Fact: Rao Maharaj Singh executed a registered mortgaged-deed on 21st March 1918, in respect of certain immovable property in Etah District for Rs. 85,000, in favour of appellants' deceased father agreeing to repay the same with interest at 12 per cent per annum, compoundable with annual rests. The Court of Wards took over the management of the mortgagor's estate under the provisions of the United Provinces Court of Wards Act (1912) U. P. Act (4 of 1912). In pursuance of a notice issued by the Collector inviting claims against the estate, the appellants notified their claim under the mortgage. On 2nd April 1921 the claim was accepted by the Collector and on 15th March 1922 a notice was given to the plaintiffs under S. 19 (3) of the Act that from 2nd April 1921 upto the date of payment of the debt, or for two years (if the debt was not paid within two years), interest would be reduced to 6 per cent. On 26th February 1922 the plaintiff agreed with the Collector that the plaintiff would remit a sum of Rs. 5,679 and take Rs. 1,20,000 in full satisfaction of his claim of the mortgage. In pursuance of that agreement, the Court of Wards paid different sums of money on different dates to the plaintiff; the total amount coming up to the stipulated amount of Rs. 1,20,000. When the last of these payments (a sum of Rs. 55,631) was made on 16th February 1923, a cheque was sent to the plaintiff with a covering letter stating that, "as the entire debt is being paid off, return at once the original document which is with you, file a formal receipt bearing a court-fee label in respect of the entire amount payable to you either by registered post or personally. If you want to understand the account, you can in person or by an agent appear in the office of the Court of Wards and understand account."
On 21st May 1925 the plaintiffs brought a suit against the Collector of Etah, as the manager of the Court of Wards of the mortgager's estate to recover Rs. 27,379, a balance still due on the mortgage. The trial Judge decreed the plaintiffs's suit. The Collector appealed to the High Court. The Divisional Bench remitted two questions for decision by a Full Bench: see AIR 1930 All 721. On the return of the record, the Divisional Bench making the reference held that the plaintiff did not accept the cheque for Rs. 55,631 in full satisfaction of his claim up to 16th February 1923. It was however decided that the plaintiff had received the letter of 16th February 1923, within a few days of its despatch, and that it was his duty to inform the Court of Wards that he had not been paid the sum of Rs. 5,679 with interest at 6 per cent. per annum, before 2nd April 1923, as the Court of Wards had by its notice of 15th March 1922, intimated to him that under S. 19 sub-S. (3) of the Act the Collector had reduced the rate of interest for two years to 6 per cent. on 2nd April 1921.
At the case now stands the alleged agreement to the effect that the appellants were to accept 1 lakh and 20,000 rupees in settlement of their claim is out of the case.
In the next place, their Lordships agree with the High Court in their conclusion that they could not hold that the appellant Seth Kishori Lal, had accepted the cheque for Rs. 55,631 sent to him on 16th February 1923 in full satisfaction and accord of the claim, but the High Court have found that the appellants were estopped in respect of a certain point about reduction of interest. Their Lordships are unable to see that any question of estoppel can possibly arise in the circumstances of this case, and they are also unable to agree with the statement of the High Court in their judgment that it was the duty of Seth Kishori Lal to inform the Court of Wards that he had not been paid the sum of Rs. 5,679 with interest at 6 per cent before 2nd April 1923. Their Lordships are unable to see that any such duty should be laid on that appellant in respect of a matter which was or should have been equally within the cognizance of both parties. Their Lordships will accordingly humbly advise His Majesty that the appeal should be allowed, that the decree of the High Court should be reversed, and that the decree of the Subordinate Judge of 31st May 1926, should be restored. The respondent will pay the appellants' costs of the appeal here and of the proceedings in the appeal before the High Court.