Babu Bhagwati Saran Singh v. Maiyan Murat Mati Kuer

Babu Bhagwati Saran Singh v. Maiyan Murat Mati Kuer

(High Court Of Judicature At Patna)

| 26-01-1931

Fazl Ali, J.The circumstances which led to the litigation out of which these two appeals arise were shortly these: One Raja Rameshwar Prasad Singh, proprietor of Maksudpur estate, died in 1902, leaving behind him a widow, Rani Sundar Kuer, and two daughters, Maiyan Godawari Kuer and Maiyan Murat Mati Kuer; and under a will executed shortly before his death his widow Rani Sunder Kuer came in possession of all his properties. In 1903 his brother Chandreshwar Prasad Narayan Singh commenced a suit in which he claimed the entire estate by virtue of survivorship and which was decreed in a modified form by the Court of first instance. While the litigation was pending before the Privy Council, a compromise was arrived at between the parties by which certain properties were given to Rani Sundar Kuer and her two daughters, while the bulk of the estate went to Chandreshwar Prasad Singh. It was also mutually agreed upon between the parties that out of the debts left by Rameshwar Prasad Narayan Singh, Rani Sundar Kuer and her two daughters would be liable to pay Rs. 1,82,000. In 1912 Rani Sunder kuer died and in 1917 Maiyan Godawari Kuer also died leaving a will under which her husband, who is the plaintiff In the present litigation, came in possession of her estate. Meanwhile the decretal amount which now the plaintiff and Maiyan Murat Mati Kuer were liable to pay half and half had been brought down after several executions to Rs. 40,000 and on 22nd March 1926, which was the data fixed for the sale of certain properties (Mauza Uchouli and Khairi) a further sum of Rs. 5,000 being paid to the decree holders the sale was adjourned to 19th April 1926. As the balance of the decretal amount was not paid, the two villages were sold on 22nd April 1926, for a sum of Rs. 36,000 and purchased by one Jangi Lal. It is the common case of both the parties that the decree in execution of which the properties were sold was a mortgage decree and the properties sold were among those mortgaged. On 7th May 1926, the plaintiff deposited a sum of Rs. 35,385 which was the balance of the decretal amount due from the plaintiff as well as the defendant along with a sum of Rs. 1,810, the statutory compensation at the rate of 5 per cent on the decretal amount, and the sale was set aside on the 12th September 1926, the plaintiff brought this suit in which he claimed not only half of the amount (that is to say Rs. 19,505 9-7) which had been actually paid by him in Court, but also a sum of Rs. 1,651-8-0 as interest on the amount at the rate of 2 per cent. per mensem as well as Rs. 780 as commission. This last claim was based on the allegation that the plaintiff had borrowed Rs. 38,000 on a hand-note from one Bindeswari Saran Singh for the purpose of making the necessary deposit in the civil Court and had to pay commission at 4 per cent and agreed to pay interest at 2 per cent per mensem.

2. The suit was resisted by the defendant on various grounds, one of these grounds being that the defendant was not liable in law to pay the amount claimed by the plaintiff. It was also contended that the sum of Rs. 5,000 deposited on 22nd March 1926, was paid by the defendant alone and not partly by the plaintiff and partly by the defendant. The defendant also did not admit that the plaintiff had raised the money by borrowing it from Bindeswari Saran or That he had paid any commission for the alleged loan. It may be mentioned here that each party has charged the other with fraud and the plaintiff went the length of alleging that the property had been, purchased by the defendant herself in the name of Jangi Lal.

3. The learned Subordinate Judge, before whom the suit was instituted, did not find sufficient evidence to believe the imputation of fraud made by the defendant against the plaintiff. He held that the defendant was liable to pay to the plaintiff a sum of Rs. 17,695 odd which represents half the decretal amount payable by the plaintiff and the defendant at the time of the sale. He disallowed the plaintiffs claim to half the amount which had been paid by him as compensation and as he disbelieved the allegation of the plaintiff that he had borrowed the money from Bindeswari Saran Singh, he disallowed his claim for interest at the rate of 2 per cent per annum as well as for the amount which was alleged by him to have been paid as commission. He however thought that the plaintiff was entitled to get interest at the market rate which he held to be 1 per cent, per mensem, from the date of the payment up to the date of the decree. He further held that the sum of Rs. 5,000 deposited in Court on 22nd March 1926, had been paid in equal halves by the plaintiff and the defendant.

