Dharam Deo Pandey vs Ramanuj Pandey

This is an appeal from an order of the Subordinate Judge of the First Court of Arrah, rejecting an objection by the judgment-debtor to the execution of the decree. The decree-holder sued the judgment-debtor for partition of the family properties. The suit was compromised between the parties and a decree was passed accordingly. According to the compromise, the properties were separated by allotment. A certain family residential house was allotted to the share of the defendant with the condition that the defendant would pay Rs. 70,000 to the plaintiff. The Rs. 70,000 was to be paid, as to Rs. 10,000 at the time of the settlement and the balance of Rs. 60,000 in six annual instalments of Rs. 10,000 each, commencing from 30th December 1931, with a further stipulation that the defendant should pay interest on the entire Rs. 60,000 at the date of payment of each instalment. Clauses 6 and 7 of the compromise agreement are as follows:

For the sake of these defendants'' convenience in payment of money the plaintiffs have agreed that the defendants should pay Rs. 10,000 (Rupees ten thousand) just now and the remaining Rs. 60,000 in six equal instalments, on the Both December of each year, i.e., from 1931 to 1936, and that the interest on the entire sum of rupees sixty thousand should run at the rate of 5 percent from to-day and they should Day the entire amount of interest up to the date of payment along with the instalment. A receipt bearing the signature of the plaintiffs with their thumb-impression regarding the amount paid to them shall be filed in Court and if they do not accept the payment it shall be deposited in Court. No other receipt or objection regarding payment of the money except the receipt filed in Court or the deposit made in Court can be admissible.

Regarding the payment of instalments, it has been agreed between the parties that in case of default of instalment, the plaintiffs shall have the right to realise the amount of the defaulted instalment together with interest by taking out execution: and if default is made in payment of two successive instalments, the plaintiff shall realise the entire amount in respect of the defaulted instalments or otherwise together with interest of the defaulted instalments by taking out execution and shall realise it by the sale of properties situate in the District of Shahabad and the house known as "Lai Bhavan" which has been given in security and on which (sic) if the money is not satisfied the plaintiffs shall have the right to realise it by the sale of other properties of the defendants in the District of Shahabad or in Burmah or at any other place. If the money is not satisfied even from these properties, then the person of the major defendants shall be liable for its payment.

It was also agreed that the plaintiff would vacate the house within three years after the payment of the first instalment which was to fall due on 30th December 1931. The defendant paid the Rs. 10,000 according to the terms of the settlement and Rs. 1000 with the interest due, towards the first instalment. Payment was not again made until 1933, and then with a note by the defendant that it was in respect of that year and not in respect of the overdue instalment for 1932 and no payment was made for the kist of 1934; the kist of 1935 had not fallen due before the date of the presentation of the petition for execution. The plaintiff therefore put the decree into execution for the balance of Rs. 40,000 towards the principal and interest for the subsequent period. The first objection by the defendant was based on the fact that the plaintiff decree-holder did not vacate the house within the specified period and he argued that he is entitled under the agreement to be discharged from his liability thereunder.

For this contention, he relies upon a passage in Clause 12 which is as follows:

No party shall have the right to withdraw or resile from this compromise. If unfortunately, the major or minor plaintiffs, or the major or minor defendants resile from the compromise, in that case, if any major or minor plaintiff resile from it, the defendants shall have the right and power to realize Rs. 70,000 (Rupees seventy thousand), if the entire amount has been paid or to the extent of the amount paid, with interest at five percent. per annum, from the plaintiffs or any one of the plaintiffs and their heirs and representatives-in-interest, and in lieu thereof a charge has been created and shall remain upon the properties which have been allotted to the share of the plaintiffs in respect thereof and the other properties and person of the plaintiffs shall also be liable for it,

and upon Clause 13 which is as follows:

The terms of the compromise are compensatory to one another. If the compromise is set aside on account of the act of any one of the parties, then the parties shall be restored to the position in which they are to-day.

The judgment, debtor contends that by neglecting to deliver up the house, the decree-holder has resiled from the contract. This argument cannot be sustained. Both parties are seeking not to resile from the compromise but to enforce it.

In rejecting this argument, the Sub-ordinate Judge was entirely right. The second contention of the judgment-debtor is based upon the fact that in making the payment in 1933, he had accompanied it with a notice saying that it was to be in respect of the kist of 1933 and not towards the instalment for 1932 which was in arrear, and it was argued on his behalf that the decree-holder in view of this specific appropriation was not entitled to apply the money towards the instalment of 1932. By this means he claims to avoid the consequence provided by the agreement that in case two successive kists shall be in arrears the plaintiff shall be entitled to execution for the entire balance and he seeks to justify this contention on the strength of the ordinary doctrine of appropriation.

He contends that having made a specific appropriation when making the payment, the creditor was not entitled to accept it without accepting also the condition of appropriation. This argument is often raised in such cases and in my opinion it has no substance. If a series of separate debts exist between a creditor and a debtor, the debtor may it is true pay any one of them as he may deem fit and if he specifically appropriates the payment to a later debt, the creditor is not entitled to accept the payment otherwise than in respect of the debt to which it is so appropriated by the debtor.

This doctrine however has no application when the parties enter into an agreement regulating the order of payment. Clauses 6 and 7 of the agreement make it clear that the intention of the parties was for successive payments of successive instalments and this is the case with most compromise decrees. The terms of the agreement are inconsistent with any other interpretation.

It is not necessary for the rejection of the judgment-debtor''s argument to fall back upon any distinction between the payment of a single debt by instalments and payment of separate debts, though such distinction may be important in other classes of disputes. In the case before us the matter can be resolved as a matter of contract.

These two points were the only ones raised before us in argument.

In my opinion the decision of the learned Judge was right and this appeal should be dismissed with costs.