparently have boon only through a clerical error.' Although there does not appear to have been any wilful misrepresentation in this respect by the plaintiff, their Lordships are of opinion that there was no authority under Section 249 of Act VIII of 1859 for increasing the amount for which the village was ordered to be sold in execution from 13,498 rupees to 16,498 rupees; that the addition has not been satisfactorily explained; and that the deed ought to be reformed by disallowing the additional sum of 3,000 rupees. This will reduce the sum secured by the mortgage by 3,000 rupees, and a proportionate part of the sum allowed for future interest during the period stipulated for payment by instalments, which may be taken in round numbers as together amounting to 3,480 rupees. Deducting 3,480 rupees, and the eight instalments of the 14,000 rupees which have been paid, amounting to 6,200 rupees, from the total amount of 14,000 rupees secured, there remains the sum of 4,320 rupees to be paid by the defendants to the plaintiff in order to redeem the above-mentioned village.

23. Their Lordships will, therefore, humbly advise Her Majesty that the decrees of the throe lower Courts be reversed; that in the event of the defendants paying to the plaintiff' the sum of 4,320 rupees, together with the costs of the plaintiff in the three lower Courts, within one year from the time of the service upon them of notice of such order of Her Majesty in Council as shall he made in this appeal, or in the event of their paying into the Court of the Deputy Commissioner of Jubbulpore within that period that said sum of 4,320 rupees, together with such costs as aforesaid for the use of the plaintiff, the said village shall be freed and discharged from the said mortgage; but that in the event of the said sum of 4,320 rupees, together with such costs as aforesaid, not being paid to the plaintiff by the defendants, or paid by them into the said Court for the use of the plaintiff within the period aforesaid, the said mortgage and conditional sale shall become absolute, and all the right, title, and interest of the defendants in the said village shall be transferred to and vested in the plaintiff; and in order that due notice of such order in Council shall be given to the defendants, their Lordships will further advise Her Majesty that the plaintiff be ordered to lodge the said decree of Her Majesty in Council in the Court of the Deputy Commissioner of Jubbulpore, in order that notice thereof may be given to the defendants in duo course, and that the plaintiff do also deposit in the said Court such an amount as may be required to defray the costs of serving upon the defendants notice of the said order.

24. Considering the peculiar circumstances of this case, and also the fact that the plaintiff has not succeeded to the full extent of his claim, their Lordships arc of opinion that the respondents ought not to be ordered to pay the costs of this appeal.

25. Agents for the appellant : Messrs. Merriman, Pike and Herriman.

1.

'Misrepresentation'

[Section 18: Misrepresentation maen and includes-definde.

(1) the positive abortion, in ii manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;

(2) any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him ;

(3) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing, which is the subject of the agreement.]


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