4. From this decision both the parties have appealed to this Court. The defendant has appealed on the ground that no decree should have been passed against her at all and that it should have been held that the defendant had paid the whole of Rs. 5,000 deposited in Court on 22nd March 1926, while the plaintiff challenges the decision as to the defendant not being liable to pay half the amount of the compensation money as well as commission and interest at the rate claimed by him.

5. The question which was argued in this Court at great length was whether in the circumstances of the case the defendant was liable in law to pay half the decretal amount which was due from the parties just before the sale of the properties. The learned Subordinate Judge has based his decision on Sections 69 and 70, Contract Act, and cited two decisions in support of his view, namely, Nagendra Nath Roy and Others Vs. Jugal Kishore Roy and Others, and Bhicoobai v. Hariba Raghuji [1917] 42 Bom. 566. The correctness of this view however has been seriously questioned by Mr. Sushil Madhab Mullick who appears for the respondent and who contends that neither Section 69 nor Section 70 has any application to the facts of this case. His contention is that Section 69 does not apply because as soon as the sale of the properties took place the liability of the parties under the decree came to an end and the defendant was no longer bound by law to pay the decretal amount. As to Section 70 it is argued by him in the first place that as the plaintiff could not have saved his property without depositing the amount, which he did in fact deposit, he cannot be said to have acted for the defendant in doing so; and in the second place that Section 70 can be of no avail to the plaintiff if while conferring the so-called benefit on the defendant, he did not give him an option to refuse such benefit. While urging this argument Mr. Mullick strongly relied on the decisions of the Privy Council in Abdul Wahid Khan v. Shaluka Bibi [1893] 21 Cal. 496; Ram Tuhul Singh v. Bisseswar Lal Sahoo (i) and the decision of the Madras High Court in Yogambal Boyee Ammani Ammal v. Naina Pillai Markayar [1909] 33 Mad. 15.

6. There is no doubt that at first sight these decisions seem to support the contentions raised by Mr. Mullick, but the case cannot be decided without fully considering a large number of other decisions which seem to strongly support the view taken by the learned Subordinate Judge and in several of which the cases relied on by Mr. Mullick have been considered and explained. I will here briefly refer to certain cases in which the facts were more or less similar to those of the present case and also incidentally to a few cases where Sections 69 and 70, Contract Act, have been discussed and their scope defined.

7. In Prabhu Narayan Singh v. Beni Madhab [1909] 5 I.C. 779 a mortgage decree having, been passed against several persons a sale of the mortgaged property followed and then one of the mortgagors paying off the decree-holder, the sale was set aside by consent. Thereupon that mortgagor sued the other mortgagors for contribution, and it was held that, although the defendants were not liable u/s 69, Contract Act, the defendants who kept the property were bound in equity to pay the money which the plaintiff had paid to release the property. In this case it was pointed out that if the money had been paid to prevent the sale, the case would have been quite different and Section 69 would have applied, for the plaintiff would then have discharged an obligation common to him and them. It appears that in this case the question as to whether or not Section 70, Contract Act, would apply was neither raised nor discussed and the case was decided solely on the ground that the plaintiff had an equitable claim as against the defendant independently of the Contract Act.

8. In Suchand Ghoshal v. Balaram Mardana [1910] 38 Cal. 1 an entire tenure being sold in execution of a rent decree obtained against only some of the tenants, the tenant who was not a party to the rent suit deposited the prescribed amount u/s 310-A, Civil P.C. 1882 (which corresponds to Order 21, Rule 89, of the present Code) with the object of protecting his own interest in the holding and the sales were set aside. The plaintiff then sued the several defendants for contribution according to their shares in the decretal debt and it was hold that he was entitled to a decree. Sir Lawrence Jenkins, who was one of the Judges before whom the case came up on appeal, held that having regard to the findings of fact in the case, namely that in making the deposit the plaintiff did not intend to act gratuitously and that the defendants had enjoyed the benefits thereof, the requirements of Section 70 had been satisfied and the plaintiff was entitled to a decree under this provision. On the other hand Doss, J., who delivered a separate judgment in the case, was inclined to take the view that Section 70, Contract Act, was not applicable and although he thought that the principle which applied to the case was the one formulated in Section 43, Contract Act, he put forward a view which clearly favoured the application of Section 69, Contract Act. This is what he observed in this connexion:

It is urged that as soon as the sale took place the decree was satisfied and the joint and several obligation in discharge of which the money was paid ceased to exist. I think a clear fallacy lurks in this argument. The decree is not satisfied and the obligation is not discharged until the decree-holder receives the money and satisfaction is entered. Nor does the compulsion of law initiated by the attachment of the property terminate until such satisfaction. When the sale takes the purchase money deposited by the purchaser remains in Court and it is not paid up to the decree-holder until after confirmation of the sale . If before the sale an application is made u/s 810-A the money so deposited is applied towards the satisfaction of the decree .... It follows therefore that it was the money deposited by the plaintiff which in fact satisfied the decree and discharged the joint obligation.

9. This is precisely the reasoning that was employed by Banerji, J., in Dori Lal v. Patti Ram [1911] 10 I.C. 458, in applying Section 69, Contract Act, in a case where certain property being sold at auction in execution of a money decree against the plaintiff and the defendants, the plaintiff made the necessary deposit in Court u/s 310-A, Civil P.C., 1882, and then brought a suit for contribution against the defendants. Section 69 was, also applied in somewhat similar circumstances in Batuk Nath Mandal v. Bepin Bihari Choudhury [1912] 17 I.C. 90. In Jog Narayan Singh v. Badri Das [1911] 13 I.C. 144, however where also a suit for contribution had been brought after a sale had been set aside upon a deposit being made u/s 310-A, Civil P.C., it was held by Mookerjee, J., that Section 70, Contract Act, was fully applicable and the decision of Yogambal Boyee Ammani Ammal v. Naina Pillai Markayar [1909] 33 Mad. 15, which is relied on by Mr. Mullick was dissented from in these words:

In that case, it appears to have been laid down that Section 70 has no application where the payment is made under such circumstances as to make it impossible for the person who is benefited thereby to refuse to accept the benefit conferred upon him. The learned Judges pointed out that the section appears to have been modelled on the principle recognized in the case of Lampleigh v. Brathwait [1616] 1 S.M.L.C. 159, and that interpreted in the light of that decision, the term enjoy ought to be construed to mean accepts and enjoys. We are not prepared to adopt this narrow construction of the section. The effect of it would be to exclude the operation of the section in all cases where statutory payments are made for the protection of a property of a person, who but for such payment, might be seriously prejudiced.

10. In Pankhabati Chaudhurani v. Nani Lal Singh [1913] 21 I.C. 207, the view suggested by Doss, J., in Suchand Ghoshal v. Balaram Mardana [1910] 38 Cal. 1, that until the sale is confirmed the judgment-debt remains unsatisfied and it is in satisfaction of that judgment debt that payment u/s 310.A (excluding the porbion which represents damages payable to the execution purchaser) is made, was reiterated and it was observed that Section 69 lays down a more comprehensive rule than is supported by English authority.

11. In Kangal Chandra Pal v. Gopi Nath Pal [1920] 24 C.W.N. 1068 where a suit for contribution had been brought by a part owner of a darpatni after a sale in execution of a decree for rent had been set aside as a result of his having deposited in Court the decretal money and the requisite damages, it was held by a Division Bench of the Calcutta High Court that Section 70 and not Section 69 should be applied to such a case and the learned Judges who decided that case observed that they preferred the view expressed by the Chief Justice and did not agree with the view expressed by Doss, J., in Suchand Ghoshal v. Balaram Mardana [1910] 38 Cal. 1. In Registered Jessore Loan Company, Ltd., v. Gopalhari Ghose Choudhury AIR 1926 Cal. 657 , although it was held that both Sections 69 and 70 ware applicable to the facts of the case, it was further observed that the law as to the liability to contribute was not entirely contained in the two sections of the Contract Act and the Court as a Court of justice, equity and good conscience might, in certain circumstances--although such circumstances do not bring the case strictly within the purview of these two sections--allow contribution if the claim appears to be either just or equitable.

12. A review of these decisions will show that in a large number of cases in which the facts were not dissimilar to those of the present case, the right of the plaintiff to claim contribution has been recognized. It is however also equally clear that the question as to what provision of law is really applicable to determine the liability of the defendant in such cases is not entirely free from difficulty, because there has been a serious conflict as to whether these cases would be governed by Section 69 or Section 70, Contract Act, or are to be decided merely upon the broad principle of equity, justice and good conscience.

13. Now, the invoking of this last principle for the purpose of making it the sole ground for a judicial decision, although it has been permitted in certain cases, has also been condemned in others and speaking for myself, I would always prefer to rest my decision on some statutory provision of law where the law on the particular subject has been codified in the form of a statute. The questions therefore to which the main issue in the case narrows down is whether either of the Section 69 or 70 can be applied in the present case, and if so which of them is applicable. So far as Section 69 is concerned the only ground on which it can be urged that it is not applicable is that once a sale takes place in execution of a decree the parties cease to be bound by law to pay the decretal amount and if therefore one of the parties takes steps to have the sale set aside to protect his own interest, that would not be a payment within Section 69, Contract Act.

14. There is no doubt some force in this contention but there is no less force in the argument with which the contention has been met in several reported cases that the mere fact of the property being sold by auction is not sufficient to discharge the decree, and the decree is satisfied only if the sale has been confirmed and the amount of the decree paid to the decree-holder out of the sale proceeds. It is again argued that the effect of Order 21, Rule 89, Civil P.C., and other similar provisions is to confer ON the judgment-debtor a right to get the sale set aside and this right which is in the nature of a mere option cannot be converted into an obligation. But will it not be equally plausible to argue that a judgment-debtor is really under no obligation to pay the decretal amount because in a sense it is optional with him either to pay the decretal amount and get the discharge, or not to pay it and let the law take its course. It has however been held by almost all the High Courts in this country that a person against whom a decree has been passed is "bound by law" to pay the decretal amount. In fact at one time it was contended that the expression "bound by law" covered only those liabilities which are created by some statute such as the liability to pay revenue, but it was held that this was putting far too narrow a construction on the section. Thus, as I read Section 69, I cannot help feeling that a case like the present was probably meant to be covered by that section, but I recognize that the expression "bound by law" is not a very happy one as is apparent from the difficulties which have from time to time arisen in construing and applying this section.

15. Assuming that the present case is not covered by Section 69, I do not think that there is any real difficulty in applying Section 70, having regard to its comprehensive language. This section runs as follows:

Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the law is bound to make compensation to the former in respect of or to restore, the thing so done or delivered.

16. As I have already said it is contended by Mr. Mullick on the authority of Yogambal Boyee Ammani Animal v. Naina Pillai Markayar [1909] 33 Mad. 15 that in order to enable a party to recover money paid by him from another u/s 70, Contract Act, it is necessary that the party sought to be made liable must not only have been benefited by the payment but must also have had an option of declining such benefit. This view, it is needless to say, is suggested by a long line of English decisions following Leigh v. Dickson [1884] 15 Q.B. D 60. All that I need here say is to repeat what was pointed out by Sir Ashutosh Mookerjee in Jognarain Singh v. Badri Das [1911] 13 I.C. 144 that to take this view would be to read into the section words which are not there and assume the term "enjoys" as used in the section must be construed as meaning "accepts and enjoys." I also find that the observation of Nair, J., on this point was dissented from not only by the Calcutta High Court in Jognarain s case [1911] 13 I.C. 144, but also by an eminent Judge of the Allahabad High Court in Dori Lal v. Patti Ram [1911] 10 I.C. 458, and that in at least two decisions of the Madras High Court it was clearly pointed out that this view not being warranted by the language of the section, the Courts in this country were not obliged to import all the restrictions imposed by English decisions: see Krishna Chandra Deo Garu v. P. Srinivasa Gharlu [1913] 38 Mad. 235 and Saptharishi Reddiar v. Secretary of State [1915] 28 I.C. 309.

17. It may also be pointed out that if by "the giving of the option to the party" is meant that before the benefit is conferred upon a person he must be given the choice of accepting or declining it, it will practically amount to holding that the benefit must have been conferred with the express authority of the person who is sought to be made liable. But it is obvious that to hold this would be to unduly restrict the scope of the section.

18. In fact the very first illustration appended to Section 70 indicates that the legislature could not have intended to go so far. If, on the other hand, an option is to be exercised after the benefit has been conferred, then it must be for the party on whom the benefit is conferred to indicate whether he wishes to retain the benefit or not. In such a case I do not think it will be unreasonable to assume that when a party actually retains and enjoys the benefit he has exercised, the option in favour of retaining it and in this view the expression "enjoys the benefit thereof" as used in the section needs no further qualification. At the same time it is clear that the section could not have been intended to authorize one party to throw an unnecessary burden upon another against his will or to compel him to keep properties which he does not wish to retain at a loss. To emphasize this aspect of the question Mr. Mullick invited us to consider an extreme case where he would; assume the properties sold to be worth a few thousand rupees only and the decretal money to be more than a lakh of rupees and where it is further assumed that one of the judgment-debtors gets the sale set aside for some sentimental reason or because some of the properties have a special value for him. In such a case, says Mr. Mullick, it would be most inequitable to require the judgment-debtor who is unwilling to retain the property to reimburse his co-judgment-debtor. This extreme illustration however need not deter us from applying the section where circumstances justify its application, because it is plain that in order to satisfy the requirements of the section it must be proved in the first place that the person claiming contribution "lawfully does anything for another" and it will be difficult for any Court to hold that in the circumstances mentioned by Mr. Mullick the judgment-debtor who gets the sale set aside does anything for that other judgment-debtor. Besides, in the present case the defendant having admitted that she herself wanted to get the sale set aside cannot turn round and say that she did not want to keep the property and there is nothing before us to show that she ever expressed her unwillingness to retain it. Another point which was raised by Mr. Mullick was that when a person is himself interested in making the payment, he cannot be said to have acted for another party also. Now this is imposing another restriction on the meaning of the section which its language does not warrant. It will be interesting to note that even in the case of Yogambal Boyee Ammani Ammal v. Naina Pillai Markayar [1909] 33 Mad. 15 all that Sankar Nair, J., said was that when a person is interested in making the payment he cannot be presumed in the absence of evidence to show that he intended to act for the other party, also to have acted for such other party. This suggests that in certain cases of this class it may be found that the plaintiff intended not only to act for himself but also for the defendant. It is clear that it could not have been the intention of the legislature that a person who claims compensation u/s 70 must have acted from purely disinterested motives because the very expression "not intending to do so gratuitously" suggests that there must be an element of self-interest also in the act performed by him. The question therefore which we have to ask is whether in this particular case the plaintiff acted for the defendant in making the payment for which he claims compensation. The important point to remember is that both the plaintiff and the defendant are cosharers in the properties which were sold. The position of a co-sharer has always been regarded as a peculiar one and in numerous decisions it has been held that at least so far as the possession of the property is concerned, one cosharer, generally speaking, represents another, and even though a cosharer may not be in actual possession of the property he may be regarded as being in possession through the cosharer who is actually in possession. I do not think therefore that in normal circumstances when one cosharer does anything to save the entire property, there can be much difficulty in holding that he is acting not only for himself, but also for the other cosharers. This inference may be strengthened or wholly rebutted according to the circumstances of each case, but in this particular case it is strengthened by the fact that the defend-ant herself alleges in her written statement that she was about to take steps for setting aside the sale when the plaintiff made the deposit under Order 21, Rule 89. Thus the plaintiff in this case did exactly what the defendant intended to do and I think the learned Subordinate Judge was correct in holding that in these circumstances he not only acted for himself but also for the defendant. It must be remembered that "acting for another party" does not merely connote doing a thing in a representative capacity but also doing a thing beneficial to that party and there is no doubt that in this case the payment was beneficial to the defendant because, as I have already said, the defendant herself admits that she also wanted to get the sale set aside so as to be able to retain the property.

19. The next question is whether the plaintiff made the payment "not intending to do so gratuitously." Here it is sufficient to quote the defendants own statement in para. 24 of the written statement which is to the following effect:

The fact is that the defendant on being informed by her officers of the fraudulent action of the plaintiff and the consequent sale of the properties was advised by her legal advisors to take and was taking steps for setting the sale aside by deposit of the entire decretal dues and sue the plaintiff for contribution and damages for fraudulent conduct.

20. It is clear from this statement that the defendant herself if she had made the payment, would not have done so gratuitously, but would have acted in the hope and belief that she could ultimately compel the plaintiff to reimburse her. This being so, I do not see how the defendant can impute to the plaintiff any generous motives which she herself did not possess. Besides, the circumstances of the case also do not suggest that the plaintiff intended to act gratuitously because within a few months of his making the payment he brought the present suit against the defendant for contribution. In my opinion therefore having regard to the particular facts of the case there can be no difficulty in holding that the present case is fully covered by Section 70, Contract Act, and the decree passed by the lower Court, so far as it relates to the decretal amount must be upheld.

21. Before concluding the discussion on this point, I should like to observe that every one of the three cases relied on by Mr. Mullick is clearly distinguishable from the present case. In Ramtahal Singh v. Biseswar Lal Sahu [1875] 2 I.A. 131, their Lordships of the Privy Council pointed out that the payment made by the plaintiff was voluntary, against the will of the party benefiting and made in the course of a speculative transaction in which the interest of the appellant was directly opposed to that of the respondent. Again the decision in Abdul Wahid Khan v. Shaluka Bibi [1893] 21 Cal. 496 cannot be fully appreciated apart from the facts of the case. In that case one Moradi Bibi, who possessed certain properties, having died, the properties which would in ordinary Course have passed by inheritance to her mother Shaluka and her husband Wahid Ali Khan, were taken possession of by the latter, and Shaluka Bibi had to bring a suit to recover the estate from him. In defending the suit he alleged among other things that he had incurred certain expenses in a previous litigation for the protection of the inheritance, and Shaluka Bibi was called upon to pay a portion of the money so spent by him. It was found that the plaintiff herself was a party to that litigation and had contested the suit up to a certain stage, but subsequently the defendant had carried on the litigation to the Privy Council and was ultimately successful there. It was held in these circumstances that the incidental benefit to the plaintiff who had not authorized the litigation in which the expense had bean incurred did not give rise to any implied contract on her part to render her liable in equity for any payment of that expense. It is clear that Section 70, Contract Act, which was neither referred to nor railed on by their Lordships in that case could have been of no avail to the defendant because he could not possibly be held to have acted for Shaluka Bibi when he was laying a claim to the entire property. The case of Yogambal [1909] 33 Mad. 15 is also distinguishable from the present case on the same line of reasoning. In that case the plaintiff had deposited a certain amount u/s 310-A, Civil P.C., 1882, to set aside a sale in execution of a money decree against the defendant. The sale being set aside he sued the defendant for compensation on the ground that the defendant had got the lands sold and the decretal debt due by her had been extinguished by the plaintiffs payment. It appears however that at the time of making the payment the plaintiff was himself in possession of the whole property and claimed it as a reversioner and also as assignee of one Iyer to whom the defendant, who according to the plaintiff had only a life interest in the property, had assigned it on lease or mortgage. His right to possession was however disputed by the defendant of the ground that he was not a reversioner and that his right as lessee or mortgagee had been extinguished long before the date of payment. These matters were in issue in a suit which was pending at the time of the payment but decided afterwards, the defendants contention being upheld. In these circumstances it is clear that any payment made by the plaintiff to save a property of which he was in wrongful possession and which he claimed adversely to the defendant could not be said to have been made for the latter.

22. The next point to be considered is whether the defendant actually paid the whole of Rs. 5,000 on 22nd March 1926. Now it appears that the payment on this occasion was accompanied by a petition which was filed on behalf of both plaintiff and the defendant and from which it appears that the money had been paid on behalf of both of them. The same inference is suggested by Order 136 in the order-sheet, Ex. B. I also find that Sital Prasad who is the manager of the defendant does not take the responsibility of stating in clear terms that the whole of this amount had been paid by the defendant, but says that one Shah Wahiduddin, defendants karpardaz, had gone to Patna on that date and that he alone could say how much money was actually taken by him that day. He however admits that the amount must have been entered in the defendants jamakharch as having been given to Shah Wahiduddin, but the jamakharch was not produced in Court. In these circumstances I am not prepared to hold that the finding of the Subordinate Judge on this point is not correct.

23. The next point which we are called upon to decide forms the subject matter of the plaintiffs appeal and it is whether the plaintiff is entitled to half the amount of damages paid by him to the auction purchaser in order to get the sale set aside. The learned Subordinate Judge has disallowed this amount relying on the authority of Dori Lal v. Patti Ram [1911] 10 I.C. 458. The view taken by the learned Subordinate Judge is supported by the decisions in Suchand Ghoshal v. Balaram Mardana [1910] 38 Cal. 1 and Pankhabati Choudhurani v. Nani Lal Singh [1913] 21 I.C. 207. The learned advocate for the plaintiff however relies on Kangal Chandra Pal v. Gopi Nath Pal [1920] 24 C.W.N. 1068 where the claim for contribution was allowed not only with regard to the decretal amount but also with regard to the statutory compensation. I am however inclined to follow the earlier decisions and hold that the plaintiff is not entitled to recover any part of the compensation money paid by him. If the case is held to be governed by Section 69, the difficulty in the way of the plaintiff is obvious because the defendant was not bound by law to pay any portion of the damage which is payable to the auction-purchaser under Order 21, Rule 89. As to Section 70 it is to be noted that it speaks of "compensation," while Section 69 refers to "reimbursement." Now, so far as regards the decretal amount, there is no doubt that the defendant was liable to pay half of it and that can easily serve as the measure of compensation. But the position is not so clear with regard to the statutory damage and the Court may well decline to compensate the plaintiff under this head on the ground that (1) he was also responsible for the sale of the properties; and (2) that as the amount paid by him under that head represents only a small portion of the total payment made by him, there is no certainty that he would not have paid the whole of that amount to save his interest apart from that of the defendant if it had been possible for him to do so. As u/s 70 a party is to be saddled with liability in the absence of a contract one has to use considerable care in determining the liability and to see that he is not called upon to contribute to the other party for what he might have spent wholly on his own account.

24. The last point in the case relates to the plaintiffs claim as to interest and commission and it is contended on his behalf that it should have been held that he had borrowed the money from Bindeswari Saran Singh at the rate of 2 per cent per mensem and had actually paid commission at the rate of 4 per cent.

25. In my opinion the plaintiffs case on this point has been rightly disbelieved by the lower Court, because it is nowhere mentioned in the pleading that the plaintiff had borrowed the money from Bindeswari Saran Singh on a hand-note agreeing to pay interest at 2 per cent per mensem or that he had actually paid commission at thereto of 4 per cent. Besides neither the plaintiff nor Bindeswari Saran Singh has given evidence in this case nor have the account books of Bindeswari Saran been produced. The question however which still remains to be decided is whether the plaintiff is entitled to claim interest at the market rate and whether he is entitled to charge interest from the date of the deposit of the decretal amount in Court. Now I find that the plaintiff has adduced no evidence whatsoever to prove the market rate of interest and the Court cannot, proceed in this matter upon the solitary statement of Sheo Prasad Singh, D.W. 2 that on several occasions he has charged one per cent interest per mensem on loans advanced on hand-notes. The mere fact that one particular person has charged 1 per cent interest in several transactions is not sufficient to determine the market rate of interest. Having regard to the circumstances of the case, I am inclined to allow interest to the plaintiff at the rate of 6 per cent per annum, but 1 would do so not from the date of the deposit but from the date of the institution of the suit. This is what was done in Ahmed Wali Khan v. Shamshul Jahan Begum [1905] 28 All. 482 and I think that interest in this case should be allowed; from the date on which the plaintiff made a formal demand for the money which I consider in this case to be the date of the institution of the suit, because there is no reliable evidence on the record that any demand was made from the defendant previous to this date.

26. As the plaintiff has amended his original plaint and as I have already held that Section 70 applies to this case, I do not wish to express my opinion as to the applicability of Section 95, T.P. Act, and whether any charge is created in favour of the plaintiff on the properties protected from sale.

27. Subject to the modifications indicated above the judgment and decree of the learned Subordinate Judge are upheld. Each party will be entitled to costs proportionate to its success in this Court and the plaintiff will also get proportionate costs in the lower Court, The amount of his decree will carry interest at 6 per cent till realization.

Ross, J.

28. I agree that the appeals should be determined in the manner proposed.

29. It is contended on behalf of the defendant that the case cannot be brought u/s 69, Contract Act, because after the sale in execution of the decree on the mortgage there was no obligation to pay; and that it cannot fall u/s 70, because the plaintiff, in making the payment was not making it for the defendant but for himself.

30. In Dering v. Earl of Winchelsea. [1787] 2 B. & P. 270 Lord Chief Baron Eyre says that:

contribution is bottomed and fixed on general principles of justice, and does not spring from contract.

31. The right of contribution springs from equality of burden and benefit. In Stirling v. Forrester [1321] 3 Bligh 575, Lord Redesdale said:

The decision in Dering v. Earl of Winchelsea [1787] 2 B. & P. 270 proceeded upon a principle of law which must exist in all countries, that where several persons are debtors all shall be equal." His Lordship also said: "The principle established in the case of Dering v. Earl of Winchelsea [1787] 2 B. & P. 270 is universal that the right and duty of contribution is founded in doctrines of equity; it does not depend upon contract. If several persons are indebted and one makes the payment, the creditor is bound in conscience, if not by contract, to give to the party paying the debt all his remedies against the other debtors. He (the creditor) is bound, seldom by contract, but always, in conscience, as far as he is able, to put the party paying the debt upon the same footing with those who are equally bound. That was the principle of decision in Dering v. Earl of Winchelsea [1321] 3 Bligh 575; and in that case there was no evidence of contract as in this. So in the case of land descending to co-parceners subject to a debt, if the creditor proceeds against one of the coparceners, the others must contribute.

32. This exposition of the law was quoted with approval in the House of Lords by Lord Blackburn in Duncan, Fox and Company v. North and South Wales Bank [1880]6 A.C. 1 and by Lord Halsbury, L.C. in The Ruabon Steamship Company, Limited v. The London Assurance [1900] A.C. 6. It seems clear that on general principles of justice the plaintiff is entitled to contribution.

33. Nor, in my opinion, is the argument that after the sale had taken place there was no obligation to pay decisive, although it is true that it has been accepted in some of the reported cases. It was not accepted by Lal Mohan Doss, J., in Suchand Ghosal v. Baldram Mardana [1910] 38 Cal. 1 where his Lordship analyzed the position, when money is deposited in Court under Order 21, Rule 89, to set aside a sale that has already taken place as follows:

It is urged that as soon as the sale took place, the decree was satisfied and the joint and several obligations in discharge of which the money was paid ceased to exist. I think a clear fallacy lurks in this argument. The decree is not satisfied and the obligation is Hot discharged until the decree-holder receives the money and satisfaction of the decree is entered, nor does the compulsion of law, initiated by the attachment of the property, terminate until such satisfaction. When the sale takes place, the purchase money deposited by the purchaser remains in Court and is not paid out to the decree-holder until after confirmation of the sale. If, before the sale is confirmed, an application is made u/s 310-A (O. 21, Rule 89) and purchase money and compensation are deposited the money so deposited is applied towards the satisfaction of the decree and on the sale being set aside, the purchase money deposited by the purchaser is refunded back to him, and he also receives the additional amount of Statutory compensation. It follows therefore that it was the money deposited by the plaintiff which in fact satisfied the decree and discharged the joint obligation.... I am therefore of opinion that the mere fact that the money was deposited u/s 310-A does not alter the rights of the plaintiff; but at the same time he is not entitled to ask for contribution in respect of the statutory compensation of 5 per cent, deposited by him u/s 310-A, Civil P.C., 1882, because that sum did not form part of the joint obligation which the parties were by law bound to discharge. If he had paid the sum before the sale it would not have been necessary to pay this additional amount.

34. To the same effect are the observations of Lord Romilly in Fatema Khatoon v. Mohamad Jan [1868] 12 M. 1. A. 65, a case where the deposit was made to prevent a sale:

When the money was paid into Court we find, in the first place, it was not a payment at all. It was originally a mere deposit in Court of the full amount recoverable by the decree-holder. It was deposited, under protest, for the purpose of preventing an injurious sale of the whole property.

35. There was therefore still a common obligation to discharge after the deposit was made; and that the defendant was benefited by the payment by the saving of her interest in the property is not disputed. Even between tenants-in-common there is a right to contribution where there is a common obligation to discharge: Leigh v. Dickeson [1883] 12 Q.B.D. 194 (per Cotton, L.J.). The case therefore not only clearly falls within the general equity to contribution; but may also be held to fall u/s 69, Contract Act; and there is also ample authority for holding that it may be brought u/s 70.

Advocate List
Bench
  • HON'BLE JUSTICE Ross, J
  • HON'BLE JUSTICE Fazl Ali, J
Eq Citations
  • AIR 1931 PAT 394
  • LQ/PatHC/1931/11
Head Note

Income Tax — Non-residents — Tax Deducted at Source (TDS) — Question of limitation if survived — TDS held to be deductible on foreign salary as a component of total salary paid in India, in Eli case, (2009) 15 SCC 1 — Hence, held, question whether orders under Ss. 201(1) & (1-A) were beyond limitation purely academic in these circumstances as question would still be whether assessee could be declared as assessee in default under S. 192 read with S. 201 of the Income Tax Act, 1961.\nQuestion of limitation left open, since assessees had paid differential tax and interest thereon and undertaken not to seek refund thereof — Income Tax Act, 1961, Ss. 192, 201(1) and 201(1-A)\n(Paras 3 and 5)\n